Using Bad Names: FTC Says FDA’s Naming Proposal for Biologics will Impede Competition from Biosimilars

By James C. Shehan –

On October 27^th, the FTC submitted comments objecting to the FDA’s draft guidance on Nonproprietary Naming of Biological Products.  In the comments and an accompanying press release, the FTC asserts that the proposal may reduce price competition in biologic drug markets, create unnecessary costs and impede efforts to harmonize names globally.   The FTC therefore asks FDA to reconsider its proposal and suggests alternatives with less impact on competition.

In its draft guidance (see our post here), FDA proposes adding a new, random suffix to the name of every approved biologic.  FDA’s rationale for the proposal is that, with the advent of biosimilars, it will improve pharmacovigilance and prevent inadvertent substitution of non-interchangeable biologics.

In its comments, the FTC proceeds very quickly to its rationale – biologics are expensive, prices are increasing rapidly, and without biosimilars, “patients have no other alternative” (sic).  Biosimilars would reduce prices and increase patient access.   

The FTC analysis has four parts.  First, the agency cites “standard economic logic” for the proposition that perceived product differentiation dampens price competition.  Next, the FTC states the naming proposal may increase product differentiation because “physicians may mistakenly believe that different suffixes indicate clinically meaningful differences between a biologic and its biosimilar.”  In the third part of the analysis, the FTC states that a single European example involving Hospira’s Retacrit epoetin zeta biosimilar “suggests” that biosimilars with distinct nonproprietary names are less commercially successful than those with the same nonproprietary names.  In the fourth part of its analysis, the FTC assets that the FDA proposal will create for pharmacists unnecessary “coding and system inefficiencies” and costs and will undermine global harmonization efforts.

 The first alternative proposed by the FTC is to simply rely on trade names to distinguish products.  In support, the agency cites a Pfizer statement that brand names are cited in about 99 percent of adverse event reports.  The second alternative proposed by the FTC is for healthcare professionals to rely on the FDA Purple Book (see our post here) for information about biologic products, just as they currently use the FDA Orange Book for small molecule drugs.

The FTC position has a few potential holes that may lead FDA to discount it.  For one, the data cited by the FTC to support the proposition that physicians will believe that different suffixes indicate clinically meaningful differences is indirect and limited.  For another, there are alternative explanations for the lesser commercial success of Retacrit epoetin zeta, such as differences between epoetin zeta and epoetin alpha, dates of market entry, and the commercial savvy of different manufacturers.

Possible flaws in the FTC’s proposed alternatives have previously been suggested by parties involved in the biosimilar naming debate.  For example, it has been pointed out that pharmacists primarily consult the Orange Book to learn the therapeutic equivalence ratings of potentially substitutable drugs, whereas the Purple Book does not contain therapeutic equivalence ratings because that concept does not exist for biologics.

Will the FDA give any more weight to the FTC’s comments than to those of other parties?  Stay tuned.