[Federal Register Volume 73, Number 171 (Wednesday, September 3, 2008)]
[Notices]
[Pages 51479-51482]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-20399]
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FEDERAL TRADE COMMISSION
Public Workshops and Roundtables: Emerging Health Care
Competition and Consumer Issues
AGENCY: Federal Trade Commission
ACTION: Notice of Public Workshops and Roundtables and Opportunity for
Comment
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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'')
announces it will hold two workshops and roundtables in the fall of
2008 on emerging health care competition and consumer issues. They will
focus on two distinct areas in which competition and consumer
protection policies are implicated: (1) competition provided by
developing an abbreviated regulatory approval pathway for follow-on
biologic drugs; and (2) competition among health care providers based
on quality information. The workshops and roundtables will be held at
and administered by the FTC and their dates will be announced in a
separate public notice.
This notice poses a series of questions for which the FTC seeks
public comment. The Commission will consider these comments as it
prepares for the public workshops and roundtables. In the spring of
2009, the FTC will release a report that analyzes the potential impacts
on the marketplace of various policy options in these two areas.
DATES: Specific dates for the workshops and roundtables will be
announced shortly, along with an agenda. Comments on the questions
contained in this Notice must be received on or before September 30,
2008. In addition, any interested person may submit written comments to
any of the topics addressed during the workshops. Comments directed at
a particular subject considered in a workshop or roundtable must be
received no later than 30 days after the date of that workshop or
roundtable.
ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form. Comments should refer to ``Emerging
Health Care Competition and Consumer Issues--Comment, Project No.
P083901'' to facilitate the organization of the comments. Comments
containing material for which confidential treatment is requested must
be filed in paper form, must be clearly labeled ``Confidential,'' and
must comply with Commission Rule 4.9(c).\1\ Comments should not include
any sensitive personal information, such as an individual's Social
Security Number; date of birth; driver's license number or other state
identification number or foreign country equivalent; passport number;
financial account number; or credit or debit card number. Comments also
should not include any sensitive health information, such as medical
records and other individually identifiable health information.
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\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See Commission Rule 4.9(c),
16 CFR 4.9(c).
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Because paper mail in the Washington area, and specifically to the
FTC, is subject to delay due to heightened security screening, please
consider submitting your comments in electronic form. Comments filed in
electronic form should be submitted by using the following weblink:
(http://secure.commentworks.com/ftc-healthcarecompetition) and
following the instructions on the web-based form. If this Notice
appears at http://www.regulations.gov, you may also file an electronic
comment through that website. The Commission will consider all comments
that regulations.gov forwards to it.
A comment filed in paper form should include the ``Emerging Health
Care Competition and Consumer Issues--Comment, Project No. P083901''
reference both in the text and on the envelope, and should be mailed or
delivered to the following address: Federal Trade Commission, Office of
the Secretary, Room H-135 (Annex F), 600 Pennsylvania Avenue, NW,
Washington, DC 20580.
The Federal Trade Commission Act (``FTC Act'') and other laws the
Commission administers permit the collection of public comments to
consider and use in this proceeding as appropriate. The Commission will
consider all timely and responsive public comments that it receives,
whether filed in paper or electronic form. Comments received will be
available to the public on the FTC website, to the extent practicable,
at (http://www.ftc.gov/os/publiccomments.htm.) As a matter of
discretion, the Commission makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC website. More information, including
routine uses permitted by the Privacy Act, may be found in the FTC's
privacy policy, at www.ftc.gov/ftc/privacy.shtmwww.ftc.gov.
FOR FURTHER INFORMATION CONTACT: Michael Wroblewski, Bureau of
Competition, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580;
telephone (202) 326-2435; e-mail: [email protected]. Detailed agendas
for the workshop will be available on the FTC Home Page (http://www.ftc.gov).
SUPPLEMENTARY INFORMATION: Issues arising from the application of
competition and consumer protection law to health care have tremendous
significance for the U.S. economy and consumer/patient welfare. The
2004 Federal Trade Commission and Department of Justice Report,
``Improving Health Care: A Dose of Competition'' described the economic
significance of health care to U.S. productivity. It has become even
more so in the intervening four years. The Commission has an important
role to play in health care markets through its missions of maintaining
competition and protecting consumers.
The Commission intends to focus on two emerging areas that
implicate both its competition and consumer protection mission: (1)
competition provided by developing an abbreviated regulatory approval
pathway for follow-on biologic drugs;\2\ and (2) competition
[[Page 51480]]
among health care providers based on quality information. Through these
workshops and roundtables the Commission intends to analyze the
potential impacts on the marketplace of various policy options in these
two areas.\3\
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\2\ Follow-on biologic drugs refer to those drugs that are
sufficiently similar to an approved or referenced biologic product
to permit the follow-on applicant to rely on existing scientific
knowledge about the safety and effectiveness of the referenced
biologic product to obtain approval of the follow-on product. A
follow-on biologic drug is not necessarily interchangeable or
substitutable at the pharmacy level with the referenced drug
product.
\3\ On May 2, 2008, the FTC responded to questions from the
Subcommittee on Health of the Committee on Energy and Commerce
relating to the creation of a pathway for FDA approval of follow-on
biologic products. See (http://energycommerce.house.gov/Press_110/110-ltr.050208.respto040308.FTC.pdf.)
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I. Competition Issues Involving Follow-on Biologic Drugs
A. Regulatory Exclusivities and Follow-on Biologic Drug Competition
One of the central questions in establishing an abbreviated
regulatory approval pathway for follow-on biologic products involves
how to strike the right balance between regulatory exclusivity periods
and competition to spur the development of new, improved, and follow-on
biologic drug products. The present regulatory scheme governing
approval of non-biologic (or small molecule) generic pharmaceutical
drug products offers innovator companies incentives through regulatory
exclusivities that provide some degree of protection from new
competition in the marketplace, separate and apart from whatever patent
protection may exist. In addition, first generic drug applicants are
eligible for a 180-day exclusivity period during which other generic
drug applicants are precluded from receiving FDA approval to enter the
market. The question arises whether, or to what the extent, these
regulatory incentives should be adopted in creating a pathway for the
approval of follow-on biologic drug products. The FTC invites comments
on the following questions.
1. What is the likely competitive effect of the market entry of a
follow-on biologic competitor? Are there empirical models that predict
the nature of this competition based on existing biologic drug product
competition? How has competition developed between referenced and
follow-on products in European markets? Would referenced product
manufacturers lower their prices, offer discounts, and/or engage in
enhanced marketing activities?
2. What is the likely impact of a follow-on biologic product being
designated ``interchangeable'' (i.e., receiving an approval that would
permit pharmacists, without physician authorization, to fill a
prescription for the referenced product with the follow-on product)?
What are the prospects for the use of ``authorized follow-on
biologics'' in these circumstances? Do the answers to these questions
differ based on the type of biologic product involved?
3. What competitive concerns are raised by joint research and
development, supply, licensing, marketing, and distribution agreements
between referenced biologic manufacturers and their follow-on biologic
competitors? What would be the likely impact of a requirement that
agreements between referenced drug product manufacturers and follow-on
biologic applicants be filed with the FTC and the Department of Justice
Antitrust Division?
4. How would the prospect of competition from follow-on biologic
drugs influence research and development for new biologic drugs,
improvements to existing biologic drugs, and the timing and rollout of
new and/or improved biologic drugs? Does the market experience with
non-biologic generic pharmaceutical drug products provide insights into
these issues?
5. How does the method used by Medicare for reimbursement of
biologic drug products affect pricing and competition of referenced
biologic products? What factors are important for this effect and why?
How would the Medicare reimbursement system likely affect prices for
both the referenced and follow-on biologic products? For example, does
Medicare reimburse Part B drugs, including biological drugs, based on
the Average Sales Price of all the biological drugs whose National Drug
Codes (NDCs) reference the same Biologic License Application (BLA)? If
so, how would a follow-on biologic drug that does not reference the BLA
of the referenced drug affect the Medicare reimbursed price for
referenced drug product? How will these and other Medicare
reimbursement methodologies likely affect models of price competition
after follow-on biologic drug entry?
6. How are the patent portfolios claiming biologic drugs similar or
dissimilar to the patent portfolios that claim small molecule
(nonbiologic) drugs approved under the federal Food, Drug, and Cosmetic
Act (FDCA)?
7. Are the regulatory exclusivities currently provided to
pharmaceutical drug products in the FDCA appropriate for new biologic
drugs and/or significant improvements to existing biologic products?
Are they appropriate for specific types of biologics? Why or why not?
8. What are the appropriate factors to consider when determining
the optimal length of regulatory exclusivity periods for biologic drug
products? Do these factors change based on the type of referenced
product involved, the extent of competition facing the referenced
product, or patent portfolios claiming the referenced product, and if
so, how?
9. How does the European Medicines Agency's approach to regulatory
exclusivities in its abbreviated regulatory approval pathway for
follow-on biologics inform the U.S. approach?
10. Is a marketing exclusivity period necessary to encourage
companies to develop follow-on biologics and to seek their approval by
the FDA? If so, why, and how should such an exclusivity period be
structured?
B. Patent Dispute Resolution Issues
One of the features of the Hatch-Waxman Amendments to the FDCA is a
regulatory structure that encourages the initiation of patent
litigation early in the FDA approval process for a generic drug
application that challenges a patent claiming the innovator's drug
product (a Paragraph IV application). Since 1998, the FDA has faced
many fact situations that have required the agency to interpret this
aspect of the Hatch-Waxman regulatory scheme. Many of these
interpretations have been challenged by industry participants,
resulting in substantial court review of the FDA's decisions. Moreover,
the FTC has taken numerous enforcement actions against brand and
generic drug manufacturers that have allegedly abused this regulatory
structure.\4\ In light of these experiences, the FTC invites comments
on the following questions and topics.
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\4\ See FTC, Overview of FTC Antitrust Action in Pharmaceutical
Services and Products (March 2008), available at http://www.ftc.gov/bc/0608rxupdate.pdf.
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1. Would it be important to have the litigation of any patent
disputes proceed concurrently with the abbreviated FDA approval process
for follow-on biologics? Why or why not? What has been learned from the
experience under Hatch-Waxman about the incentives necessary to
encourage early resolution of patent issues?
2. How long might the approval process for a follow-on biologic
application take? What factors might influence this timing?
3. How might differences between patent portfolios for small
molecule drugs and biologics affect patent litigation involving follow-
on biologics? How long might patent litigation involving a follow-on
biologic product take?
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4. When is it in the interest of a referenced biologic drug
manufacturer to resolve patent issues prior to marketing by a follow-on
applicant? When is it in the interest of a follow-on biologic applicant
to resolve patent issues prior to marketing its follow-on biologic?
When is it in the interest of either party to resolve patent issues
following commercial marketing of the follow-on product?
5. What are the legal impediments facing a follow-on biologic
applicant that has not been sued for infringement to obtaining a
declaratory judgment on patent infringement or invalidity issues prior
to commercial marketing of its follow-on product?
6. Are regulatory exclusivities needed to encourage follow-on
biologic applicants to challenge patents? Why or why not?
7. What opportunities will biologic drug manufacturers and follow-
on applicants have to manipulate proposed new regulatory obligations
(e.g., application notification obligations, declarations of patents
claiming biologic drugs, etc.) and exclusivity periods surrounding a
concurrent patent resolution process? What are the prospects for the
improper use of citizen petitions to delay approval of follow-on
biologic applications?
8. How might referenced biologic product manufacturers and follow-
on biologic applicants structure patent settlement agreements given the
competitive dynamics arising from the marketing of follow-on biologic
drugs? What incentives might exist for these companies to enter
anticompetitive settlements? Should patent settlement agreements be
filed with the antitrust agencies? What would be the likely effect of
the filing requirement on settlements?
II. Competitive Significance of Health Care Quality Information
Competition in health care markets is enhanced when purchasers have
information to help evaluate the cost and quality of the services
purchased. The 2004 Health Care Report found, however, that information
regarding health care prices and quality is often difficult to measure
and obtain and is not necessarily reliable. A 2008 FTC Workshop on
Innovations in Health Care Delivery considered ongoing issues about
health care price and quality transparency. Panelists at the 2008
Workshop discussed the potential importance to consumers of relevant
price information, including out-of-pocket price information. Also
discussed were forms of transparency that may be anticompetitive. For
instance, public disclosure of confidential contract rates between
providers and payers could be anticompetitive because it could foster
coordinated pricing. The FTC seeks to build on its 2008 Workshop to
explore further the competitive significance of qualitative health care
information from the purchasers' viewpoint (i.e., the demand side). The
FTC will explore whether or how quality information can be used to help
purchaser decision making. The FTC will examine the extent to which
there is demand is for high quality health care, the attributes of
quality information that motivate purchasers to select high quality
providers, and the ramifications of quality-based competition on the
availability of health care. Along these lines, the FTC will explore
whether providers delivering high quality services are rewarded with
more business (and/or greater revenue) and whether those failing to do
so either improve or are penalized with less business (and/or lower
revenue). In this context, purchasers include consumers, employers,
insurers, hospitals, doctors, and others who can use quality
information in their decision making. The FTC also will examine the
costs and benefits of different federal policies that could be used to
facilitate the measurement, collection, and reporting of health care
provider quality information to these various purchasers.
The FTC invites comments on the following issues and topics set out
below. The FTC encourages comments that analyze the results of recent
experiments, demonstration projects, and initiatives designed to report
health care quality measures to various types of purchasers.
A. Purchaser Decision Making and Quality Information
1. What decisions do quality information help different types of
purchasers make?
2. What are the relevant times at which purchasers make health care
decisions? What quality information about health care services and
providers should be presented at these critical junctures?
3. What quality information is the most competitively significant
for different types of purchasers? Are different types of data (e.g.,
licensing information, compliance with process measures, customer
satisfaction, outcomes, outcomes per dollar spent) appropriate for
different purchasers and purchaser decisions? How should any
differences in measurement of the same provider or service (over the
same time frame) be reconciled?
4. Does health care quality vary based by medical condition,
provider, and patient? Does it vary over time? If so, how should
quality measures be adjusted to take these differences into account?
5. What information is needed to measure the efficiency of a
provider? What is the proper weighting of quality and resource use in
an efficiency measure?
6. How broad a range of differences among health care providers and
services is needed to motivate purchasers to switch service providers?
7. How should regional variations be accounted for in showing the
results of quality measures? Should local, state, regional, or national
benchmarks be used to show differences among service providers? Why or
why not?
8. How does the framing of quality information affect the
purchasers' decisions? Do symbols and summaries affect purchaser
understanding of health care quality information?
9. What has been learned from public and private quality reporting
initiatives that can aid the competitive process?
10. What are the tradeoffs between quality-based competition and
the availability of health care?
B. Barriers To Developing and Implementing Quality Measures
1. What barriers--clinical, marketplace, regulatory, or other--
restrict the measurement, collection, and reporting of health care
quality information? Can health care quality be measured such that it
is of value to purchasers in their decision making?
2. Do providers and insurers have business reasons to develop and
implement public reporting of quality measures?
3. How should quality measurements deal with organizational
variation on the supply side (e.g., solo physician practitioners, small
physician groups, integrated physician groups, etc.). If so, how should
the measures be adjusted to consider this variation?
4. How does the development of reimbursement and payment reform
affect the development of quality measurements?
5. Several private and public entities have developed standards to
measure health care quality. Are concerns about provider capture of
these organizations relevant in this context?
C. Federal Policies To Facilitate Quality Information Collection and
Reporting
1. What federal policies can help overcome any marketplace barriers
to the measurement, collection, and reporting of quality information?
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2. How can government use its role as a payer (e.g., Medicare,
Medicaid) to facilitate the development and use of quality information
more broadly?
3. What are the costs and benefits of a single entity developing
the quality measures, collecting and analyzing the data, and reporting
the results? What are the costs and benefits of governmental
involvement in these activities?
4. How should federal, state, and private sector efforts to measure
and report on health care quality be harmonized so that purchasers
obtain the benefits of cost and quality information?
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. E8-20399 Filed 9-2-08: 8:45 am]
BILLING CODE 6750-01-S