Biologic Drugs, Biosimilars, and Barriers to Entry

Abstract

Biologic drugs represent an important category of drugs that improve health outcomes in this country. Yet, these cutting-edge drugs are often prohibitively costly, preventing access for many Americans. Recognizing the need for more affordable, generic substitutes for biologic drugs — or biosimilars — Congress recently created a biosimilars approval pathway that would enable these cheaper biologic drugs to obtain FDA approval and reach patients more quickly. Unfortunately, original biologics manufacturers have sought to extend their current monopoly profits by erecting various legal and regulatory barriers to entry. Their legal maneuvers take many forms, from delaying approval of safe biosimilars to abrogating previous commitments to international drug-naming protocols to circumventing Congressional intent for biosimilar substitution. Regrettably, these policies reduce competition in the market for biologic drugs, impede drug innovation, increase drug costs, and limit patient access to these important medications. This Article explores this conflict between biologics and biosimilars, and the consequences that barriers to biosimilar entry in this market will create.

Keywords: biosimilars, biologic, FDA, barriers to entry, biologicals, BPCIA

JEL Classification: I1, K1, K32, I11, I18