US Biologics Debate Heats Up As Congress, Obama, Wrangle With Healthcare Reform27/07/2009 by Liza Porteus Viana for Intellectual Property Watch Leave a CommentShare this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)Much of our best content is available only to IP Watch subscribers. We are a non-profit independent news service, and subscribing to our service helps support our goals of bringing more transparency to global IP and innovation policies. To access all of our content, please subscribe now.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.”[Editor’s Note: Eshoo’s amendment passed the committee on 31 July.]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 PlayIn 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 ShortfallAnd 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.Share this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)RelatedLiza Porteus Viana may be reached at email@example.com."US Biologics Debate Heats Up As Congress, Obama, Wrangle With Healthcare Reform" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.