The Tennessean (Nashville)
By Sarah Rimmington and Robert Weissman
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 health-care legislation that includes prescription drug proposals that will cost consumers and the government tens of billions of dollars?
And will U.S. Rep. Bart Gordon, D-Murfreesboro, continue 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 market competition?
Earlier this summer, House and Senate committees approved a Big Pharma-backed approach for FDA approval of generic versions of “biologic” drugs. Gordon voted for the Big Pharma- and biotech industry-favored proposal. A more balanced approach supported by all the consumer groups involved in the issue would have facilitated expedited price-lowering generic competition.
Biologics are the fastest-growing segment of the drug market and are priced 22 times higher on average than brand-name conventional drugs. In some cases, prices approach or exceed $100,000 per patient per year. Roche/Genentech’s cancer drug Avastin costs about $185,000 per year.
Unfortunately, rather than creating robust price-lowering competition, the approach now included in the health bills would establish extended protections — exceeding the monopolies already conferred by patents. These might keep generic firms out of the market for biologics altogether, costing U.S. consumers additional tens of billions of dollars.
Seven-year rights enough
There are many problems with the proposal being considered by Congress, but the most important issue relates to “data exclusivity,” a key determinant in the length of monopoly protection for brand-name pharma 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.
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 and gives the brand-name firm a monopoly.
The Obama administration 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.
Current proposals would enable Big Pharma to do relatively inexpensive tweaks to the drugs, and still get an additional 12 years of protection. Brand-name companies justify this by arguing that it is exceptionally difficult and expensive to produce new biologics. But the industry’s most-cited studies show biologic research and development costs to be relatively equivalent to costs for conventional drugs ($1.3 billion vs. $1.2 billion).
Shielded from competition, brand-name companies charge so much simply because they can.
Why would Congress consider gifting such a windfall? Might it have something to do with Big 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, deny Big Pharma and the biotech industry an unjustified windfall, and save consumers and taxpayers tens of billions of dollars. Which side will Rep. Gordon be on?
Sarah Rimmington is an attorney with Essential Action’s Access to Medicines Project. Robert Weissman is director of Essential Action, a nonpartisan, non-industry funded public health and corporate accountability group.