Earlier this month, U.S. lawmakers debated the key issue of the exclusivity period afforded to biologic drugs - those drugs manufactured using living tissue and micro-organisms. The hearing was called to discuss a Federal Trade Commission (FTC) report "Follow-on Biologic Competition" released on June 10, 2009. The FTC report summarized conclusions following public roundtables and comments, and suggested that competition for follow-on biologics (FOBs) would be lower than for regular generic drugs because of the substantial regulatory and manufacturing costs for FOB approval, lack of automatic substitution with the innovator product, concerns regarding safety and efficacy, and various existing innovator marketing strategies. The FTC had concluded that the 12- to 14-year regulatory exclusivity period was too long to promote innovation because of anticipated retention of market share even upon FOB entry, and suggested a 180-day exclusivity period for a first generic akin to the Hatch-Waxman model.

An important aspect of the debate was the ability of biotechnology companies to recoup their costs, with some challenging the industry claim that the 12- to 14- year exclusivity period was required. Others were disappointed by the failure of the committee to bring in scientific experts on issues of safety and efficacy. Based on the FTC's report, only drugs with an excess of $250 million of annual sales would attract FOB competition, with only two or three generic entrants.

The full FTC report can be found at:

http://www.ftc.gov/os/2009/06/P083901biologicsreport.pdf