Correspondence: Elizabeth A. Jex, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington DC 20580, USA

¹is the Deputy Director of the Office of Policy Planning (OPP) of the Federal Trade Commission.

²is Attorney Advisor of OPP, and formerly led Bureau of Competition investigations of pharmaceutical and biotechnology mergers.

Received 14 July 2009; Revised 14 July 2009; Published online 8 September 2009.

Abstract

Recent debates over how to structure an approval pathway at the United States Food and Drug Administration for follow-on biologics (FOBs) have taken a predictably polarized turn, with the pioneer drug manufacturers on one side, and the FOB industry on the other. Each side is arguing for statutory entry restrictions in the form of exclusivity periods that they argue will promote innovation and consumer access to lower-priced biologic drug products. These entry barriers are based on those in the Hatch–Waxman Act's approval process for generic small-molecule drugs. Recently, the Federal Trade Commission (FTC) provided an independent analysis of how the proposals would likely affect consumers. The FTC's Report, Emerging Health Care Issues: Follow-On Biologic Drug Competition, concluded that the likely market dynamics of FOB competition will resemble brand-to-brand drug competition, rather than a generic drug product. This article explains how an FOB regulatory approval pathway need only rely on the US patent system and market-based pricing to continue to incentivize development of both pioneer and FOB drugs. Further, inclusion of entry barriers in the form of regulatory exclusivity periods and special patent resolution procedures would likely harm consumers by delaying FOB entry and decreasing the pace of biotech innovation.