House Passes Key Components of the Biosimilars Competition Act of 2018

In July, Congressman John Sarbanes, D-Maryland, introduced the Biosimilars Competition Act of 2018 in the United States Congress House of Representatives. Key components of the bipartisan bill authored by Congressman Sarbanes were passed this week by the House.

The bill will require both biologic and biosimilar developers to report agreements to the Federal Trade Commission (FTC) if they keep lower-cost drugs off the market. Such agreements, often referred to as “pay-for-delay” deals, have been coming under more scrutiny this year, as agreements between brand name drug makers and biosimilar developers have garnered more attention.

Click here to read more about pay-for-delay deals.

“We must take every step possible to prevent Big Pharma from continuing to raise drug prices on hardworking American families,” said Sarbanes. “This bill will help lower prescription drug costs by bringing more affordable biosimilar drugs to the market.”

According to a 2013 report from the FTC, pay-for-delay deals have increased yearly. In 2005, 3 such deals were made between brand name and generic manufacturers. In 2012, 40 pay-for-delay deals were made. The report found that these deals cost consumers an estimated $3.5 billion each year.

Drug maker AbbVie has made the news this year by entering into no fewer than 3 agreements with biosimilar developers which have resulted in keeping their respective adalimumab biosimilar products off the market in the United States until 2023. Notably, Senators Chuck Grassley R-Iowa, and Amy Klobuchar, D-Minnesota, urged the FTC to investigate AbbVie’s settlements with these developers to assess whether they were pay-for-delay agreements.

According to an unofficial estimate by the Congressional Budget Office (CBO), the Biosimilars Competition Act of 2018 will save about $100 million from 2019 to 2028. “The Biosimilars Competition Act will not only help bring lower-cost biosimilar drugs to market more quickly, but also help pay for two other fixes that will end pharmacy gag clauses and increase Americans’ access to affordable generic drugs,” said the CBO.

One of these fixes, titled the “Patient Right to Know Drug Prices Act,” was passed in the Senate by a vote of 98 to 2 earlier this month. The bill, introduced in March by Senators Susan Collins, R-Maine; Claire McCaskill, D-Missouri; and Debbie Stabenow, D-Michigan, eliminates pharmacy “gag clauses,” which are contractual agreements between pharmacy benefit managers and pharmacies that prevent pharmacists from telling consumers when they could spend less on their medication by paying out-of-pocket.