Opinion: Eshoo Amendment Will Give Too Much Protection To Biotech

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.