On February 3, 2020, the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) issued a joint statement announcing their plans to collaborate in promoting competitive biological product markets and addressing false or misleading statements by manufacturers. According to the statement, the coordination is intended to accelerate biosimilar competition by reducing “gaming” of FDA requirements and other attempts to unfairly delay competition. This dual-agency focus threatens increased antitrust scrutiny for biologics manufacturers.

Biologics is currently the fastest growing segment of prescription medicine spending. According to FDA, U.S. insurers spent $125.5 billion on biologics in 2018 alone, accounting for 37% of prescription drug spend. In 2010, Congress enacted the Biologics Price Competition and Innovation Act, which created a shortened pathway for FDA approval of biological products that are biosimilar to an FDA-licensed reference product. To date, FDA has approved 26 biosimilars. These biosimilars typically launch with initial list prices 15-35% below that of the reference products.

The joint statement outlined the agencies 4 main goals:

• Review of patent settlements for antitrust violations. Under the 2018 Patient Right to Know Drug Prices Act, drug manufacturers must notify antitrust authorities—including the FTC—of any patent settlement agreements between reference product and biosimilar manufacturers. This allows the FTC to evaluate any potential antitrust concerns, such as reverse payments that could slow or defeat the introduction of lower-priced biosimilars. The FTC has shown a keen interest in curbing such reverse payment, or “pay-for-delay” settlements between brand and generic drug manufactures, bringing numerous actions to date. The agency will likely seek to challenge a biologics settlement in the near future. The review and investigation process for biologics patent settlements will occur in the same manner as that with generic drugs.

• Respond to false or misleading communications. The agencies specifically state that “if a communication makes a false or misleading comparison between a reference product and a biosimilar in a manner that misrepresents the safety or efficacy of biosimilars, deceives consumers, or deters competition,” they will take “appropriate action within their respective authorities.” Additionally, FDA is publishing draft guidance, outlining considerations for advertisements and promotional labeling for biologic products.

• Ensure access to samples needed for biosimilars development. In developing biosimilars, manufacturers often require biologic product samples for testing. The agencies will “collaborate to identify and deter tactics used to prevent or impede access to such samples[.]” The agencies are evaluating whether “additional information sharing arrangements are warranted.” FDA addressed similar issues with respect to small molecule drugs, where in 2018 it first posted a list identifying all drug products for which FDA received an access inquiry for samples related to limited distribution of the marketed reference listed drug. Ultimately, these issues led to the passage of the CREATES Act in December 2019, which also addressed access to samples and potential liability for license holders that refuse to provide samples.

• Promote competition through public outreach. The agencies will collaborate on future public outreach efforts, including sponsoring a public meeting to discuss competition for biologics. FDA will also develop educational materials for consumers and providers about biosimilars. An FDA/FTC Workshop on a Competitive Marketplace for Biosimilars is scheduled to take place at FDA on March 9, 2020.

The statement also referenced FDA’s recently issued final guidance related to “certain types of citizen petitions intended to delay FDA action on a generic or other abbreviated application.” The statement indicated that FDA will refer to the FTC its determinations of petitions submitted with the primary purpose of delaying an approval. The FTC has previously challenged citizen petitions that it believed constituted “sham petition” as an antitrust violation.

Biologics present a promising opportunity for innovation and pharmaceutical companies should be prepared for the same—or even greater—antitrust scrutiny as the industry has faced with small molecule drugs. Companies are well advised to consult antitrust and FDA regulatory counsel when engaging in conduct that may present risks, including making public representations about competing biosimilar products, limiting access to samples, entering into patent settlements, or submitting citizen petitions to the FDA.

To read the joint statement, please click here.