As we initially reported earlier, the GOP had included the Eshoo amendment on biologics, seriously word for word. Here's the initial draft of the GOP House bill starting on page 185, and the Eshoo amendment here for comparison.
Once the GOP realized that they were caught plagiarizing Rep. Eshoo's amendment, they decided to make changes to it, borrowing some language from Rep. Eshoo's other bill regarding pediatric studies, H.R. 1548, which she had co-sponsored with Rep. Barton. If you look at the Rep. Eshoo amendment from the Energy and Commerce Committee, you can see that the exact same language ends on page 207 of the GOP's final bill draft, with language thrown in regarding the Federal Trade Commission, and then the language similiarities pick up between both bills on page 214 of the GOP bill and page 23 of the Eshoo amendment.
There are minor differences between the two bills on the Section D restriction regarding the restriction on biological products containing dangerous ingredients, and slightly different language regarding the patent dispute settlement. The majority of Rep. Eshoo's amendment is still there in the GOP bill, with language regarding pediatric studies thrown in from her other biologics bill, H.R. 1548.
The GOP's health bill is disastrously bad, only covering three million more people, and reduces the deficit by far less than the Democrats' health bill. It seems that they couldn't come up with their own unique language on biologics, but had to riff off Rep. Eshoo's amendment instead, with minor statutory changes made to it, and extended the exclusivity period to 12 years and six months, which was the same in Rep. Eshoo's other bill, H.R. 1548, on the term for data exclusivity.
As Rep. Eshoo had stated in her Huffington Post editorial, the 12-year data exclusivity, was warranted in order for pharmaceutical companies to recoup their investment and to invest in new pharmaceutical developments. Once again, here's her claim below:
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.
However, the AARP debunked Rep. Eshoo's argument above with their study on this issue.
WASHINGTON—A new analysis by AARP’s Public Policy Institute reveals the manufacturers of many top-selling biologic drugs have recouped average research and development costs several times over in the past six years, often within a single year. The report’s finding busts the myth that allowing generic versions of biologic drugs will undermine further development of these breakthrough medicines.
As you can see from the study, the average cost to develop a new biologic drug is about $1.2 billion. For instance, over a five year period from 2003 to 2008, major pharmaceutical companies were able to recoup their investments many times over. On the drug, Enebrel, the cost to develop it was about $1.2 billion, and the total sales over the five year period was about $14.8 billion dollars. Also, much of the early research and development for Avastin was subsidized by U.S. taxpayers, as seen in this report below.
Others like Robert Reich also have pointed out that pharmaceutical companies use taxpayer funds for their research and drug development.
Jerry Flanagan, healthcare policy director with The Foundation for Taxpayer and Consumer Rights (FTCR), a nonprofit consumer watchdog group, said the development of life-saving drugs like Avastin through federal dollars strengthens the case for government regulation of drug prices.
"It’s a basic issue of fairness," Flanagan said. "The federal government involvement in Avastin has been similar to the federal government’s involvement in all prescription drugs, in that taxpayer dollars have been used through the National Institute of Health to fund research and development of pharmaceuticals."
In its analysis of National Institute of Health information, the Foundation discovered that the federal government funded at least 100 clinical trials of Avastin. FTCR filed a request under the Freedom of Information Act for documents containing the exact cost and budget of each trial. The group estimates that about 44 percent of health research in the United States is funded by federal grants.
The federal government funded at least 100 clinical trials of Avastin.
Under a federal intellectual-property-rights law known as the Bayh-Dole Act of 1980, federal agencies have the regulatory authority to enforce reasonable pricing of patented drugs developed with the aid of federal funding. However, Flanagan charged, the law is never enforced due to the political leverage of pharmaceutical companies in Washington.
So the drug companies' claims about spending billions of dollars in research and development doesn't ring true, given that taxpayer funds also go to a portion of that research and development through the National Institutes of Health, like what happened with the drug Taxol:
The NIH discovered Taxol in the 1960s and spent nearly half a billion dollars on research (GAO report # 03-829). The NIH gave Bristol-Myers exclusive rights to market Taxol: the deal was that Bristol-Myers was supposed to charge reasonable prices, given that we taxpayers had funded the drug's development.
In 2001, Bristol Myers reportedly sold Taxol for about $1,700 per month -- though it cost only about $90 to manufacture a month's supply. According to the GAO, we taxpayers spent nearly $700 million on Taxol through the Medicare program from 1993-2002.
The White House supports a seven-year data exclusivity period for biologics, and had sent a letter to Rep. Waxman stating so according to Reuter News:
White House officials, in a letter to Representative Henry Waxman, said seven years "strikes the appropriate balance between innovation and competition by providing for seven years of exclusivity."
"Innovation is driven by appropriate competition, and the administration's policy will spur that competition," said the letter from Office of Management and Budget Director Peter Orszag and Nancy-Ann DeParle, director of the Office of Health Reform.
...
Waxman, in a statement, said the Obama administration "has made clear that the president does not support the lengthy monopoly periods sought by the drug industry and instead wants a bill, as I do, that will bring real competition and will not unduly prolong the monopolies on biotech drugs."
The most recent statements on biologic generic drugs from the White House came on September 17, 2009, in which Secretary Sebelius spoke at the annual conference of the Generic Pharmaceutical Association (GPhA):
Washington, DC, September 17, 2009 – Speaking to attendees at the Generic Pharmaceutical Association’s (GPhA) Annual Policy Conference, Health and Human Services Secretary Kathleen Sebelius strongly stated that the Obama Administration remains committed to pushing for seven years of market exclusivity for novel biologic products in health care reform legislation pending on Capitol Hill. She went on to say that the Administration also rejected exclusivity for evergreening products. The Secretary noted that she believes the President took a strong stance on exclusivity and the Administration will work with Congress as health care reform discussions continue, stating, "You have allies in the President of the United States and the Department."
Secretary Sebelius also emphasized that while it is critical to increase access to biogenerics to save lives and reduce health care costs, this can be done while also preserving innovation in the brand biopharmaceutical sector. This is an important piece of the public health agenda given that the top four biologics alone represent a significant part of overall pharmaceutical expenditures.
....
In addition to stressing the need for a reasonable seven-year period market exclusivity paradigm – which is devoid of evergreening provisions - Secretary Sebelius stated that the arguments for health care reform parallel the arguments for greater use of generic medicines. Generic medicines have successfully proven that it is possible to increase access to quality of care while also lowering costs. The Secretary said that HHS supported proposals "that would bring more generics forward" including those that would reduce the backlog of generic applications at FDA and "help Americans get access quicker."
We support Senator Brown's amendment in the Senate to bring down the data exclusivity period to seven years. It's why we're circulating this petition to Senators Brown, Schumer, Collins, Stabenow, and Vitter (yes, David Vitter) to bring their amendment to the Senate floor so breast cancer patients and those with Crohn's disease can get access to biologic generic drugs sooner. Also, by 2015, nearly half of the drugs on the market will likely be biologics, which is why the AARP is in support of biologic generic drugs as it'd help produce savings for Medicare recipients under the Medicare Part D program.
IF YOU'VE ALREADY SIGNED THE PETITION TO SENATOR BROWN, PLEASE FORWARD THIS PETITION TO YOUR FRIENDS AND FAMILY!
Also, we'd appreciate phone calls to these Senators above to urge them to bring the amendment shortening the data exclusivity period to seven years for biologic drugs to the Senate floor.
- CALL Senator Brown at 202-224-2315
- CALL Senator Schumer at 202-224-6542
- CALL Senator Stabenow at 202-224-4822
- CALL Senator Collins at 202-224-2523
- CALL Senator Vitter at 202-224-4623
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