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Anticompetitive Conduct in Biologics – An Enforcement Priority with FTC and FDA

Today the Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) released joint guidance concerning competition for biologics, including biosimilars. The joint guidance seeks to enhance competition for biologics and reduce manufacturers’ use of false or misleading statements or promotional communications concerning the efficacy or safety of biosimilars and other biologics. This guidance appears to be part of the Trump administration’s effort to reduce the cost of medications for consumers, as it is aimed at increasing the level of competition biosimilars can offer and raising awareness of the safety and efficacy of biosimilars. The fast-growing biologics market has become an important sector of the healthcare and pharmaceutical industry. According to the joint guidance, private insurers spent over $125 billion on biologics in 2018 alone. Biologics treat many serious conditions that often lack alternative treatment options. Although Congress...

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FTC Ratchets up Scrutiny on Pharmaceutical Deals

WHAT HAPPENED: Recent developments indicate that pharmaceutical deals are attracting greater scrutiny from the Federal Trade Commission (FTC). In September 2019, FTC Chairman Joseph Simons reportedly stated that the FTC will more closely scrutinize deals with overlaps involving products that are still in clinical study or development. Because of the high failure rate of products in early phases of study, the FTC typically has focused on overlaps between marketed products or products near Federal Drug Administration (FDA) approval, g., products in Phase III of the FDA pipeline. Chairman Simons’s statement makes clear that the FTC plans to examine earlier stage products while reviewing deals. In 2018, the director of the FTC’s Bureau of Competition announced in a speech that the FTC would favor divestitures of marketed drugs over pipeline drugs in pharmaceutical deals. Traditionally, when the FTC has had a concern about overlapping products, it has allowed the...

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THE LATEST: FTC Submits Comment on FDA Guidance Aimed at Deterring Abuse of Citizen Petition Process

The Federal Trade Commission (FTC) submitted comments supporting the Food and Drug Administration’s (FDA) guidance for assessing whether a pharmaceutical company petitioner is misusing the citizen petition process to delay approval of a competing drug. WHAT HAPPENED: The FDA released revised draft guidance intended to discourage pharmaceutical companies from gaming the citizen petition process. The FTC expressed approval of the considerations the FDA will use to determine whether a petition was submitted to delay or inhibit competition. The considerations the FDA will use include: The petition was submitted unreasonably long after the petitioner learned or knew about the relevant information; The petitioner submitted multiple and/or serial petitions; The petition was submitted close to the expiration date of a known patent or exclusivity; The petition’s scientific positions were unsupported by data or information; The petition was the same or substantially...

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THE LATEST: FTC to Look Closely at Competition between Biologics and Biosimilars and Patent Protection Strategies of Branded Manufacturers

WHAT HAPPENED On July 18, 2018, US Food and Drug Administration (FDA) Commissioner Scott Gottlieb delivered a speech at The Brookings Institution in Washington, DC, discussing how to bolster competition from biosimilars while maintaining innovation. The Commissioner noted the absence of true competition among biologics from biosimilar products in the United States, similarly to what the country experienced 30 years ago with respect to generics. The Commissioner said that this situation is caused, in part, by what he views as anticompetitive practices implemented by branded manufacturers, such as: Rebating schemes in which drug manufacturers bundle discounts to health insurers and employers across different pharmaceutical products; Multi-year contracts granting important rebates to payors, often entered into right before the entry of a biosimilar on the market; Volume-based rebates; Tying rebates, i.e., when rebates are offered if a product is bought together...

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When Customer Supply Contracts Lead to Trouble: Exclusive Dealing Provisions Result in FTC Monopolization Action against Invibio

The Federal Trade Commission (FTC) continues to aggressively enforce the antitrust laws. On April 27, 2016, the FTC took action against Victrex, plc and its wholly owned subsidiaries, Invibio, Inc. and Invibio Limited (collectively, Invibio) because of exclusivity terms in its supply contracts. The consent order requires Invibio to cease and desist from enforcing most of the exclusivity terms in its current supply contracts and generally prohibits Invibio from requiring exclusivity in future contracts. Invibio is also prohibited from using other pricing strategies, such as market-share discounts, that would effectively result in exclusivity. Exclusive dealing by a monopolist may be challenged and prohibited when the acts allow the monopolist to maintain its monopoly power. Total foreclosure is not a requirement for unlawful exclusive dealing—it simply must foreclose competition in a substantial share of the relevant market so as to adversely affect...

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Physicians Write Letter to FDA Regarding Biosimilar Naming Concerns

On Thursday, August 14, 2014, several physicians wrote a letter to Commissioner Hamburg of the U.S. Food and Drug Administration (FDA) expressing their concerns regarding the naming of biosimilar products in light of the implementation of the Biologics Price Competition and Innovation Act (BPCIA). Unlike traditional small-molecule prescription drugs, most biologics are complex and are typically made from human or animal materials.  The BPCIA provides an abbreviated licensure pathway for biologics that are demonstrated to be “biosimilar” to or “interchangeable” with an FDA-licensed biologic.  A biologic may be demonstrated to be “biosimilar” if data show that, among other things, the product is “highly similar” to an already-approved biologic.  Unlike “generic” versions of small-molecule prescription drugs, biosimilars are not bioequivalent to their reference biologics.  To date, the FDA has not approved any biosimilar products. The licensure pathway...

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