Drugmakers Threaten To Oppose Health Bill
21 CommentsBy Ed Silverman // January 16th, 2010 // 10:37 am
What a difference a few years can make. Drugmakers want a provision of the healthcare reform legislation, which offers 12 years of exclusivity, to remain intact because it offers market exclusivity by delaying lower-cost competiton. However, the White House and Henry Waxman, who chairs the House Energy & Commerce Committee, are jockeying to lower that to anywhere from seven to 10 years, the Associated Press writes.
And so the industry is threatening to bolt. In an e-mail obtained by the AP, PhRMA told its board members that “we could not support the bill” if the industry is given less than 12 years of competitive protection for the expensive products. “Please activate immediately all of your contacts,” said the e-mail from Billy Tauzin, the group’s president.
The threat comes as the White House and Congress near an agreement on compromise legislation. Pharma has been a key supporter, but drugmakers are under pressure to boost the $80 billion, 10-year contribution they agreed to make to the overhaul last year. The effort to reduce the exclusivity period could be a way for the White House to pressure industry to pay another $10 billion, or make it easier for Obama to show the $80 billion deal with drugmakers will benefit consumers.
Fred Nelson
My guess is the industry at this point has little leverage with The Hill.
The PR from the stunning early deal has been fully capitalized upon by the Dems. All the bad press, fair or not, regarding large price hikes only tars the industry further with regard to public opinion. Good, bad or indifferent, I don’t think The Hill really needs Pharma’s support of HC Reform at this stage of the game. Look for both a reduced exclusivity period and pharma to ante up further on the $80 billion.
Betsy
Fred Nelson and other friends - the pharmaceutical industry has lots and lots of leverage on the Hill. They even have leverage in the White House. The Chief of Staff in the WH, Rahm Emanuel, is the brother of a well known bio-ethicist, Zeke Emanuel, and yet nothing important has been activated in the direction of pharma reform. Nothing important.
Please don’t forget, that with all the bad behavior of Big Pharma, the worst behavior is the lack of interest in finding cures for ANYthing. Finding more and more drugs, copy cat drugs, etc., which people must take daily for the rest of their lives to HELP them with SYMPTOMS keeps Big Pharma’s bottom line going. Finding cures would damage dramatically that bottom line.
Michael Kirsch, M.D.
No industry has received more negative press than the pharmaceutical industry - except, perhaps, for the tobacco companyies. Initially, the offered up $80 billion on the Obama altar to reduce health care costs. Obama agreed, but the House wasn’t satisfied and wanted to squeeze more. Now they want to reduce the period of exclusivity. I’m not an apologist for the industry. I’m a practicing physician who receives nothing from them, except lunch in my office, from time to time. Some folks won’t be satisfied until these companies are all non-profit. http://www.MDWhistleblower.blogspot.com
Fred Nelson
Betsy you seem to be more than a bit bitter regarding the industry. Over the years Pharma has done a tremendous amount of good and produced real value for society.
If what you say is true about the industry that it is purposely not finding cures for anything so they can sell drugs to cure symptoms and keep the bottom line going then you need to look a little more closely at the industry.
Let’s start with Vaccines for things like Polio, Small Pox and Measles. Let’s look at the advent of antibiotics and how much pain and suffering and lives they have saved with real cures for serious infections. In a real sense these drugs are cures and they’ve produced tremendous value for society.
Furthermore the human body is extraordinarily complex. One can block things from happening, one can replace something that’s missing but it’s hard to fix the underlying ailment. Take Diabetes for example. There has been work underway for years to fix damaged or replace Pancreases to solve Diabetes. Tall order don’t you think? Thank god however the industry has developed insulin and other oral anti diabetics. Further the industry continues to work on anti-obesity drugs which would in some sense “cure” the development of diabetes in some people… If the industry is trying to preserve their bottom line from insulin sales… I ask you why they would develop anti-obesity drugs?
You can debate whether or not everything Pharma as done has produced value for society but when you spurt out things that just aren’t true folks will find it hard to even consider your point of view.
Fred Nelson
Betsy you seem to be more than a bit bitter regarding the industry. Over the years Pharma has done a tremendous amount of good and produced real value for society.
If what you say is true about the industry that it is purposely not finding cures for anything so they can sell drugs to cure symptoms and keep the bottom line going then you need to look a little more closely at the industry.
Let’s start with Vaccines for things like Polio, Small Pox and Measles. Let’s look at the advent of antibiotics and how much pain and suffering and lives they have saved with real cures for serious infections. In a real sense these drugs are cures and they’ve produced tremendous value for society.
Furthermore the human body is extraordinarily complex. One can block things from happening, one can replace something that’s missing but it’s hard to fix the underlying ailment. Take Diabetes for example. There has been work underway for years to fix damaged or replace Pancreases to solve Diabetes. Tall order don’t you think? Thank god however the industry has developed insulin and other oral anti diabetics. Further the industry continues to work on anti-obesity drugs which would in some sense “cure” the development of diabetes in some people… If the industry is trying to preserve their bottom line from insulin sales… I ask you why they would develop anti-obesity drugs?
You can debate whether or not everything Pharma as done has produced value for society but when you spurt out things that just aren’t true folks will find it hard to even consider your point of view.
http://pharmahcreform.blogspot.com/
Justice in MI
Since this thread seems already to be wandering, thanks to Michael Kirsch for his recent inclusion of a good piece on med mal on his blog.
Back to the $80B, if it is true that few industries get worse press than pharma (which Jeff Kindler himself acknowledged as being based “on good reasons as well as bad”), public trust would sink even further if they bolted on healthcare reform at this point. Tauzin may have forgotten, for the moment, that he’s not in Congress anymore.
Justice in MI
Erratum. This is the relevant quote from Kindler:
“Now sometimes this criticism is warranted; sometimes it’s not. But when the majority of people don’t trust you, they will find a way to force you to change. So this is where we are. And it’s up to us to earn back the trust that we’ve lost.”
He was not talking solely about pharma, but he was certainly including pharma centrally in the mix.
The most recent Harris poll suggested that only 9% of respondents agree that pharma is usually “honest and trustworthy.” Only car makers, health insurers, managed care, big oil, and big tobacco do worse in the poll.
pharmavet
The Medicare Part D “donut hole” has become so politicized re Pharma funding that I say either fund Part D fully with no hole or just eliminate Part D altogether. I say that as a member of the industry that benefits from Part D, but it is such a political football that it is just too much of a headache. It was much easier when companies could negotiate rebates with the government, albeit behind closed doors.
Wellescent Health
It will be hard for the pharmaceutical industry to make the concept of profit protection look good to the consumers who will be be the ones footing the bill for higher price drugs. The industry could try to negotiate on the duration with the publicized argument being that they need 9 or 10 years in order to cover the costs of development for drugs that fail to make it to market. However, refusing to move at all will likely turn public opinion against them.
Condor
It would seem that Mr. Tauzin thinks he can — on behalf of all concerns pharma — hold on to only the parts of the deal he likes, and ignore those he does not.
My understanding is that PhRMA never received a commitment from the Administration, at least not on this particular topic — the exact length of biologic exclusivity.
Now, it also would seem he’s peeved that his party is no longer in power — and thus may no longer dictate the most pharma-favorable positions into law.
Elections and consequences, Billy — or, in the (more understandable to Tauzin) Cajun: ‘lections & can’t-see-quinces.
If Tauzin continues down this path, I expect the tab on his dougnut-hole deal will puff-up, from $80 billion, to nearly $120 billion, over ten years. “Bust a deal — face the wheel” said Auntie Entity (played flawlessly by Tina Turner) in “Beyond Thunderdome“. . . .
Namaste
gpawelski
Drug makers must drive growth, revenue and profitability by any means. But no company relishes turning over sizeable pieces of profitable business through an act of altruism.
Yeah! Pharma has done a tremendous amount of good and produced real value for society. Like the 200 US medical education and communication companies who ghostwrite articles for Pharma - “just sign here, Doc, we’ve reviewed the data” - for $20,000 to $40,000 per article.
And there’s medical journals which can make $450,000 off one article reprint as Pharma disseminates its messages under their masthead - “look Doc, it says it right here!”
And the prescription for growth lies in a shift toward biotech from chemistry-based drug development. Pharma wants to make that shift by increasing the competitive protection clause. The added incentive for Pharma.
patrons99
Very inciteful, gpawelski. A shift toward biotech from chemistry-based drug development, requires a much lower burder of proof to gain expedited market approvals with the Non-inferiority margin as the choice of control. Pharma need now only show that their new biological is no less acutely toxic than those biologicals already out there, e.g. prevnar-13.
http://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/BloodVaccinesandOtherBiologics/VaccinesandRelatedBiologicalProductsAdvisoryCommittee/UCM190736.pdf
patrons99
Oops! …no MORE acutely toxic… Sorry!
DSM
There’s a lot of misunderstanding in this thread. Let me focus on the 12 year exclusivity: It actually is supposed to help fix a problem in the system.
Patents provide 20 years of protection from filing. Waxman’s previous bill (Hatch-Waxman, 1984) gives up to 14 years of exclusivity from launch of a new drug, recognizing that it takes a lot more time and effort to get to a drug to market than most other industries.
When does the 12 year exclusivity matter? When a drug takes a particularly long time to develop, which often means that it’s very novel… Me-too drugs are much faster to market. So think about what you’re incenting if you’re against the 12 year exclusivity.
gpawelski
The FDA does not allow all potential cancer treatments to reach the market, only those that they approve after a drug company invests an estimated $500 million to take the treatment through clinical trials. Drug companies will only invest this much money in treatments they can patent. The patent allows the pharmaceutical company to control the product, set the price, and make a profit.
JAB
I visited walmart this weekend and found a list of over 400 generic Rx meds that cost $4 per month. I had two Rxs filled with these generic meds (Blood Pressure & Cholesterol). The cost for me was $8 for the 2 Rxs for the full month. These meds use to cost me $70-$100 per month each before generic. I feel rich today!!!! Then I wondered who would invest in R&D for new meds if Gov. takes away the incentive from Pharma? New innovative generics will never be developed? I thought our system seems pretty good. Invest now, get cheap meds after patent? Not bad quid pro quo for society…. Goverment seems short sighted?
Justice in MI
We have all heard the argument that U.S. drug prices are necessary to sustain new drug development, etc. I would like to see any documentation that the _extent_ of ROI has, indeed, fired up R&D.
Not long ago, the guy who has head of Pfizer in Michigan said publicly that this claim was false. Pricing is based on value of the product, not R&D needs.
Robert
Drugmakers will oppose any bill that interferes with their ability to make a profit. That’s how business works. Corporations exist to make profit–that’s all. If the new health bill goes against that, they will fight tooth and nail to shoot it down before it reaches Obama’s desk.
Condor
DSM writes “There’s a lot of misunderstanding in this thread. Let me focus on the 12 year exclusivity: It actually is supposed to help fix a problem in the system. . . .”
Not the least of which is apparently DSM’s own misunderstanding.
Biologics differ from “old-line” chemical compound drugs in a number of ways — not least of which is that patents are far less important, as a barrier to competitor-entry (the manufacture of biologics is rife with trade-secret know-how, i.e., not easily duplicated by competitors — decidedly unlike powder-compound pill-making methods).
The current snit Tauzin is throwing applies only to biologics. It is highly-likely that the only “problem in the system” (to echo DSM’s turn-of-phrase) is that pharma wants more monopoly power ovr biologics — in the form of longer exclusivity.
That is all.
Namaste, one and all.
DSM
Condor, your comment about the differences between biologics and small molecules regarding patents was true five years ago, is still more or less true in America but not in Europe (where bioequivalent products are becoming common soon after patent expiration) and is unlikely to be true anywhere within a few years.
In any case, if trade secrets were that important, then the 12 year exclusivity rule would have no impact whatsoever.
pharmavet
Pfizer and Merck up almost 2.5% today (11AM) on anticipated demise of health care bill based upon expected results in Massachusetts senatorial election.