The Hatch-Waxman Act, passed by Congress more than 30 years ago, provides a regulatory and judicial framework to expedite generic entry into U.S. prescription drug markets. For many drugs, the Act has succeeded in lowering patent-related barriers to generic drug entry, thereby spurring additional competition that has led to lower drug prices. In 2010, Congress created a similar framework for biosimilar drug development under the Biologics Price Competition and Innovation Act. Concern about rising drug prices has caused policymakers to question whether there are obstacles to generic entry that prevent competition from keeping prices in check.
The first session explored generic drug markets, including considerations that may preclude entry after relevant patents have expired. Panelists will discuss price and non-price factors that may influence entry in these markets. The second session evaluated intermediaries in the pharmaceutical supply chain, focusing on pharmacy benefit managers (PBMs) and group purchasing organizations (GPOs). Panelists discussed how the contractual relationships between intermediaries, manufacturers and health plan sponsors ultimately affect the prices consumers pay for prescription drugs. Throughout the day, speakers discussed means to encourage entry and eliminate competitive impediments in prescription drug markets.
To aid our analysis of these issues and various proposals intended to address them, the staff of the Federal Trade Commission seek public comment from interested parties. In particular, we invite comment on the following questions:
- Do generic drug manufacturers have sufficient incentives to enter markets where the brand drug is off-patent? Do policymakers or market participants have a role in providing incentives to encourage entry decisions that better align with the public interest?
- Some report strategies to reduce generic drug competition when the branded drug is off-patent. Are these reports accurate? If so, what steps are taken to reduce competition? If not, are there other reasons why generic entry is not seen as robust? What can be done?
- What role do intermediaries, such as pharmacy benefit managers (PBMs) and group purchasing organizations (GPOs) play in prescription drug pricing, consumer access, and quality? What are the benefits and costs of intermediaries in the pharmaceutical supply chain? Has consolidation affected price, access, or quality?
- How do companies assess the benefits, costs, and risks of contracting with intermediaries? How well do consumers understand intermediaries’ roles? Is more information necessary?
- How should stakeholders evaluate proposals to reduce drug prices and increase consumer access in prescription drug markets? What role can the FTC play in addressing these issues?
ATTENDING THE WORKSHOP
The workshop was held at the Constitution Center, 400 7th Street, SW, Washington, DC 20024. The workshop was free and open to the public.
The workshop was webcast live.