In the News

The Huffington Post
By Jane Hamsher

As a three-time breast cancer survivor, I have a strong personal stake in health care reform. So when students from the American Medical Students Association wrote us at PublicOptionPlease.com and told me about their campaign to keep biologic "drugs of the future" available and affordable, I was eager to help.

Incredible developments have been made in recent years with these "high tech" drugs made from living cells, which now represent 25% of all new drugs and 50% of all important drugs approved. But I know from personal experience that they can be prohibitively expensive, even for people like me who are fully insured. Senator Sherrod Brown has been a powerful advocate for making sure that one day they will be available in generic form:

All too often, the pricetag for this type of drug is simply too high for the patient who needs it. For instance, annual treatment for breast cancer with the brandname biologic drug Herceptin costs $48,000. Even if you are lucky enough to have health insurance and you are paying 20 percent copay, that is $9,600 a year. More than 192,000 American women will be diagnosed with breast cancer in 2009. How are they going to afford that kind of drug?

Senator Brown and Congressman Henry Waxman proposed legislation that would make these drugs available in generic form after giving companies a 5 year monopoly to recoup their costs. Sadly, they lost out to legislation offered by Rep. Anna Eshoo in the House and Senator Kay Hagen in the Senate, which was much more generous to pharmaceutical companies at the expense of those who badly need these drugs.

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Daily Kos
by slinkerwink (Noelle Bell)

This diary rebuts the Huffington Post article by Rep. Eshoo, in which she defends her biologics amendment which allows pharmaceutical companies to have 12 years' exclusivity, which would bar generic biologics [or follow-on biologics FOBs] from entering the marketplace.

Biotechnology products cost billions of dollars to develop, test and bring to market, and in order to ensure that competitors aren't immediately allowed to free-ride on the costly safety and efficacy data produced by innovators, some period of 'data exclusivity' is necessary to allow some period of time to recoup the investment in developing the drug. Without such a 'data exclusivity' period, there would be no reason to invest in new biologics. We would see the flow of research funds going to traditional pharmaceuticals, medical devices, semiconductors, green technology or other more promising innovations.

The House and Senate health care bills include a data exclusivity period of 12 years, which is the same amount of time that all drugs enjoy on the market under patent protection, which prevents any competition. I believe the 12-year data exclusivity period preserves the existing incentives for investment in these life-saving products.


She claims that the 12 years' exclusivity for PhRMA is needed because it encourages these pharmaceutical companies to keep investing billions of dollars in these drugs through innovation. However, the Federal Trade Commission has said otherwise about that claim for the need of exclusivity for twelve years, as seen here below:

Pioneer biologic manufacturers nevertheless have suggested that Congress institute a period of 12 to 14 years of branded exclusivity that would begin once a pioneer biologic was approved by the FDA. During this period, the FDA would be prohibited from approving an FOB product that would compete with the pioneer biologic drug. This branded exclusivity would be in addition to, and would run concurrent with, a biologic drug’s existing patent protection. The economic model put forth by pioneer drug manufacturers to justify this period is based on the average time required to recoup the investment to develop and commercialize atypical biologic drug (referred to as the “Nature model”).

Congress has implemented exclusivity provisions in the past to encourage the development of new and innovative drug products when the drug molecule is in the public domain, and therefore not patentable. The Hatch-Waxman Act provides a five-year exclusivity period to incentivize the development of new chemical entities and it provides a three-year exclusivity period for new clinical investigations of small-molecule drugs. In other instances, Congress has implemented an exclusivity period when market-based pricing has not provided sufficient incentive to develop drug products for children or small patient populations. Central to each of these exclusivities is a public policy trade-off: a restriction oncompetition is provided in return for the development of a new drug product or new use of an existing product.

A 12- to 14-year exclusivity period departs sharply from this basic trade-off, because it does not spur the creation of a new biologic drug or indication. The drug has already been incentivized through patent protection and market-based pricing. The potential harm posed by such a period is that firms will direct scarce R&D dollars toward developing low-risk clinical and safety data for drug products with proven mechanisms of action rather than toward new inventions to address unmet medical needs. Thus, a new 12- to 14-year exclusivity period imperils the efficiency benefits of a FOB approval process in the firstplace, and it risks over-investment in well-tilled areas.

Basically what the FTC is saying that the longer timeframe of 12 years' exclusivity for PhRMA actually discourages innovation and investment in new biologics. It allows PhRMA to sit there and recoup their investment on drugs like Herceptin. In the July 14th hearing before the Energy and Commerce Committee, Larry McNeely, the Health Care Advocate for U.S. PIRG, stated the reasons for the opposition to the Eshoo amendment and uses Herceptin as an example of which PhRMA continues to profit off rather handsomely in the five-year period of its exclusivity:

On average it costs $1.2 billion to take a biologic drug to market, and companies like Genentech should be rewarded for that investment. Genentech should profit from bringing a product to market that saves lives. In fact, they have recouped their development costs and much more, earning $5.5 billion from 2003-2008 alone.

But there’s a catch. Herceptin’s patent protections, the legal mechanism that protects intellectual property in most industries, expired in 2005. The available evidence, namely Genentech’s enormous annual profits, suggests that the patents on the drug provided an ample incentive for the important research that Genentech did on this drug.

Yet today, without a pathway for follow-on biologics, Genentech continues to enjoy monopoly pricing power. They have certainly made the most of it, charging $48,000 a year wholesale for the Herceptin treatment. Some reports have indicated that some consumers paying twice that amount or more. But under current law, it’s unlikely that a generic company will introduce a cheaper version of the drug anytime soon, and Genentech recognizes that.

On n November 1, 2009 Essential Action and some of its partners in the AffordableMedsNow.org campaign released a memo responding to a October 30 op-ed by Representative Anna Eshoo which appeared in The Hill and on The Huffington Post.

You can read the memo on progressive blog FireDogLake.com, or in the continuation of this post.

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San Mateo County Times/ Bay Area News Group
The Insider

Consumer groups are still hoping to persuade Congress during this month's health care reform negotiations to make it easier to create generic versions of drugs known as biologics.

Biologic drugs are created through biological, as opposed to chemical, processes — researchers use plant and animal cells to grow new molecules. They are far more complex than most chemically produced drugs and much harder to duplicate. The top-selling biologics include cancer drugs such as Avastin and several drugs used to treat rheumatoid arthritis and anemia.

Rep. Anna Eshoo, D-Palo Alto, authored an amendment, which was added to the House version of the health care reform bill in July, that would grant biotech firms a 12-year period of market exclusivity on biologics, more than twice the 5-year period that other drugs receive. A similar measure is in the works in the Senate.

Critics charge Eshoo with selling out the public on behalf of the biotech industry, a powerful special interest on the Peninsula and a major contributor to Eshoo's campaigns. Eshoo claims she's trying to balance the interests of consumers and biotech companies, which spend billions developing these drugs.

Sarah Rimmington, an attorney for consumer group Essential Action, called Eshoo's amendment an "unjustified price gouge of the American public." She said 12 years of market exclusivity is far too long and called into question the pharmaceutical industry's claim that biologics are far more expensive to produce than other kinds of drugs.

Rimmington also blasted a clause in the amendment that critics claim would allow biotech companies to restart their 12-year window every time they make minor adjustments to their drugs — combining two types of drugs, for instance, or providing them in different doses — a process known as "evergreening."

Consumer groups were recently joined in the biologics fight by student groups, including the American Medical Student Association and Universities Allied for Essential Medicines. In a statement issued by the student groups on Monday, Yale University medical student Sara Crager said that, as a future biomedical researcher, "I want the fruits of my research to be available as widely as possible as soon as possible."

Eshoo's office disputes the notion that biologics are no more expensive to produce than other drugs. The 12-year window is based on the average amount of time a biologic stays on the market before its patent expires, staffers say.

If biotech companies sink billions into biologics research, only to see generic versions, or biosimilars, appear on the market too quickly, they will lose their incentive to do that research, slowing down the development of potentially lifesaving drugs, proponents of the amendment argue.

Pharma Times
By Lynne Taylor

US campaigners yesterday urged Congress to create a “real” regulatory pathway for generic versions of biologic drugs, but researchers warn that it may take until 2011 to implement any such policies.

Current proposals for a regulatory pathway for generic biologics - also known as biosimilars, biogenerics or follow-on biologics - in Senate and House healthcare reform bills will actually block production of most generic biologics, but if these are improved in critical ways they could save $71 billion or more in the first decade alone, say the consumer and medical student groups which are leading the campaign.

The proposals, originating from Representative Anna Eshoo House bill HS 1548 and past bills in the Senate, would provide 12 years’ market exclusivity for biosimilars compared to five years for other drugs. However, the campaigners point out, the Pharmaceutical Research and Manufacturers of America (PhRMA) puts development costs for biologics at $1.2 billion, close to that for conventional drugs at $1.318 billion, and that the Federal Trade Commission (FTC) recommends zero years market or data exclusivity for biologics, given that biosimilars will cost more to bring to market for generic manufacturers than conventional generics, leaving originator companies with 70%-90% of the market.

These proposals will also allow “evergreening,” whereby pharmaceutical companies will be allowed additional 12-year periods of exclusivity for “relatively inexpensive minor tweaks” which, they say, could block price-lowering generic competition indefinitely.

The language in these bills creates biologic drug monopolies, which discourage innovation and raise costs for the US health system, say the campaigners. However, they add that these problems can be addressed by adopted the relevant sections of bills introduced by Representative Henry Waxman (HR 1427) and Senator Charles Schumer (S 726), which would allow five years’ exclusivity and block evergreening.

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The Tennessean (Nashville)
By Sarah Rimmington and Robert Weissman

Other Views

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.

To The Editors:
Re: Our view on generic medications: Drugmakers seek excessive monopolies on ‘biologics’ (USA Today Editorial Board, August 12, 2009)

I couldn’t agree more that healthcare reform proposals currently give Big Pharma and Biotech “excessive” 12-year marketing monopolies for over-priced biologic pharmaceuticals that will allow drugmakers to price gouge American patients for far too long.

Even more worrisome, the plans will enable manufacturers to make relatively cheap and easy tweaks to old biologics and gain an additional 12 years of monopoly protection. This will further delay price-lowering generic competition for biologics like Roche-Genentech’s $185,000 per year blockbuster cancer treatment Avastin. These simple changes include creating a once-a-day pill where the original was a thrice-a-day product, or replacing a shot with an inhalant or pill.

While these tweaks might offer benefits, their cost will often be only a small fraction of what companies spend developing a new product. Pharma does not need the lure of additional monopolies to make minor changes.

The bottom line is that in most cases this approach will offer only the illusion of generic competition and will torpedo the objective of healthcare cost containment. That’s hardly smart. And it’s definitely not fair to American consumers, insurers and taxpayers.

We must demand that Congress and President Obama eliminate this unjustified windfall for Big Pharma.

Sarah Rimmington
Attorney, Essential Action
Washington, DC

Washington Post Editorial

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.
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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).
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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.
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