The new report from the Federal Trade Commission (FTC) on follow-on biologics (FOBs) is a must-read for anyone interested in the future profitability of drug channels companies (pharmacies, wholesalers, and PBMs). Here's a link to the complete 120 page report:
The latest spending data for specialty drugs show why momentum for follow-on biologics (FOBs) is building.
These data come from the most recent drug trend reports of the three largest PBMs:
- 2009 Medco Drug Trend Report (Medco Health Solutions)
- 2008 Drug Trend Report (Express Scripts)
- 2009 Trends RX (CVS Caremark)
The new FTC report suggests that FOBs will provide a relatively modest price reduction, noting:
"Only two or three FOB manufacturers are likely to attempt entry for a given pioneer drug product. These FOB entrants are unlikely to introduce their FOB products at price discounts any larger than between 10 and 30 percent of the pioneer products' price."
I think that's too pessimistic. I'll have some comments next week on the economic implications of FOBs for drug channels, especially with regard to potential reimbursement and cost dynamics.