Chuck Grassley

United States Senator from Iowa

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Grassley, Klobuchar Urge Federal Trade Commission to Examine Whether “Pay for Delay” Tactics Are Keeping Cheaper Biosimilar Medicines Off the Market

Jun 22, 2018

WASHINGTON – U.S. Sen. Chuck Grassley (R-Iowa), Chairman of the Senate Judiciary Committee, and Sen. Amy Klobuchar (D-Minn.), Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, urged the Federal Trade Commission (FTC) to examine whether makers of biologic medicines are using strategies like “pay for delay” to hinder or delay biosimilars from entering the market. Biologics are a fast-growing class of medicines that are often more expensive than traditional pharmaceutical products. The use of “pay for delay” deals—the practice of brand-name and generic drug companies using pay-off agreements to delay the introduction of cheaper substitutes—and other anti-competitive tactics for biologics could make some critical prescriptions unaffordable for patients.

 

“Biologics play an important role in treating many serious illnesses and are among the fastest growing classes of therapeutic products…Without biosimilar competition, U.S. patients and payers will likely see additional price increases on biologics in the years to come,” the senators wrote. “In light of the importance of biosimilar competition to drive down prices and improve the quality of life for American patients, we urge the FTC to examine global patent settlements relating to biosimilars to ensure they are not in violation of antitrust laws.”

 

Grassley and Klobuchar have long supported efforts to combat anti-competitive tactics in the pharmaceutical market. The senators are the lead sponsors of the Preserve Access to Affordable Generics Act, which would limit “pay for delay” deals where brand-name and generic drug manufacturers use anti-competitive pay-off agreements to delay cheaper generic equivalents from reaching consumers. Earlier this Congress, Grassley and Klobuchar also introduced the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, which would address abuses and delay tactics that prevent generic companies from performing the necessary testing and distribution necessary for U.S. Food and Drug Administration (FDA) approval. The CREATES Act recently passed the Senate Judiciary Committee on a strong, bipartisan vote of 16 to 5. The Congressional Budget Office (CBO) has estimated that the bill would result in almost $4 billion in savings.

 

The full text of the letter can be found below:

 

Dear Chairman Simons:

 

We write to urge the Federal Trade Commission (FTC) to look into whether strategies to hinder or delay generics from entering the market – such as anticompetitive “pay for delay” settlement agreements that have plagued generic pharmaceutical markets for years – may be being utilized for settlements regarding biologic medicines.

 

As you are aware, the FTC estimates that these pay for delay settlements can cost consumers and taxpayers $3.5 billion in higher drug costs every year. Since 2001, the FTC has filed a number of lawsuits to stop these deals, and has worked with Congress on legislation to end pay for delay settlements. We would like to continue those efforts to combat these agreements and explore their impact on the biologic market.

 

Biologics play an important role in treating many serious illnesses and are among the fastest growing classes of therapeutic products. As they are more expensive than simple molecule pharmaceuticals, biologics constitute a substantial and increasing proportion of our nation’s healthcare costs. Without biosimilar competition, U.S. patients and payers will likely see additional price increases on biologics in the years to come.

 

For example, AbbVie Inc.’s (AbbVie) Humira is a biologic medicine that treats multiple inflammatory diseases and is the world’s top-selling prescription drug with annual sales of $16 billion, including more than $10 billion in the United States alone.

 

Over the past year, AbbVie entered into global settlement agreements of all intellectual property litigation with both Amgen Inc. (Amgen) and Samsung Bioepsis (Samsung) over their biosimilars of Humira. Under the agreements, Amgen and Samsung will not launch their products in the United States until 2023, but both companies will be able to launch their biosimilars into the European market in October 2018. This means that while European patients will benefit from biosimilar competition later this year, Americans may be without access to Humira biosimilars for almost five more years. While such terms in patent settlement agreements may not always be inappropriate, the incentives for parties to delay biosimilar entry are present, and biologic markets could be susceptible to patent settlement abuse.

 

In light of the importance of biosimilar competition to drive down prices and improve the quality of life for American patients, we urge the FTC to examine global patent settlements relating to biosimilars to ensure they are not in violation of antitrust laws.

 

Thank you for your prompt attention to this important matter. We appreciate the FTC’s efforts to ensure that potentially anticompetitive practices do not impede competition in the pharmaceutical market. 

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