[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: <a href="/cdn-cgi/l/email-protection#f79a808598959b9280849c9eb7918394d9909881"><span class="__cf_email__" data-cfemail="3d504a4f525f51584a4e56547d5b495e135a524b">[email protected]</span></a>. 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?

[[Page 51481]]

    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


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