Congress Imposes More Transparency on Biologic Drug Manufacturers

Sep 26, 2018

Manufacturers to Report Patent Settlements to the Federal Government








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Yesterday, with Express Scripts’ support, the U.S. House of Representatives approved a health care bill making critical improvements to prescription drug pricing transparency and affordability.  The Senate has already approved the measure and the legislation is headed to President Trump, who has indicated he will sign it into law.

While most of the attention has focused on a provision banning so-called pharmacy “gag” rules – a practice which Express Scripts emphatically does not engage in – the legislation makes an urgently needed change with biosimilar patent reporting.  Specifically, the legislation requires biologic and biosimilar manufacturers to report biosimilar patent litigation settlements to the Department of Justice (DOJ) and Federal Trade Commission (FTC) in the same manner as drug patent settlements. Express Scripts supported a bipartisan bill introduced earlier by Representatives John Sarbanes (D-Md.) and Bill Johnson (R-Ohio) and is pleased their proposal has been included in the final bill. We also applaud Sen. Susan Collins (R-Maine) for her work on this proposal in the Senate. 

The Medicare Modernization Act (MMA) of 2003 requires brand and generic manufacturers to file patent settlement agreements with FTC and DOJ. The intent is twofold: 1) to allow the agencies to take enforcement action on anticompetitive agreements and 2) to deter manufacturers from entering into anticompetitive settlements in the first place.

The FTC uses this information to publish an annual tally of anticompetitive reverse payment settlements and sue in federal court to prevent anticompetitive settlements from going into effect. This notification requirement, however, previously has not extended to biologic and biosimilar manufacturers, since the statutory requirement predates enactment of the biosimilars pathway by seven years.

Spending on biologic drugs in the United States totaled more than $105 billion in 2016, and approximately two-thirds of drug spending in Medicare Part B is on biologic drugs. In 2010, the Congress enacted the Biologics Price Competition and Innovation Act (BPCIA) with the intent of providing an approval pathway for lower-cost biosimilar products while preserving incentives for innovation. With an expected cost of 15% to 40% less than originator products, biosimilars create a significant savings opportunity across the U.S. health care system. Enhancing competition between biosimilar and biologic manufacturers is vital to reducing prescription drug costs for American families.

Two recent patent litigation settlements for biosimilar versions of Humira®, the top-selling drug in the United States with nearly $10.5 billion in sales in 2016, provide for significantly earlier launches in the European Union – October 16, 2018 – than in the U.S. marketplace, which will not see a Humira biosimilar until 2023 at the earliest. Express Scripts highlighted the need for additional scrutiny of biosimilar patent settlements earlier this year.

Kudos to Congress for enacting this sensible, bipartisan change.

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Lab Staff
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