Destined for Failure? An Analysis of the Biologics Price Competition and Innovation Act of 2009

Abstract

In 2010, Congress enacted the Biologics Price Competition and Innovation Act (“BPCIA”) as part of the large health care reform bill.  The BPCIA creates a statutory pathway for FDA approval of “biosimilars”––which are generic versions of biologic drugs.  Congress expects this new approval pathway for biosimilars to help lower biologics prices, just as generic drugs have significantly lowered pharmaceutical prices.

This Note argues that, for three main reasons, the BPCIA will not succeed in lowering drug prices to the same degree that generic pharmaceuticals have.  First, biosimilars are more expensive to develop than generic pharmaceutical drugs.  Manufacturers will be hesitant to enter the biosimilars market, leading to less competition.  Second, biosimilars will struggle more than generics to capture market share from the branded drug.  Third, lengthy exclusivity periods awarded to the branded biologic and the first interchangeable biosimilar will substantially delay biosimilar market entry.  This Note then concludes with suggestions for improving the BPCIA, both through potential amendments and regulatory process.