In a decision that will displease many biotech companies, the FTC is recommending against 12 to 14 years of generic competition protection for biologic drugs. The agency's reasoning? Biologics are difficult and expensive to produce; therefore, competitors will only enter the market for drugs worth over $250 million a year. And even at that, the FTC says, there won't be many companies looking to compete with branded versions of the drugs. Market-share will be tough for follow-on biologics to come by due to the fact that some patients may shy away from using knock-offs of complex meds. The FTC estimates that generic biologics will only result in a 10 to 30 percent, though that's still a significant cut considering many drugs cost tens of thousands of dollars a year.
"...[T]he lack of automatic substitution will slow significant market share acquisition by FOB [follow-on biologic] products. As a result, pioneer manufacturers are likely to retain 70 to 90 percent of their market share and, therefore, will likely continue to reap substantial profits years after entry by FOB drugs."
Biotech drug makers have been advocating 12-14 years of generic competition protection due mainly to the fact that the R&D process for biologics is lengthy, and the cost substantial. A bill introduced in March--which quickly gained kudos from the industry--recommended 12 years of marketing exclusivity for biologics. But it's competing with a bill offered by Henry Waxman that provides only five years of exclusivity for biologics. Industry advocates are no doubt hoping the final number of years will fall somewhere well above that.
- here's the FTC report
- read this Reuters article for more
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