CEI Joins American Consumer Institute in Support for the Biosimilar Red Tape Elimination Act: A Step Toward Lower Costs and Greater Access
Dear Chairman Cassidy, Chairman Guthrie, Ranking Member Pallone, Ranking Member Sanders:
We, the undersigned consumer, free-market, and taxpayer organizations, write to thank you for urging the U.S. Congress to consider the Biosimilar Red Tape Elimination Act (S. 1954). This bill which would remove an outdated distinction between biosimilars and interchangeable biologics, should be part of a wider-ranging discussion in Congress about increasing consumer choice, reducing patient costs, and lowering burdens on taxpayers while strengthening the innovation and access that has characterized the U.S. pharmaceutical system.
Currently, the FDA runs a dual-track system for biologics. They may be approved as an “interchangeable biosimilar” or simply as a biosimilar. Biosimilars must already demonstrate
their similarity to the reference product, as well as demonstrating no clinically significant differences in treatment. However, attaining interchangeable status requires an entirely separate application and costly switching studies. This represents an unnecessary barrier to competition that limits consumer choice and reduces consumer welfare. The Biosimilar Red Tape Elimination Act seeks to fix this problem by making biosimilars interchangeable by default.
Unlike generic small-molecule drugs, which pharmacists can substitute absent provider intervention, most biosimilars cannot automatically replace a brand-name biologic, even when the biosimilar is FDA-approved and functionally identical to its reference product. The presence of generics in a given market has already been shown to lower prices of a medication by 39 to 95 percent, depending upon the number of competitors present. Without automatic interchangeability, biosimilar products can be stuck in a bureaucratic bottleneck, unable to realize their full lifesaving and cost-saving potential.
To be clear, the policy environment must be made more hospitable to development and marketing throughout the pharmaceutical chain, by removing regulatory and tax-based impediments to them. The approval process for brand-name innovator drugs remains unacceptably complex. The coercive Medicare drug-price “negotiations” contained in the Inflation Reduction Act, along with reference pricing schemes such as “Most Favored Nation,” threaten the entire pharmaceutical ecosystem, including brands and biosimilars.
Pharmaceutical Benefit Managers (PBMs) and 340B drug discount programs deserve more scrutiny from Congress to determine whether some of their activities are impeding access and affordability (a risk that must be considered as S. 1954 advances). No other country in the world has afforded its citizens nearly 90 percent access to the world’s breakthrough brand discoveries and over 90 percent use of generics. This elegant balance must be preserved and strengthened.
Automatic interchangeability for FDA approved biosimilars would enhance patient access and reduce the cost of bringing lower-priced biosimilars to market, unlocking billions in savings. Biosimilar products have already saved patients and taxpayers billions, and by one estimate, stand to save between $38.4 billion and $125.5 billion in the 2021-2025 period. These savings can be magnified by making biosimilars more accessible to patients.
Biosimilars already undergo rigorous FDA review for safety, purity, and potency. The added costs of a separate application process for interchangeability status serve little to no clinical purpose. European nations do not impose this dual-track system and have had more robust biosimilar adoption without compromising patient safety.
We have tools to lower healthcare costs and improve patient access, but outdated regulatory obstacles block the way. As it addresses the many policy challenges affecting health care, Congress should act swiftly to modernize the approval process for biosimilar medicines, encouraging their availability and use in ways that rely on market forces and not on government mandates.
American patients deserve access to affordable and effective medicine, and Congress has the chance to help make that a reality within the biologics market via the Biosimilar Red Tape Elimination Act.
On behalf of patients, providers, taxpayers, and consumers, we again commend your leadership and initiative, and we look forward to working with the Committee on formulating pro-patient, pro-consumer, pro-taxpayer prescription drug policies in this Congress.
Respectfully,
Tirzah Duren
President
American Consumer Institute
Pete Sepp
President
National Taxpayers Union
Ryan Ellis
President
Center for a Free Economy
Daniel J. Mitchell
President
Center for Freedom and Prosperity
Jeremy Nighohossian
Senior Fellow and Economist Competitive Enterprise Institute
George Landrith
President
Frontiers of Freedom
Cameron Sholty
Executive Director Heartland Impact
Seton Motley
President
Less Government
Charles Sauer
President Market Institute
David Williams
President
Taxpayers Protection Alliance
James Taylor
President
The Heartland Institute
Joseph P. Fuhr Jr. Ph.D.
Professor Emeritus of Economics Widener University
Roslyn Layton Ph.D.
Tech Policy
Tim Doescher
Former George W. Bush Administration Official