August 30, 2024

FTC continues to focus on competition in pharmaceutical markets, supports FDA guidance on biosimilars

Deborah Cho, Jason Conaty, Komal Karnik Nigam, Ilana Kattan, Philip Katz, Chuck Loughlin, Jill Ottenberg, Gary Veron, Bryan Walsh

Hogan Lovells

+ Follow Contact

Facebook

Send

Embed

Hogan Lovells

On August 20, 2024, the Federal Trade Commission (FTC) filed a comment letter in support of the Food and Drug Administration’s (FDA’s) June 2024 draft guidance on biosimilar interchangeability (the “Draft Guidance”). When finalized, the Draft Guidance will update a previously issued FDA guidance (the “2019 Interchangeability Guidance”) to remove a recommendation that a biosimilar applicant conduct switching studies to demonstrate the interchangeability of its biosimilar product with the reference product. Citing the two agencies’ “long history of collaborative efforts to support competition and non-deceptive advertising in pharmaceutical markets,” the FTC lauds the Draft Guidance, saying it “would likely have a positive impact on the number of biosimilars designated as interchangeable and on the uptake of biosimilar products by reducing barriers to entry and increasing competition among biologic products.”

This is the fourth comment related to the pharmaceutical industry the FTC has submitted to various agencies since the beginning of 2024, and part of a broader effort by the FTC to prioritize “safeguarding fair competition and rooting out unlawful business practices in health care markets.”[1]

FTC says FDA’s Draft Guidance on interchangeability will increase competition in biologic marketplaces

Under the Public Health Service Act, the standard for interchangeability is that a biosimilar “can be expected to produce the same clinical result as the reference product in any given patient.”[2] For a product that is administered more than once to a patient, this means that the “risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch.”[3]

A key aspect of the Draft Guidance[4] is that FDA no longer recommends that data from a switching study be submitted to support a request for an FDA determination of interchangeability for a proposed biosimilar product.[5] This is a reversal from the 2019 Interchangeability Guidance, [6] which recommended that requests for an interchangeability finding include switching study data to, among other things, address “any immunogenicity risk associated with switching or alternating between the reference product and the proposed interchangeable biosimilar.”[7] The Draft Guidance instead says an applicant “may choose to provide an assessment of why the comparative analytical and clinical data provided” support a showing that the statutory standard has been met.[8] The Draft Guidance is the latest action that is part of a larger recent trend in efforts by FDA, other agencies and Congress aimed at “flattening” the regulatory pathway for biosimilars to remove the distinction between non-interchangeable and interchangeable biosimilars, as discussed in a previous Hogan Lovells alert.

The FTC comment letter[9] expresses support for eliminating the recommendation to submit evidence from a switching study, because “[c]linical switching studies can be time-consuming and expensive” and “[r]elying on clinical switching studies to establish interchangeability has likely contributed to marketplace confusion about biosimilars.”[10] For that reason, the FTC says, the Draft Guidance “would likely have a positive impact on the number of biosimilars designated as interchangeable and the uptake of biosimilar products in general by reducing barriers to entry and increasing competition in the biologic marketplaces.”[11] In that regard, the FTC says the Draft Guidance would reduce the cost of showing that switching from a reference biologic to a biosimilar is safe and effective, simplify the approval process, and “help to dispel the false impression of separate safety and efficacy standards for interchangeables and other biosimilars.”[12]

FTC comment letter part of ongoing agency effort to target anticompetitive conduct in pharmaceutical markets

The FTC places this comment in the context of the agency’s “long history of addressing illegal conduct that interferes with competitive and robust marketplaces and biosimilar products.”[13] Consistent with that view, this is just the latest in a series of comments the FTC has recently submitted to various agencies related to various pharmaceutical industry topics, including these this year:

March-in Rights. On February 6, the FTC submitted a comment in support of the National Institute of Standards and Technology (NIST) Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights.[14] The NIST guidance reviews factors an agency may consider when deciding whether to exercise march-in rights, providing a framework to guide decision-making about whether to intervene and exercise march-in rights.[15] The FTC’s comment expresses support for NIST’s “expansive and flexible approach to march-in rights,” and specifically supports “the exercise of march-in rights where prices unreasonably limit the public’s access to drugs protected by federally funded patents.”[16]
Patent Settlements. On June 18, the FTC submitted a comment in support of a U.S. Patent and Trademark Office (USPTO) notice of proposed rulemaking (NPRM) that would require parties to file with the USPTO all pre-institution patent settlement agreements,[17] including collateral agreements. The FTC comment says the proposal would “enhance the FTC’s ability to monitor anticompetitive conduct related to patent settlements,” specifically with respect to settlement agreements between pharmaceutical manufacturers. According to the FTC, such agreements “can raise antitrust concerns where they include reverse payments that keep drug prices high by impeding competition from lower-cost generic drugs.”[18]
Patent Thickets. On July 9 the FTC submitted a comment in support of a USPTO NPRM on “Terminal Disclaimer Practice to Obviate Nonstatutory Double Patenting.” The comment recognizes the need to “address the harmful exploitation of terminal disclaimers,” and asserts that the use of terminal disclaimers “linking similar patent claims can exacerbate the exclusionary impact of patent thickets by forcing potential market entrants to incur the high cost of challenging multiple duplicative patents.”[19]

Each of the FTC’s comments reiterates the FTC’s commitment to targeting anticompetitive conduct that can lead to increased prescription drug prices and reduce innovation.[20] More specifically:

Two of the FTC’s comment letters note that the FTC has “taken aim” at brand companies/patent holders that may be “engaged in other unfair methods of competition, including sham patent litigation, anticompetitive loyalty programs that impede generic entry, and product hopping schemes.”[21]
Three of the comments highlight the FTC’s ongoing efforts to dispute “improper” Orange Book patent listings that the agency argues can harm drug competition and constitute a violation of the Sherman Act.[22]
Two of the FTC’s comments describe the FTC’s 6(b) study of Pharmacy Benefit Managers (PBMs),[23] which focused on examining the “impact of PBM business practices on prescription drug access and affordability and to advise policymakers on industry reforms.”[24]

The comment letter on the FDA Draft Guidance says the FTC’s July 2024 Interim Staff Report on PBMs “identified conduct by other market participants that can inhibit robust competition in generic and biologic marketplaces.”[25]

Takeaways

President Biden’s 2021 Executive Order on Promoting Competition in the American Economy directed federal agencies to address, among other things, “unfair anticompetitive conduct or agreements in the prescription drug industries.” Under the leadership of FTC Chair Lina Khan, the FTC has prioritized promoting competition in the health care industry, with a focus on lowering costs of prescription drugs. The recent FTC comments submitted in support of various U.S. government agency initiatives in the pharmaceutical markets highlight the continued efforts by the FTC to target purportedly anticompetitive conduct in this space, and shed light on the agency’s competition priorities in the health care sector more broadly.

[1] Federal Trade Commission Press Release, “FTC, DOJ and HHS Work to Lower Health Care and Drug Costs, Promote Competition to Benefit Patients, Health Care Workers” (Dec. 7, 2023) available here.

[2] 42 USC 262(k)(4)(A)(ii).

[3] Id. at 262(k)(4)(B).

[4] FDA Draft Guidance for Industry, Considerations in Demonstrating Interchangeability With a Reference Product: Update (June 2024) (Draft Guidance) available here.

[5] See Draft Guidance at 3-4. A switching study generally entails switching one group of patients between the proposed interchangeable biosimilar product and the reference biologic, typically at least three times, and comparing the clinical response compared to patients who were not switched. FDA states that “experience has shown that for the products approved as biosimilars to date, the risk in terms of safety or diminished efficacy is insignificant following single or multiple switches between a reference product and a biosimilar product.” Id. at 1-2.

[6] FDA Guidance for Industry, Considerations in Demonstrating Interchangeability With a Reference Product (May 2019) (2019 Interchangeability Guidance), available here.

[7] See id. at 5; see also Draft Guidance at 3.

[8] Draft Guidance at 4.

[9] Food and Drug Administration, Comment of the United States Federal Trade Commission on Considerations in Demonstrating Interchangeability with a Reference Product: Update, Draft Guidance for Industry, Docket No. FDA-2017-D-0154 (Aug. 20, 2024) (FTC Comment on Draft Guidance) available here.

[10] FTC Comment on Draft Guidance at 7.

[11] Id. at 8.

[12] Id. at 9.

[13] Id. at 4.

[14] U.S. Department of Commerce National Institute of Standards Technology, Comment of the United States Federal Trade Commission on Draft Interagency Guidance Framework for Considering the Exercise of March-In-Rights, Docket No. 230831-0207 (Feb. 6, 2024) (FTC comment on NIST Guidance on March-In Rights) available here. “March-in Rights” allow an agency to “march-in” and demand that the patent holder grant licenses to patents developed with federal funding.

[15] See Hogan Lovells Client Alert, “Biden Administration invites comments on new march-in rights framework” (Dec. 21, 2023) available here.

[16] FTC Comment on NIST Guidance on March-In Rights at 8.

[17] Pre-institution settlement agreements are those that occur before the Patent Trial and Appeal Board (PTAB) decides whether to institute trial.

[18] U.S. Patent and Trademark Office, Comment of the United States Federal Trade Commission on Patent Trial and Appeal Board Rules of Practice for Briefing Discretionary Denial Issues, and Rules for 325(d) Considerations, Instituting Parallel and Serial Petitions, and Termination Due to Settlement Agreement, Docket No. PTO-P-2023-0048 (June 18, 2024) (FTC Comment on USPTO NPRM on Patent Settlements) available here.

[19] U.S. Patent and Trademark Office, Comment of the United States Federal Trade Commission on Terminal Disclaimer Practice to Obviate Nonstatutory Double Patenting, Docket No. PTO-P-2024-0003 (July 9, 2024) (FTC Comment on USPTO NPRM on Patent Thickets) at 2, available here.

[20] See e.g. FTC Comment on NIST Guidance on March-In Rights at 4.

[21] See FTC Comment on Draft Guidance at 4 and FTC Comment on USPTO NPRM on Patent Settlements at 5.

[22] See FTC Comment on NIST Guidance on March-In Rights at 6-7; FTC Comment on USPTO NPRM on Patent Settlements at 4-5; and FTC Comment on Draft Guidance at 5.

[23] See Hogan Lovells client alert, “Another shot across the bow: FTC cautions against reliance on past PBM advocacy letters and reports” (July 26, 2023) available here.

[24] See FTC Comment on NIST Guidance on March-In Rights at 6.

[25] See FTC Comment on Draft Guidance at 5

[View source.]

Send Print Report

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.