Senate passes bill for FTC scrutiny of biosimilar 'pay-for-delay' deals
- The U.S. Senate passed a bill Monday that would require disclosure of settlements reached between biologic and biosimilar developers to the Federal Trade Commission, revising an existing law that governs generic drugs to include biosimilars.
- The tweak was part of the Patient Right to Know Drug Prices Act, which mainly focuses on nixing so-called gag clauses that prevent pharmacists from informing patients when paying for drugs out-of-pocket would be cheaper than using insurance. The bipartisan bill passed 98-2 with Sens. Rand Paul, R-Ky., and Mike Lee, R-Utah, the lone dissenters.
- The legislation must still pass muster with the House of Representatives. Several bills before the House's energy committee could wind up including this change.
This bill would update a law that previously only covered small-molecule drugs and make it easier for the FTC to scrutinize agreements that makers of biologics and biosimilars reach.
Under the proposal, these companies would be required to file all agreements with the commission that regard manufacturing, marketing or sale of the branded or copycat drug or the one-year period referred to in the Public Health Service Act for biosimilars.
Sens. Susan Collins, R-Maine, and Claire McCaskill, D-Mo., introduced the legislation in March. While it primarily relates to pharmacy gag clauses on prescription prices, the biosimilar angle was tacked on in July.
It remains to be seen how — or if — pay-for-delay deals will be an issue with biosimilars.
AbbVie's mega-blockbuster Humira (adalimumab) would be the highest-profile potential test of stepped-up scrutiny on settlement deals. The pharma has reached agreements with Amgen, Samsung Bioepis and Mylan to push off entry of a biosimilar version of the drug to 2023 in the U.S.
Patients for Affordable Drugs, a patient group, has highlighted the deal with Samsung Bioepis in particular. David Mitchell, the groups president, wrote an open letter to the FTC's acting chair in April requesting the commission "investigate AbbVie and take appropriate legal action" on the agreement with Samsung Bioepis.
AbbVie has patents on Humira that extend past 2030, although the so-called "composition-of-matter" patent on the drug expired in December 2016.
The concern over Humira settlements has made it to Wall Street, too. On a July 12 earnings call, one analyst asked CEO Richard Gonzalez about "some saber rattling around settlements." Gonzalez defended the Humira deals in response, saying that it's nothing "close to gaming the system or operating around some set of loopholes."
In particular, Gonzalez contended that none of its settlements involving Humira have AbbVie paying the biosimilar competitor, a typical feature of "pay-for-delay" deals. In each, AbbVie granted a license for sale of the copycat.
Robert Cerwinski, an intellectual property lawyer at the law firm Goodwin Procter, noted last October the FTC has yet to weigh in on pay-for-delay with biosimilars, but suspected the commission may in the future, as the fundamental logic holds the same from generic law to biosimilar law established by the Biologics Price Competition and Innovation Act of 2009.
"Because the policies behind the Hatch-Waxman laws and the BPCIA are roughly aligned, we may very well see some scrutiny by the Justice Department and the FTC of such settlements," Cerwinski said on Oct. 3, 2017.
It doesn't appear the FTC has weighed in since those comments.
Going forward, there appear to be two options for this bill to clear the House.
The first would be a bill introduced by Rep. Lloyd Doggett, D-Texas, in June. Although the most recent draft only focuses on the gag clause element and does not touch on the biosimilar angle, that could be added if it comes out of committee.
The other would be legislation filed in July by Democratic Maryland Rep. John Sarbanes, called the Biosimilars Competition Act of 2018, which would require such filings to go to the FTC and Department of Justice.
Both bills were referred to the House Committee on Energy and Commerce.