FDA Regulation of Biosimilars

The Biologics Price Competition and Innovation Act (BPCIA) was enacted in March 2010 as part of the Affordable Care Act (ACA). The objective of the BPCIA, like the Hatch-Waxman Amendments of 1984 for generic copies of non-biological drugs, was to increase price competition and generate cost savings by authorizing approval of follow-on products that rely on pioneer research while at the same time maintaining incentives for innovation. This essay, in the just-released "FDA in the 21st Century" (Columbia University Press), explores the new biosimilar licensure scheme. Among other things, it concludes that obtaining licensure for a biosimilar biological product will require a significantly greater investment of time and resources than is required for obtaining approval of a generic drug, and that this – when combined with the fact that biosimilars will not automatically be deemed interchangeable – is likely to mean there will be fewer biosimilar market entrants per biological product than there are generic market entrants per drug. It also means that for the foreseeable future, the biosimilar marketplace is more likely to resemble the brand-to-brand competitive marketplace than the generic drug marketplace. The essay also discusses the impact of possible scientific advances (including the ability to demonstrate “fingerprint-like” similarity of biosimilars and their reference products) on cost savings, competition, and innovation, and it addresses several key open issues (such as nonproprietary names for biosimilars, and the issue whether and to what extent FDA will permit extrapolation of effectiveness from one indication to another) the resolution of which could similarly have a profound impact on cost savings, the nature of competition in the market, and incentives to innovate.