How Biosimilar Disparagement Violates Antitrust Law

Biologics, the next wave of pharmaceutical products, offer pathbreaking advances in treating cancer, arthritis, chronic diseases, and other conditions. Their promise, however, is matched by their high price. More complex than brand-name small-molecule drugs, biologics could cost patients hundreds of thousands of dollars a year.

The hope, then, is that just as with generic drugs, competition from follow-on products known as biosimilars will lower prices. In fact, a recent report from the Association for Affordable Medicines found that biosimilars could “save America tens of billions of dollars over the next decade.” But it warned that these savings would materialize “only if patients can access” the biosimilars. One main reason they might not is disparagement.

Biologic companies have raised ominous warnings that biosimilars are not the same, with differences posing grave safety consequences. This can violate antitrust law.

Biosimilars are nearly the same as biologics. In fact, they are required to be “highly similar” to and have “no clinically meaningful differences” from biologics. To show that it is highly similar, a biosimilar manufacturer “extensively analyz[es]…the structure and function of both the reference product and the proposed biosimilar,” using “[s]tate-of-the-art technology…to compare characteristics…such as purity, chemical identity, and bioactivity.”

The manufacturer also conducts studies to show that there are no clinically meaningful differences in “safety, purity, and potency.”

Biologic Companies Are Violating Antitrust Law

How is antitrust law being violated? First, biologic manufacturers are likely to have monopoly power. There has been limited entry of biosimilars in the U.S. Biologics make up eight of the top 10 highest-selling drugs in the country. And manufacturers charge astronomical prices, as much as hundreds of thousands of dollars a year.

Second, biologic manufacturers’ statements and omissions could constitute exclusionary conduct. There are several types of deception: Manufacturers make foreboding safety threats. They warn that biosimilars act differently from, or are not identical to, reference products. And they fret that biosimilars do not satisfy interchangeability standards.

Each of these types of statements, even though they may be nuanced, deceives. A product that is “highly similar” to and has “no clinically meaningful differences” from the reference product cannot act differently in the body. Similarly, claiming that the biosimilar is not identical is irrelevant; in fact, it is “normal and expected within the manufacturing process” for even batches of biologic products themselves to reveal “[s]light differences.”

Nor does a biosimilar’s failure to attain interchangeability mean that it is less safe. This status only makes sense for biosimilars that would be dispensed at the pharmacy counter, where substitution takes place. But each of the biosimilars that has entered the U.S. market so far has been dispensed not in this setting, but through injection or infusion in the hospital.

Deceptive Statements

The Federal Trade Commission has explained that companies can engage in deception not just by issuing false statements but also by making misleading statements and omitting information. Similarly, in February, the FDA explained in draft guidance that “representations or suggestions that create an impression that a biosimilar is not highly similar to its reference product are likely to be false or misleading.”

In evaluating antitrust liability for deception, some courts analyze an array of factors to ensure that the conduct affects competition. A plaintiff challenging biosimilar disparagement would be likely to satisfy these factors. Because the statements warn of health concerns, they would be material. As representations about safety, they would be likely to induce reasonable reliance. And a biosimilar manufacturer would not be likely to readily neutralize the disparaging statements.

Other courts apply a more holistic approach. Such a flexible framework makes it even more likely that an antitrust claim would be successful. It would recognize the irreversible effects of locking new patients into biologics because they do not trust biosimilars. And it would consider disparagement’s effects in fortifying entry barriers cementing biologics’ power.

In short, biologic manufacturers are likely to have monopoly power and engage in exclusionary conduct, thereby violating antitrust law.

In warning consumers about safety harms, biologic manufacturers make statements that sound reasonable on their face. But they seek to sow fear, not informing patients that there are no clinically meaningful differences between biologics and biosimilars.

Antitrust liability would prevent biologic manufacturers from stifling more affordable biosimilars in their cradle by ominously implying false safety concerns. In the process, antitrust promises to help U.S. consumers afford lifesaving medicines.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Michael A. Carrier is Distinguished Professor of Law at Rutgers Law School.