Archive for July, 2009
Joint Statement of Consumer Groups Regarding Adoption of Industry-Backed Eshoo-Barton Amendment to Health Care Reform Legislation
We are deeply disappointed by the decision of the House Committee on Energy and Commerce to adopt the BIO and PhRMA-backed amendment on generic biologics. Instead of opening the door to less expensive generic drugs and the potential for enormous savings to patients and healthcare providers, including federal and state governments, this amendment will insure that BIO and PhRMA companies can charge monopoly prices for a minimum of 12 years. The proposal that passed today will also make it much easier for brand companies to wait until the eleventh hour to make minor changes to old biologics, and then renew the 12 year marketing monopoly an unlimited number of times.
Neither the brand industry nor the supporters of the amendment have ever credibly explained why the manufacturers of brand biologics should be entitled to a guaranteed 12 years of exclusivity, which is in effect 12 years of monopoly prices, when the patent system has been adequate to protect innovation in every other industry. They have also never explained why 12 years of exclusivity is appropriate for the manufacturers of biologics, when since 1984 the manufacturers of chemical drugs have thrived with five years of exclusivity.
We are also disappointed that the majority of the Committee ignored the recent study of the Federal Trade Commission, which concluded (1) that there is no basis for granting biologics manufacturers 12 years of exclusivity and (2) that there is no evidence that their patents are weaker than the patents on chemical drugs. There are many competing studies on this subject, but the FTC is independent and unbiased and has deep expertise in laws pertaining to patents and competition.
We can only conclude that the Committee’s action reflects the continuing influence and power of Big Pharma, which has made adoption of the Eshoo-Barton amendment a high priority. We pledge to fight on the floor of the House and Senate and in every other forum that is available for a viable generic biologic program which will allow the Food and Drug Administration to approve generic biologics once valid patents have expired. If meaningful changes cannot be made, then we urge Congress to drop the generic biologics amendment from healthcare reform legislation.
National Coalition on Health Care (NCHC)
American Federation of State, County and Municipal Employees, AFL-CIO
The American Medical Student Association (AMSA)
Breast Cancer Action
CPATH (Center for Policy Analysis on Trade and Health)
Department for Professional Employees, AFL-CIO
Health GAP (Global Access Project)
KEI (Knowledge Ecology International)
Latinos for National Health Insurance
National Physicians Alliance
National Research Center for Women and Families
Northwest Federation of Community Organizations
OWL – The Voice of Midlife and Older Women
Salud y Farmacos
Universities Allied for Essential Medicines (UAEM)
U.S. PIRG (Public Interest Research Group)
Consumer & Health Groups, State Legislators, Experts React to Vote to Add Generic Biotech Drug Proposal to Health Care Reform Bill
*FOR IMMEDIATE RELEASE*
Following are comments from consumer, public health and student groups, state legislators and experts following today’s House Energy & Commerce Committee vote to add the Eshoo-Barton-Inslee generic biologics (biogenerics or biosimilars) amendment to America’s Affordable Health Choices Act of 2009.
* Sarah Rimmington, Attorney, Essential Action, Access to Medicines Project, Tel: (202) 387-8030 or Cell: (202) 422-2687, [email protected] *
“The biogenerics proposal adopted today torpedoes the objective of health care cost containment. The Eshoo proposal only offers the illusion of price-lowering generic competition for biotech drugs like Roche-Genentech’s $72,000 per year cancer treatment Herceptin. By making cheap and easy tweaks to old biologic drugs, Big Pharma will be able to obtain near perpetual monopolies and keep affordable biogenerics from pharmacy shelves several decades after their patents expire.
It’s hard not to wonder if the $1 million per day Big Pharma and Biotech spends lobbying influenced today’s vote.
But it’s not too late. Congress can stop Pharma from continuing to price gouge the American public by fixing the biogenerics proposals on the floor of the House and Senate. President Obama can demand changes before signing a health care bill into law We can’t afford for them not to.”
* Larry McNeely, Health Care Advocate, US PIRG (Public Interest Research Group), (202) 546-9707 x 303, [email protected] *
“The biologics measures passed today are nothing more than a bailout for Biotech and Pharma.”
Joana Ramos, MSW , Director, Washington Coalition for Prescribing Integrity and cancer survivor, Seattle, WA (206) 229-2420, [email protected]
“Patient and their families need relief from the exorbitant, and ever-escalating prices, being charged for biologic medicines. Medical innovations are of no value without access. Limiting the period of marketing exclusivity to 5-7 years for these new drugs is an important first step to solving the problem.
Almost every week my colleagues and I work with, or seek help for, not only the uninsured, but increasingly also insured patients facing food insecurity, evictions, foreclosures on their mortgages, bankruptcy, and even relapse and untimely death just because of the price of biologic drugs. In one recent case, an insured college student with rheumatoid arthritis had a flare-up so severe that he had to be hospitalized, after his 6-month co-pay grant for Kineret from an assistance program ended. Because it took several more months for him to be able to get into a new program, his parents, members of the squeezed middle class, then had to put the monthly co-pays of $650 for Kineret on their credit card during the wait. They now struggle with that debt plus the close to $10,000 of the “patient responsibility” portion of the hospital bills, plus insurance premiums that have almost doubled since 2006. Patients with RA are thought to need these drugs for the rest of their lives.
Compared to many biologic cancer drugs however, Kineret is a “bargain,” at some $1400/month. Drugs like Herceptin and Tykerb run in the multiple thousands of dollars per month, and 4-figure co-pays are common.”
James Love, Director Knowledge Ecology International (KEI),
(+1) (202) 361-3040, [email protected]
“Health Care reform is both about extending coverage to everyone, and being smarter about how we spend money. A 12.5 year or more monopoly for biologic medicines, without any safeguards to protect consumers and taxpayers is hardly smart. Congress could have embraced a shorter monopoly, or provided protections against excessive pricing. The Eshoo-Barton amendment also makes it easier for companies extend the monopoly, through small changes in the products, and by creating areas where litigation over nuances in the incumbent friendly rules will block generics.
The negotiations over biogenerics is an example of how the US Congress can be controlled by big money, on a topic that concerns everyone as consumers, employers and taxpayers. We can’t have a sustainable system for access to health care without paying attention to costs.”
* Sidney M. Wolfe MD, Public Citizen, Acting President and Director, Health Research Group (202) 588-7735, [email protected] *
“At a time when there is a need to control health expenditures, this unwarranted patent gift to the Biotech industry guarantees that tens of billions of dollars will be wasted by shutting out, for an additional 7 years or more, generic companies from making equally safe and effective biogeneric drugs.”
*Sara Crager, MD/PhD Candidate ’12, Yale University, Universities Allied for Essential Medicines (UAEM), (203) 444-4805 *
“I hope to one day see my research developed into biologic therapeutics. While fostering innovation incentives is key to ensuring this future development, ultimately, I want my current and future research to have the greatest possible impact on humanity. As such, I want the fruits of my research to be available as widely as possible as soon as possible.
Particularly in a university setting, where the vast majority of research is supported by public funding, advancing broad access to innovative new treatments should be the priority, not profit. The American Association of Universities (AAU) has come out in support of the proposal that passed today, which contains data exclusivity and ever-greening provisions that go far beyond the need to preserve the incentives for innovation. I find it paradoxical that the university community that is training me to make scientific discoveries to improve the human condition is taking a stance that obstructs the potential future impact of these discoveries.”
* Ethan Guillen, Executive Director, Universities Allied for Essential Medicines (UAEM) (Cell) (775)287-2553, [email protected] *
“In a year that we were promised change, it is exceedingly disappointing to see Congress continue to play the role of the guardian of corporate profits rather than the champion of patients. Even more disappointing is the role universities, specifically the American Association of Universities, have played in pushing for this unprecedented monopoly for pharmaceutical companies, which in the end will harm patients in the U.S. and the poor in developing countries. There is simply no evidence that such a long period of exclusivity is necessary to promote innovation. Worse, the evergreening provisions that have emerged could extend these monopolies for decades.
The universities regularly speak of their devotion to improving access to medicines in poor countries, while Congress speaks of restraining out of control health care costs, but their actions speak louder than their words. We must continue to fight to ensure that the final bill reasonably addresses biosimilars with an appropriate balance between access and innovation.”
*Maine Representative Sharon Treat, Executive Director, National Legislative Association on Prescription Drug Prices (NLARx), [email protected] or [email protected] *
“The ready availability of generic versions of biotech pharmaceuticals is a key component of any strategy to extend health care to all Americans. These drugs are a growing and especially costly share of state Medicaid budgets, and it is crucial that any federal health reform limit the time for exclusivity to ensure competition and ensure that these life-saving medications are available to doctors and their patients at a reasonable price.”
*Kevin Outterson, Associate Professor of Law, Boston University, (617) 353- 3103, [email protected] *
“Everyone assumes that biosimilar entry will occur when the data exclusivity
period expires, but many aspects of the bill should be improved in order to
make that more likely.
“First, companies should not receive patents and data exclusivity periods unless they have fully described both the molecule and its formulation process (akin the enablement doctrine in patent law). Full disclosure is the quid pro quo in exchange for patents and exclusivity. If “the process is the product,” as the companies often say, then the process must be fully disclosed. Otherwise, biosimilar entry will be very difficult and cost savings will not materialize.
Second, for safety purposes, the companies and the FDA should fully disclose the submission package as early as possible, with the companies protected from free riding by marketing (not data) exclusivity.
Third, data exclusivity periods should not be retroactively applied to existing molecules where the patents are long-expired.
Finally, Hatch-Waxman works in tandem with aggressive state laws on generic substitution, a structure that is missing in the biosimilar arena. A federal law of biosimilar substitution should be included, with appropriate modifications, and it should not pre-empt more aggressive state laws promoting substitution.”
Biotech Bottleneck: Congress can encourage competition within an increasingly important class of prescription drugs
WITH A NAME like the Affordable Health Choices Act, you’d think the health-care reform bill that passed the Senate Health, Education, Labor and Pensions Committee this month would have made an effort to provide affordable health choices. But instead, the bill includes a provision that would create a 12-year market exclusivity period for brand-name biologic drugs. This would drive costs to consumers above even current levels, making the title little more than a mockery.
Biologic drugs, medical therapeutics derived through biotechnology techniques, are an important and ever-expanding field of prescription drug innovation. Forty-five billion dollars of U.S. prescription drug sales last year were biologics, and they comprise approximately 25 percent of new drugs. Prices for a single course of a brand-name biologic can soar into the tens of thousands of dollars, and this is not likely to change soon. Big pharmaceutical companies maintain that a lengthy exclusivity period in addition to the patent protection they already receive is necessary to drive continued innovation. But is it?
A Federal Trade Commission report released last month suggested the opposite — that the biotech industry’s patents on its biologic innovations are so strong that no added exclusivity period is necessary. Biologic drugs require a much more complicated manufacturing process than their chemical equivalents, and, thus, a greater research investment. But the flip side is that many stages of the process can be patented — from the drug products themselves to the genes that produce them to the cells in which they are made. This makes entry into the market by follow-on-biologics, or “biosimilars,” more difficult because multiple patents are harder to design around. Unlike the market for more traditional prescription drugs, in which the entrance of a generic competitor cuts sharply into the profits of a brand-name innovator, the imperfect substitution between biologics means that pioneer biologics retain a large market share even when biosimilar drugs are introduced, allowing innovators a lengthy period in which to recoup their investment.
The Obama administration has favored a seven-year exclusivity period, characterized as a “generous compromise.” Any additional protection would be not only unnecessary but harmful. An extended monopoly would delay the entry of biogenerics and drive costs even higher. Especially considering that the government is a major purchaser of biologics — the top six drugs for Medicare Part B expenditures in 2006 and 2007 were all biologics — this failure to open the market will be costly.
There is still time for action. In the House, a pending amendment would offer a similar 12-year exclusion period, but there is an alternative: a bill put forth by Reps. Henry A. Waxman (D-Calif.) and Nathan Deal (R-Ga.) that would limit the exclusion period to five years. If Congress is serious about health-care reform, it must take another look at whether its legislation truly balances incentives for innovation against the need for price competition.
Congress Should Not Adopt “No Generics” Proposals for Biologics: Evergreening and the Creation of Perpetual Monopolies
The Eshoo-Barton-Inslee and Hatch-Enzi-Hagan Approach to Biogenerics:
Evergreening and the Creation of Perpetual Monopolies
Congress is now considering proposals to establish a process for regulatory approval of generic versions of biotech medicines (“biologics”). Proposals passed by the Senate health committee and sponsored by Representatives Eshoo, Barton and Inslee, however, would establish prolonged delays before permitting price-lowering generic competition.
The HELP (Senate Health, Education, Labor and Pensions Committee) and Eshoo-Barton proposals would establish a 12-year marketing monopoly (known as “data exclusivity”) for brand-name biologics, a monopoly that is separate and distinct from the patent monopoly. During this period, generic competitors would be prohibited from relying on the safety and efficacy tests conducted by brand-name companies, effectively preventing them from coming to market. This excessively long period of monopoly protection (conventional drug makers get only five years) has no correlation with biologics’ manufacturing or research and development (R&D) costs.
Even more worrisome, the HELP and Eshoo-Barton proposals would permit brand-name companies to pursue “evergreening” strategies that would enable them to obtain sequential 12-year marketing monopolies on biologics. The effect would be to prevent price-lowering generic competition for decades and to torpedo the objective of cost containment, which is central to current healthcare reform efforts.
You can read the remainder of the fact sheet in the continuation of this post, or download a copy below.
Click here to dowload the .pdf version of a fact sheet on this topic: BiogenericsEvergreeningJuly2009.pdf
Click here to download a .rtf version of a fact sheet on this topic: BiogenericsEvergreeningJuly2009.rtf
Minor Tweaks to Old Biologics Will Create Perpetual Monopolies
Under the Hatch-Enzi-Hagan proposal adopted by HELP as part of its healthcare reform bill and the Eshoo-Barton proposal they seek to have added to the House version of the bill via amendment, 12 years of data exclusivity are provided to a brand-name (“reference”) product. Enzi-Hatch: New 42 USC 262 (k)(7)(A).
The HELP and Eshoo-Barton proposals then specify that additional periods of exclusivity are not available for modified versions of the original biologic product under certain circumstances. Enzi-Hatch: New 42 USC 262 (k)(7)(C).
Except for these exceptions, however, new 12-year monopoly periods of exclusivity are available for modifications of the original product. With a minor tweak, brand-name companies will be able to gain another dozen years of monopoly protection for their modified product.
Modified products eligible for such repeat monopolies include:
• Combination products (putting together two or more products previously available separately);
• Changes in dosage (such as creating a once-a-day shot where the original product was a thrice-a-day product);
• Changes in delivery mechanism or dosage form (such as a pill or inhalant to replace a shot); and
• Changes to enable the body to absorb a product better.
These modifications of the original biologic product may offer small or significant patient benefits. But they are typically easy to design. Brand-name firms do not need the lure of protracted monopolies to make these minor modifications.
How Minor Tweaks Will Create Perpetual Monopolies: The Case of Prilosec and Nexium
Once the original period of data exclusivity has expired, generics will theoretically be able to enter the market for the older version of the drug. They will be prevented, however, from competing directly with the modified version for another dozen years.
Based on the experience with conventional drugs, there is very strong reason to believe that brand-name companies will be able to exert their marketing acumen to transition patients (and doctors) to the modified product, and away from cheaper, generic versions of the old product. Indeed, it is quite likely that in many or most cases this prospect will deter generic manufacturers from entering the biogenerics market at all.
A classic example of how the evergreening process works involves the acid-reflux drugs Prilosec and Nexium. With its best-selling Prilosec facing generic competition, AstraZeneca introduced Nexium, a slight chemical variant of Prilosec (similar what is often called a “me-too” drug, except in this case produced by
the same company in order to preserve their market share just prior to generic competition instead of
attempting to encroach on the market share of another company). AstraZeneca studies showed the new drug to have the slightest improved performance from Prilosec, not for heartburn, but for “erosive esophagitis,” where burped-up stomach acid injures the esophagus. That slightly improved result enabled the company to launch a full-court press to get consumers to switch from the drug going off patent to the one just coming on. Nexium sells for about 5 times the price of Prilosec. Annual revenues for Nexium, on a global basis, top $5 billion.
Eshoo-Barton and HELP Proposals Will Make it Even Easier to Game the System for Biologics
Under the HELP and Eshoo/Barton approaches, evergreening will be easier and more effective for biologics than it is for conventional drugs.
First, in many or most cases, generic versions of biologics will not be identical with the brand-name product. In these cases, the generic product will be treated as “biosimilar” and not “interchangeable,” and will only be available to a patient upon specific prescription by a doctor. There will thus be a built-in bias in the system against switching to generic products — and make it easier for the brand-name company to direct patients to their modified, monopoly-protected products.
Second, under the Eshoo-Barton approach, the Food and Drug Administration (FDA) will be required to give generic biologics unique names — that is, they will not be able to use the same non-proprietary name as the brand-name product. This will further mitigate against switching to generic products.
Third, conventional drug evergreening involves efforts to obtain new patent protection. Patent protection is much less robust than data exclusivity; this is especially true for patents on modifications to products. Generic firms are commonly able to challenge successfully or work around modification patents. By contrast, while the bar for attaining data exclusivity is lower than obtaining patent protection (which requires a new, useful and non-obvious invention), the data monopoly is absolute: it is granted automatically upon FDA marketing approval and is not subject to workarounds.
The bottom line is this: In many or most cases, the HELP and Eshoo-Barton approaches will offer only the illusion of generic competition. In these instances, brand-name companies will be able to game the system to obtain near perpetual monopolies, extending several decades beyond patent and original exclusivity expiration.
Avoidable problems: Waxman-Deal and Schumer-Brown proposals offer superior approach
The biologic evergreening problem is solvable. The Waxman-Deal and Schumer-Brown-Collins-Martinez-Vitter biogenerics legislation (H.R. 1427/ S.726) establishes clear and precise standards for obtaining data exclusivity, and specifies categorically and by example that minor modifications are not eligible for subsequent full exclusivity periods.
For more information contact:
Sarah Rimmington, Attorney, Essential Action, Access to Medicines Project at (202) 387-8030 or [email protected]
ACTA and the Drug Monopoly Enforcement Agenda: A windfall for big drug companies; higher medicine prices for all
The U.S., E.U., and key trading partners are negotiating an Anti-Counterfeiting Trade Agreement (ACTA). ACTA is one of several major new initiatives seeking, in part, to protect drug monopolies under the guise of fighting counterfeits. Much like a counterfeit, ACTA misrepresents its true ingredients to the public.
In a new fact sheet, Essential Action outlines some key concerns ACTA may pose, focusing on access to medicines. Then we recommend basic principles the United States and other countries should follow if they decide to continue participating in ACTA negotiations.
The concerns outlined in the fact sheet are:
– ACTA will keep medicine prices high
– ACTA threatens the generics industry
– ACTA fails to adequately address public health & safety concerns
– ACTA’s draft text is secret
– ACTA enforces private monopolies at public cost
By Liza Porteus Viana
Intellectual Property Watch
As the United States Congress prepares to recess in early August, there’s hope – and dread, depending on which “side” of the debate you’re on – that legislation creating a regulatory pathway for follow-on biologics may be pushed through as part of the broader healthcare reform package.
The biologics debate centres on how to bring “biosimilars”- as close to generic versions as possible – of complex, living, and expensive biologic drugs to market so cheaper versions are available for consumers. These drugs have the potential to treat debilitating diseases like cancer, Multiple Sclerosis and Alzheimer’s. Brand-name drug companies, which are producing the bulk of these products, spend billions of dollars and many research hours producing biologics, and they want to protect their research and product as long as possible before generic companies can try to replicate the drugs in order to gain as much profit as possible.
But generics companies, consumer groups and others say this is another attempt by the big brand-name pharmaceutical companies to monopolise the market and prevent people from being able to access cheaper medicines. According to the Federal Trade Commission, in 2007, Americans spent $286.5 billion for prescription drugs; $40.3 billion of which was for biologics.
“Sadly, the Congress is seriously considering legislation that would undermine the best chance we have to provide a market-based approach to moderate the cost growth in the most rapidly inflating, highest-cost element of the pharmaceutical industry – biotech drug products,” said Kathleen Jager, president of the Generic Pharmaceutical Association (GPhA).
The Senate Health Committee on 13 July agreed to attach a provision granting 12 years of data exclusivity for brand-name drugs onto the Senate health reform bill. There currently is no pathway to bring biosimilars to the market, like there is for traditional chemical drugs. Hailed as a success by the pharmaceutical industry – the Pharmaceutical Research and Manufacturers of America (PhRMA), for one, has been advocating 14 years – as well as academics institutions, and others, this would prevent generic companies from trying to make lower-cost copycat versions for at least that long.
“It was an important victory, getting the 12 years in the Senate health committee bill. We believe it will be part of the healthcare reform bill headed toward the full committee,” Tom Dilenge, general counsel for the Biotechnology Industry Organization, told Intellectual Property Watch on 24 July.
It is thought that the Senate Finance Committee, which also has some jurisdiction over the healthcare reform bill, will defer to the health committee’s biologics language. But amendments could still be offered on the Senate floor by those wanting a shorter exclusivity period.
“We’re gearing up for that and we’re obviously pulling out all the stops to make sure people understand the importance of future biomedical breakthroughs,” Dilenge said.
On the House of Representatives side, Rep. Anna Eshoo is expected to offer her amendment providing for 12 years exclusivity to the healthcare reform bill currently in the House Energy and Commerce Committee during a forthcoming markup session. That bill has the support of more than 130 cosponsors, as well as the Association of American Universities, National Venture Capital Association (NVCA), BIO, and the AIDS Institute. A recent NVCA study said the 12 years “is a critical fulcrum in the effort to balance cost with the preservation of biotech innovation.”
Dilenge said he’s “cautiously optimistic” Eshoo’s amendment will be approved, saying BIO favours her plan a bit more than the Senate bill, because she offers more favourable language about biosimilar patent litigation. The other “side” also laments how Eshoo’s bill and the Senate bill include more perceived bureaucratic hurdles in the regulatory pathway process than they would like.
The House Commerce Committee’s chairman, Rep. Henry Waxman, a California Democrat, is one of the original cosponsors of the 1984 Hatch-Waxman Act that created a regulatory pathway for chemical drugs, He’s viewed as more an ally of consumers. A bill (HR 1427) sponsored by Waxman, among others, provides for five years of market exclusivity, and a modification of a previously approved product would be entitled to three years. Sen. Chuck Schumer, a New York Democrat, and a group of bipartisan senators introduced a companion bill in that chamber.
Sarah Rimmington, attorney with Essential Action’s Access to Medicines project, admitted the House “looks challenging right now,” but prospects to get a shorter exclusivity period may be better when amendments are brought up on the Senate floor.
Many generic firms, consumer groups, access-to-medicine organisations and others say 12 years is far too long, and they are hoping that even President Obama may be able to help their cause despite significant contributions to his election campaign by the pharmaceutical industry. Obama recently said a seven-year window would be “generous.”
“There’s still hope the president and White House could weigh in. They haven’t weighed in as strongly to date as we want them to but we have heard there’s still an opportunity and they want a chance to do that,” Rimmington said. If the Obama administration is focused on cost containment as a central piece of healthcare reform, “to us, this is a no-brainer,” she added. “They should be trying to eliminate the bureaucratic hurdles.”
The innovator side has also been talking with the White House, trying to explain their perceived need for a longer exclusivity window. The problem is, passing healthcare reform is such a high priority of the president, and talks are being held every day to try to convince insurance industries and other parties to get on board, that biologics is not a make-or-break deal.
Essential Action and other consumer groups will be focused on the near-term with working with senators who could change the playing field in that chamber, and getting more House members to support the Waxman approach. The GPhA, along with 27 generic drug companies, on 22 July sent a letter to Waxman and Reps. Frank Pallone and Nathan Deal, who cosponsored Waxman’s bill, stressing that Eshoo’s bill would prevent the creation of a meaningful biosimilars industry. Essential Action, the National Women’s Health Network, National Legislative Association on Prescription Drug Prices, and other groups sent a similar letter on 20 July, citing increasing healthcare costs.
“While safeguarding market protections and intellectual property rights is critical in the pharmaceutical sector, only a healthcare system that balances the interest of innovation and access to lower-cost medicine will achieve the greatest success,” the GPhA letter states.
Not only are consumer groups up against an industry that has already spent tens of millions of dollars on lobbying this year, but they’re also up against high-profile people pushing Big Pharma’s cause.
Jamie Love of Knowledge Ecology International writing in the Huffington Post accused former Democratic National Committee Howard Dean – a medical doctor – of being a “shill” for the “anti-consumer BIO backed measure” in the health reform bill, citing a recent BioCentury report on lobbying by BIO to thwart more generic competition. Allied groups called Dean’s support for BIO in this area “disgusting” and “repulsive.”
During an event last week, Dean was asked about that accusation, and responded: “I just was part of an effort to make sure that the biotech industry got a patent life that was longer than what some of the people in Congress wanted to do. And I work for a law firm part-time that … got paid for that, so I was a shill for the bio industry. I’m actually not a shill for the bio industry. My long-term belief is that in order to have a healthy, innovative industry, pharmaceutical or biotech industry, you have to allow them to make some money.”
Patent Reform Still in Play
In other major intellectual property news in Washington, despite the Senate being consumed with the Supreme Court nomination of Sonia Sotomayor and healthcare, work on patent reform continues. Industry sources told Intellectual Property Watch that House committee leaders are looking for ways to move the bill through that chamber. It’s not expected they will adopt the Senate Judiciary Committee’s bill as is – particularly when it comes to the damages provision. Movement on the bill is not expected until this autumn.
Until then, discussions also are ongoing in the Senate regarding inter-partes examination and post-grant review. Recent research by Economics Professor Scott Shane of Case Western University, conducted for the Manufacturing Alliance for Patent Policy, shows that if both of those two provisions were included in the bill, wait time for patent decisions would increase by more than 25 percent, and the cost of defending patents could increase by $2.2 billion.
USPTO May Borrow Millions to Cover Patent Shortfall
And the Senate this month passed the House-passed version of a bill (HR 3114) that allows the US Patent and Trademark Office to borrow up to $70 million from trademark fees to avoid furloughs and layoffs in patent operations, and to help reduce the patent backlog. It also allows the USPTO to establish a temporary surcharge on patent fees by September 2011. As of presstime, the bill was awaiting Obama’s signature.
Sarah Rimmington and Robert Weissman
The Roanoke Times
As Congress considers health care reform, many members are suggesting that reform must be tempered in light of the potential expense of expanding coverage.
Why in the world, then, is that same Congress on the verge of adopting an amendment to the health care legislation that will cost consumers and the government tens of billions of dollars? And will Rep. Rick Boucher, who holds a key position on the relevant House committee, vote to support a giveaway worth tens of billions of dollars to Big Pharma and the biotech industry, or will he support common-sense measures to control drug costs and foster marketplace competition?
Big Pharma is today salivating at the prospect of hijacking the health care reform process to enhance its ability to price-gouge the American public.
As the House Energy and Commerce Committee meets to vote on health care legislation, it is expected to consider an amendment from Reps. Anna Eshoo of California, Joe Barton of Texas and Jay Inslee of Washington state — supported by Big Pharma and the biotech industry — to authorize generic competition for biotech drugs. Currently, there is no regulatory process for approval of generic versions of this class of pharmaceuticals, known as “biologics.”
Biologics make up roughly half of the most important new medicines. Important biologics include many or most new cancer drugs, drugs for the treatment of severe arthritis and psoriasis, multiple sclerosis and numerous vaccines.
Biologic drugs are the fastest-growing segment of the pharmaceutical market, and they are priced significantly higher on average than brand-name conventional drugs. For example, the top-selling biologic, Enbrel, Pfizer/Amgen’s arthritis treatment, costs $15,000 to $20,000 per patient per year. Roche/Genentech’s cancer drug Avastin costs approximately $185,000 per year.
These extraordinary prices do not reflect high manufacturing or research and development costs. Shielded from competition, brand-name companies charge so much simply because they can.
Big Pharma and biotech’s argument that it must charge 22 times more, on average, for biologics than for conventional drugs because biologics cost more to develop is untrue. Studies frequently cited by the brand-name industry report the cost of producing brand-name conventional drugs and biologics is almost identical ($1.2 billion versus $1.3 billion).
Unfortunately, rather than creating robust price-lowering competition, the Eshoo-Barton-Inslee approach would establish extended monopoly protections — exceeding the monopolies already conferred by patents — and impose a series of needless bureaucratic hurdles for approval of generics.
The Eshoo-Barton-Inslee proposal is competing with a pro-consumer bipartisan alternative offered by Energy and Commerce Committee Chairman Henry Waxman of California and Rep. Nathan Deal of Georgia. All major consumer groups involved in the issue support the Waxman-Deal approach, which would facilitate expedited price-lowering generic competition.
There are many differences between the Eshoo-Barton-Inslee and Waxman-Deal proposals, but the most important issue relates to “data exclusivity,” a key determinant in the length of monopoly protection for brand-name companies.
Data exclusivity addresses this issue: When a generic company seeks approval for a generic drug, it shows that its product is the same as, or essentially similar to, a brand-name product. It then relies on, but does not repeat, the full battery of clinical tests performed by the brand-name maker.
Data exclusivity prohibits the generic firm from relying on the brand-name test data, effectively barring the generic from the market for a set period of time. It gives the brand-name firm a monopoly on selling that product. This monopoly is separate and distinct from the patent monopolies already attached to these products.
The Obama administration recently indicated that seven years data exclusivity is a “generous compromise” between the zero years recommended in a recent Federal Trade Commission report and the 14 years being sought by Big Pharma and the biotech industry. The 12½-year data exclusivity period in the Eshoo-Barton-Inslee proposal is almost twice the length of time proposed by the White House and more than double the five years included in the Waxman-Deal biogenerics legislation. Traditional drugs receive five or three years data exclusivity under existing law.
Delaying generic competition for more than a decade will cost consumers and the government tens of billions of dollars. Moreover, the other obstacles to generic competition in the Pharma-favored Eshoo-Barton-Inslee proposal might keep generic firms out of the market for biologics altogether, costing additional tens of billions of dollars.
Why, indeed, would Congress consider gifting such a windfall to Big Pharma? Might it have something to do with Pharma’s legion of lobbyists — paid more than $1 million a day?
Whatever the reason, it is not too late for Congress to pull back from the precipice, deny Big Pharma and the biotech industry an unjustified windfall and save consumers and taxpayers tens of billions of dollars. Which side will Boucher be on?
Rimmington is an attorney with Essential Action’s Access to Medicines Project. Weissman is director of Essential Action, a nonpartisan, non-industry-funded public health and corporate accountability group.
By Sarah Rimmington and Robert Weissman
Special to the San Jose (Silicon Valley) Mercury News
As Congress considers health care reform, many members are suggesting that reform must be tempered in light of the potential expense of expanding coverage.
Why then is that same Congress on the verge of adopting an amendment to the health care legislation that will cost consumers and the government tens of billions of dollars? And will Rep. Jerry McNerney, D-Pleasanton, who holds a key position on the crucial House committee, vote to support a giant giveaway to Big Pharma and the biotech industry? Or will he support common-sense measures to control costs and foster competition?
Big Pharma is salivating at the prospect of hijacking health care reform to enhance its ability to price gouge the American public.
As the House Energy and Commerce Committee meets to vote on health care legislation, it is expected to consider an amendment from Reps. Anna Eshoo of Palo Alto, Joe Barton of Texas and Jay Inslee of Washington state — supported by Big Pharma and the biotech industry — to authorize generic competition for biotech drugs. Currently, there is no regulatory process for approval of generic versions of this class of pharmaceuticals, known as biologics.
Biologics make up roughly half of the most important new medicines, including most new cancer drugs, drugs for the treatment of severe arthritis and psoriasis, MS, diabetes, and numerous vaccines.
They are priced significantly higher on average than brand-name conventional drugs. For example, the top-selling biologic Enbrel, Pfizer/Amgen’s arthritis treatment, costs $15,000-20,000 per patient per year. Roche/Genentech’s cancer drug Avastin costs approximately $185,000 per year.
Biotech’s argument that it must charge 22 times more on average for biologics than for conventional drugs because biologics cost more to develop is untrue. Studies frequently cited by the brand-name industry report the cost of producing brand-name conventional drugs is almost identical — $1.2 billion v. $1.3 billion. Brand-name companies charge so much simply because they can.
Rather than creating price-lowering competition, the Eshoo approach would establish extended monopoly protections totaling 12.5 years and exceeding the monopolies already conferred by patents, as well as imposing a series of needless hurdles for approval of generics. The proposal is competing with a pro-consumer bipartisan alternative offered by Energy and Commerce Committee Chair Henry Waxman of Los Angeles and Rep. Nathan Deal of Georgia. All major consumer groups involved in the issue support the Waxman-Deal approach, which would expedite generic competition.
The Obama administration recently indicated that seven years’ data exclusivity is a “generous compromise” between the zero years recommended in a recent Federal Trade Commission report and the 14 years sought by Big Pharma. Traditional chemical drugs receive three or five years’ data exclusivity under existing law.
Delaying generic competition for almost a decade and a half will cost consumers and the government tens of billions of dollars. Moreover, the other obstacles to generic competition in the Pharma-favored proposal might keep generic firms out of the market for biologics altogether.
Why would Congress consider such a windfall? Might it have something to do with Pharma’s legion of lobbyists — paid more than $1 million a day?
It is not too late for Congress to pull back from the precipice, deny the biotech industry an unjustified windfall and save money for consumers and taxpayers.
Sarah Rimmington is an attorney with Essential Action’s Access to Medicines Project and Robert Weissman is the director of Essential Action, a nonpartisan, non-industry-funded public health and corporate accountability group. They wrote this article for the Mercury News.
By GOLDIE BLUMENSTYK
The Chronicle of Higher Education
Two groups that represent tens of thousands of students involved in medical research are taking the Association of American Universities to task for its “unconscionable” endorsement of a proposed federal law that would guarantee drug companies 12 years of exclusivity to sell certain kinds of drugs and vaccines they develop.
The groups say the association’s position on so-called follow-on biologics, or “biosimilars,” puts the universities’ profit motives ahead of the needs of the public.
The measure will “dramatically restrict access to affordable medicines and likely cost consumers and the federal government billions of dollars,” say the American Medical Student Association and Universities Allied for Essential Medicines, in a letter to the AAU. A third organization, a consumer group called Essential Action, also signed onto the letter.
The proposed law is now the focus of intense lobbying here, pro and con, from an array of interest groups, including AARP (which opposes a long period of exclusivity for fear that it will raise medical costs) and the Biotechnology Industry Organization (which favors it, saying it will encourage companies to invest in innovation).
The student groups and other opponents of the measure fear that if the proposed law is added to health-care-reform legislation now moving through the U.S. House of Representatives, it will be hard to stop. The House may take up the bill as early as this week. The 12-years-of-exclusivity measure is already included in the Senate’s version of a health-care-reform bill.
The AAU, which represents more than 60 top research universities, says it supports the measure because commercial drug companies need assurance that it will be worth it to them to invest in the high-risk business of making the new biologic drugs from inventions coming out of university laboratories. The exclusivity provision is designed to let them recover the costs of their investments before copycat versions of the drugs are allowed onto the market.
Dealing With Copycats
“This is a very new field with dramatic possibilities, and we would like to see it work,” said John C. Vaughn, executive vice president of the association. In practice, he added, the exclusivity provided for in the proposed law would not be all that different from what is currently allowed for “small molecule” drugs.
Biologics, which are based on proteins, are more complex in structure and more difficult to make than small-molecule drugs.
Biologics are also harder to protect with patents because drug developers, by tweaking just a few protein strains, can design around the patented idea and create an imitation drug that does the same thing as the original.
Under current federal rules for generic small-molecule drugs, which are literally copies of the first drug, the nonbranded versions can come onto the market within five years of the original, although the existence of a patent on the drug often delays that further. After five years, generic manufacturers can ask the Food and Drug Administration for approval to make a copycat product based on the same safety and efficacy data submitted by the original drug maker.
Because patents won’t be as effective in protecting exclusivity against biosimilars, the pharmaceutical and biotechnology industries asked Congress to establish a longer period of data exclusivity for biologics—they originally sought 14 years, based on reports from some economists—before generic makers could use data provided to the FDA from the creator of the product. In June the Obama administration, which is counting on lower-cost generics as a keystone to health reform, said seven years would be a “generous compromise.”
Ethan Guillén, executive director of the Universities Allied group, said the organizations recognized the need for some period of data exclusivity but believed 12 years was too long. “Universities must take evidence-based stances that benefit society, and not simply act as echo chambers for PhRMA and BIO priorities,” the groups wrote in the letter, referring to the chief lobbyists for pharmaceutical and biotechnology companies.
Mr. Vaughn said that the AAU’s position was based on market assessments it found reliable, and that the association had sought a balanced position that would take into account the market realities of the pharmaceutical industry and the needs of the public.
Although many influential parties are playing a role in the debate, Mr. Guillén said the AAU’s withdrawal of support for 12 years of exclusivity could still be significant, both for its symbolism and because it would “remove a fig leaf” that now gives the pharmaceutical industry and others cover to support that many years to monopolize the market.
His group, which has also been working with the AAU and other academic organizations to direct more university research toward improving human health in the developing world, said the association’s position seems to contradict its stance urging universities to be more focused on public health in their licensing practices.
Universities Allied is a coalition of students at more than 40 research institutions in the United States, Canada, and Europe. The medical-student association represents more than 62,000 members, including medical and premedical students, residents, and practicing physicians.
Today, Essential Action along with the National Women’s Health Network, Community Catalyst, Breast Cancer Action, National Legislative Association on Prescription Drug Prices (NLARx), Knowledge Ecology International (KEI), American Medical Student Association (AMSA) and Universities Allied for Essential Medicines (UAEM) sent a letter to Members of Congress to oppose legislative proposals for the approval of generic biologic drugs that contain excessive periods of data exclusivity or other unnecessary and significant barriers to generic biologic competition.
“Our nation is experiencing massive healthcare costs during an economic crisis,” says the letter. “Increasing the availability of generic biologics will be a critical element of a comprehensive and necessary health care cost containment strategy, and will provide Americans affordable choices in their healthcare. If the wrong legislation passes on this critical issue there will be no generic biologics and patients and a teetering healthcare system will continue to pay the price.”
The letter indicates that the proposal that recently passed the Senate Health Committee, as well as a proposal being floated by Representative Anna Eshoo in the House of Representatives propose excessive amounts of data exclusivity and other unacceptable bureaucratic obstacles to timely, price-lowering generic competition for biologics.
You can read the complete letter in the continuation of this post.
July 20, 2009
Dear Senator or Representative,
Congressional consideration of healthcare reform has two overriding goals: expand health coverage to the uninsured, and contain costs. It is widely understood that the first goal cannot be achieved absent success with the second objective.
It is therefore vital that Congress take steps to lower the price of the most expensive drug treatments, rather than aid Big Pharma and the biotech industry’s ability to price gouge consumers and the government. For this reason, we urge you to support the Promoting Innovation and Life Savings Medicines Act, H.R. 1427 and reject attempts to pass other biologics legislation that will leave affordable care out of reach.
Over the past twenty-five years safe and affordable generic drugs have been an important option for patients. However, there is an entire category of medicines – biologics – that have no generic alternatives because the FDA does not have the authority to approve them. Biologics are among the most expensive and most important drugs available to patients today. They account for 25% of all new drug products approved by FDA and cost on average 22 times more than chemical drugs. Big Pharma and the biotech companies charge so much more for biologics not because they are more expensive to manufacture, or because research & development (R&D) costs are higher, but simply because they can. Presently, there is no competition in this critical marketplace.
The Senate HELP Committee and Congresswoman Eshoo have put forward legislation that would grant unprecedented data exclusivity periods to brand manufacturers, which will ensure there is long delayed or perhaps even no generic competition. Both proposals, though very different in many ways, would guarantee brand monopolies for at least 12 years and give brands the ability to extend this monopoly even further. The Federal Trade Commission (FTC) has closely examined this issue and released a study stating that any amount of exclusivity is not necessary to protect this industry. The Administration also opposes lengthy exclusivity periods.
Our nation is experiencing massive healthcare costs during an economic crisis. Increasing the availability of generic biologics will be a critical element of a comprehensive and necessary health care cost containment strategy, and will provide Americans affordable choices in their healthcare. If the wrong legislation passes on this critical issue there will be no generic biologics and patients and a teetering healthcare system will continue to pay the price.
While it is disappointing, it is not surprising that one of the most powerful lobbies in Washington has spent considerable resources to ensure that they retain the ability to charge the highest prices that the market will bear. Consumers and the healthcare system cannot bear these prices any longer. We urge you to oppose generic biologics legislation that contains excessive periods of exclusivity or other unnecessary and significant barriers to generic biologic competition. Don’t let big industry interests trump sound public policy.
American Medical Student Association (AMSA)
Breast Cancer Action
Knowledge Ecology International (KEI)
National Legislative Association on Prescription Drug Prices (NLARx)
National Women’s Health Network
Universities Allied for Essential Medicines (UAEM)
Sarah Rimmington, Attorney
Essential Action, Access to Medicines Project
(Mobile) (202) 422-2687