FDA Biosimilar Action Plan Aims for Affordability Through Competition

Commissioner Scott Gottlieb advocated for the plan during a Brookings Institution presentation.

The central theme in the Food & Drug Administration's "Biosimilar Action Plan" unveiled Wednesday is that competition can and should be leveraged to reduce drug prices.

FDA Commissioner Scott Gottlieb made the case for the plan during a presentation at The Brookings Institution, arguing that shifts in the marketplace in recent years have opened up opportunities that should be met with new models.

"Our current payment system, which reimburses drugs based on their average sales price, was designed in a single-source world," Gottlieb said. "It was a market of biologics where there was typically only one drug in a category."

Gottlieb, who worked for the Centers of Medicare & Medicaid Services in the early 2000s, said he was working at Medicare when the current system was designed and implemented. Things have since changed, he added.

"Now most of these biologics categories are highly competitive, with lots of different products aimed at the same target. Yet the current payment system doesn’t take full advantage of all this therapeutic competition," Gottlieb said, advocating for a new approach.

"An ideal system would reimburse biologics in a competitively bid scheme, where we could take full advantage of the multi-source competition," he said.

While the FDA may not be involved in the demand-side of the drug-buying equation, the FDA's action plan outlines four areas in which it can focus its energy to maximize biologic competition:

1. The processes by which biosimilars are developed and approved can be made more efficient.
    
2. Scientific and regulatory information can be provided with greater clarity to those seeking to develop biosimilars.
    
3. Patients, clinicians, and payers can be more effectively educated on biosimilars.
    
4. The FDA can combat unfair delays in competition by companies that game FDA requirements for their own gain.
    

"The branded drug industry didn’t build its success by being business naïve. They are smart competitors," Gottlieb said. "But that doesn’t mean we need to embrace all of these business tactics, or agree that they’re appropriate."

FDA Biosimilar Action Plan by HLMedit on Scribd