FDA unveils plan to lower prices, boost competition among drug-makers
The FDA unveiled a new plan to enable market competition for biologics and biosimilars Wednesday, July 18, as part of a larger shift to lower drug prices across the healthcare system.
Tactics by manufacturers have stalled the competition of biosimilars, which have the potential to significantly lower healthcare costs and drug prices. The FDA’s new plan, Biosimilars Action Plan: Balancing Innovation and Competition, aims to boost competition and innovation around biologics and biosimilars while also streamlining and improving the pathways for drug review and development.
Congress established a pathway for biosimilars in 2010 through the Biologics Price Competition and Innovation Act, which provided a period of exclusivity for originator biologics followed by opportunities for competitive biosimilars. However, the market for biosimilars has not appeared in the years since.
“The ability for these products to penetrate clinical practice, and gain acceptance, is still not firm,” FDA Commissioner Scott Gottlieb, MD, said in a prepared statement at the Brookings Institute Wednesday.
Since the act was passed, just 11 biosimilars have been approved through 2018, with only three currently marketed in the U.S.
Competition is “anemic” because stakeholders–including manufacturers, pharmacy benefit managers, group purchasing organizations and distributors–have consolidated and split “monopoly profits” rather than embrace competition, Gottlieb said, characterizing some of these tactics as “unacceptable” in his comments. Litigation has also delayed market access for biosimilar products.
Biologics represent 40 percent of total spending on prescription drugs, though just 2 percent of Americans use them, according to the FDA. A path to greater competition, and thus potentially lower prices, is therefore “key to reducing costs,” Gottlieb said. A biosimilar product in the non-U.S. OECD markets can lower prices as much as 30 percent, according to an FDA analysis.
Americans could have saved $4.5 billion in 2017 if they had the opportunity to purchase successfully marketed, FDA-approved biosimilar prescription drugs.
Biologics are used to treat several life-threatening illnesses, and the advancement of these medicines represents “an inflection point in medicine” on par with the introduction of antibiotics after World War II, Gottlieb noted.
“With the advent of new platforms like gene therapy and more targeted drugs, we’re at a similar period now,” he said.
In the long run, biologics also have the potential to lower costs through reduced labor and reduced need for long-term care, according to Gottlieb. Biologics are forecasted to be the fastest growing segment of drug spending.
The action plan, in addition to other actions, aims to enable the biologics market in four ways:
- Improving the development and approval process for biosimilar and interchangeable products.
- Maximizing scientific and regulator clarity for the biosimilar product development community.
- Developing effective communications among patients, providers and payors to fully understand biosimilars.
- Reducing FDA requirements and other unfair market delays for competitors to boost market competition of follow-on products.
The action plan comes in the wake of the Trump administration’s wider efforts to lower drug prices.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."