Healthcare reform isn’t just about the public option and paying for doctor’s visits — it’s also about equal, affordable access to life-saving medications for all Americans. That’s why many Big Pharma watchdogs are so disappointed with a recent amendment slipped into healthcare legislation that proposes extending patent protection on biologic drugs, delaying for years the public’s access to affordable follow-on versions.
What are biologics? They’re the next big wave in medicine — drugs made not from simple chemical formulations, but from biological components. They’re very expensive, and poised for enormous success:
By 2014, the biggest-selling meds will be biologics, according to an analysis from Evaluate Pharma. Taking the place of Pfizer’s gargantuan drug Lipitor will be Roche’s Avastin, a cancer med expected to account for $9.23 billion in 2014 sales. (Even when you factor in the recent trial disappointments.) The next five top sellers, in order, are expected to be Humira (Abbott Labs), Rituxan (Roche), Enbrel (Wyeth/Amgen), Lantus (Sanofi-Aventis), and Herceptin (also Roche).
Evaluate also predicts that half of the top 100 drugs in 2014 will be biotech meds a huge change from last year’s level of 28 percent and 11 percent in 2000.
Because biologics are so complex, the system we all know, where patented brand names enjoy a period of exclusivity, then eventually make way to cheaper generics doesn’t translate perfectly. Biologic generics are called biosimilars, and they are not seen as generic equivalents. They must be submitted for approvals as new drugs and do their own clinical trials, etc.Â
The Eshoo-Barton amendment, named for sponsoring Representatives Anna Eshoo (D – Calif.) and Joe Barton (R – Texas), would give brand-name biologic drugmakers 12 years of market exclusivity. By comparison, President Obama favors seven years, and Rep. Henry Waxman (D – Calif.) feels that the public should have access to “generic†biologics after just five years. By contrast, says Medical News Today, “The Biotechnology Industry Organization maintains that there should be a minimum 14 years of exclusivity to account for a development process that on average takes 10 years and $1.2 billion for a product to reach market.”
5, 7, 12, or 14 years? As you can see, there is a real difference of opinion on this subject. One person who has written extensively on this is author James Love on the Huffington Post. Here he explains why this amendment is harmful:
The Eshoo/Barton amendment, which has the support of many newly pro-PhRMA democrats, will extend the period of monopolies for biologic medicines, when compared to the original Waxman text. The only question is how long. Part of the harm will be the longer period prohibiting generic suppliers from relying upon evidence that medicines are safe and provide therapeutic benefits. Much of the other harm will come from a number of technical changes in the bill that make it much easier for incumbent firms to block entry through technical issues, extended litigation, and ever-greening of protection from small medically unimportant changes in protected medicines.
This is essentially a case of innovation versus access. Drug companies want protection from the risks and costs borne in the creation and testing of new drugs; patient advocates say that Big Pharma (or Big Biotech, if you like) already make large profits and that the public deserves access to affordable biosimilars in a more timely fashion. Entities that support longer periods of exclusivity, such as universities, biotech companies and venture capitalists are fighting to protect inventors’ rights and ensure more thorough clinical trials. On the other side, consumer groups, labor unions, insurers and generic drug manufacturers ‘see shorter exclusivity as the way to deliver safe, affordable and quality drugs to patients and open the marketplace to increased competition, explains Medical News Today.
The latest high-emotion development is blogger Jane Hamsher’s Are You Or Someone You Know Paying $50,000 A Year For Drugs? It paints an ugly picture of what happens to people who cannot affording life-saving biologics. A few days later, Rep. Eshoo responded to this and other online attention with a blog post on The Hill’s Congress Blog titled Setting the record straight on our health care legislation. If you check in with these two articles, you’ll have the latest from both side of the “biologic generics” debate.
Our mission, as always, at eDrugSearch.com is to improve the American public’s access to safe, quality medications at an affordable cost.
For more information:
- Should We Be OK With The PhRMA Deal With White House?
- US House Panel Backs Exclusivity for Biologic Drugs
- Pay or die: Deadly Pharma amendment in HCR going right under radar
Dean Baker, co-director of the Center for Economic and Policy Research, has written an excellent piece for Truthout that explains why a public option for health insurance is so vital to true healthcare reform.
Here are some choice excerpts from Dean’s article, which I’ve organized in a Q&A format:
Why is healthcare so expensive in the United States today?
The basic story is simple. The insurance, pharmaceutical and medical supply industries, along with the hospitals and the American Medical Association, have rigged the deck so that they get rich at the public’s expense. They have structured our health care system so that we pay more than twice as much per person as people in other wealthy countries, even though we get worse care by many measures. The bloat in the health care sector is projected to grow rapidly over the next decade as health care consumes an ever larger share of the economy.
Who benefits from high prices?
The Centers for Medicare and Medicaid Services (CMS) reports that just the increase in health care spending share of the economy over the next decade will cost us $4.3 trillion. That is equal to a health care tax of $57,000 for an average family of four … CMS projects that $1.4 trillion, or $18,500 per family will go to the hospitals. Doctors and the pharmaceutical companies are each expected to score about $550 billion, costing families $7,300. And the insurance industry’s share of GDP is projected to rise by $360 billion, or $4,800 for an average family.
What are some examples of the current system’s inefficiencies?
The government grants the pharmaceutical industry patent monopolies that prevent normal competition in the prescription drug market. Unlike every other country in the world, the United States lets the drug companies use their government-granted monopolies to charge whatever they want. As a result, we pay nearly twice as much for our prescription drugs as people in countries like Canada and Germany.
Similarly, doctors are able to tightly control the supply of both US trained physicians and the number of doctors that can enter the country from abroad. If custodians had the same control over the labor market for janitors, they would all be making $80,000 a year. We pay close to twice as much for our doctors as people in other wealthy countries. The gap is especially wide for highly paid specialists like neurosurgeons and cardiologists.
Of course, the insurance industry is a total mess. They pocket more than 15 cents for every dollar they pay out to providers. By comparison, the administrative costs of Medicare are less than 2 percent of its revenue.
Why don’t private insurers want consumers to have a public option?
If the insurers ever had to compete with a publicly run insurance plan on a level playing field, they would be blown out of the water. We know that private insurers can’t compete because we already had this experiment with the Medicare program. When private insurers had to compete on a level playing field with the traditional government-run plan they were almost driven from the market. That is why they got their friends in Congress to pass Medicare Advantage. This program spreads the wealth around by giving the private insurers a subsidy of more than 11 percent per patient.
As Congress debates health care reform, we should be very clear what is going on. It is easy to devise reforms that will reduce costs without jeopardizing the quality of care. That is not the fight. The fight is over whether Congress will leave in place structures that will siphon an ever-larger amount of money out of taxpayers’ pockets and put this money in the hands of the insurance industry, the hospitals, the drug companies and the doctors.
What will happen if the public option fails?
Unless Congress creates a serious public plan, you can expect to be hit with the largest tax increase in the history of the world — all of it going into the pockets of the health care industry.
If you follow political coverage, you’ve no doubt heard about the AARP lobby. The AARP’s opponents like to paint the organization’s lobby as one of the most powerful back-room forces in Washington. While this charge is open to question, it’s a narrative that many reporters have bought into — lock, stock and barrel.
The most recent example of this narrative in action is this story by Politico’s Chris Frates, in which he says the AARP is “threatening” legislators on healthcare reform and quotes a pharmaceutical industry representative trashing the organization and saying its real motives are financial (even though it is a non-profit organization).
What a bunch of nonsense.
Yes, as lobbies of non-profit organizations representing real people go, the AARP is a powerful one. That’s to the organization’s credit, and thank God for it. Because without the AARP as a buffer to Big Pharma, we would be in big trouble.
The AARP draws its strength from its members — tens of millions of seniors who are concerned about issues like Social Security, Medicare and — yes — prescription drug costs. It fights hard on Capitol Hill to make sure the voices of its members are heard.
That’s why the organization expressed concern to Senate officials last week that Congress is considering giving Big Pharma pricing monopolies of 12-14 years on generic biologics. Generic biologics are drugs such as insulin that are made by living organisms. Big Pharma is trying to slip this windfall provision into broader healthcare reform legislation.
The AARP would like a shorter monopoly window — meaning generic competition, and lower prices for consumers, sooner. The organization’s “threat” was simply to tell the Senate that it might not be able to support reform legislation if Big Pharma is allowed to sneak in such a lengthy window of monopoly profit-taking.
Sounds pretty reasonable to me.
And you know what? I’m pretty sure about 90 percent of the American public would agree — if anyone cared for our opinion on the matter.
And yet, Frates presents this as just another example of the AARP, the supposed 800 pound gorilla, throwing its weight around.
So, who’s the real 800 pound gorilla?
According to public data, the AARP has spent a little more than $4 million on lobbying so far in 2009. Big Pharma, by contrast, spent more than $25 million in the first quarter alone.
Frates even allows a pharmaceutical industry representative to charge the AARP, a non-profit, with having a profit motive for its lobbying efforts.
Nowhere is it mentioned in Frates’ story that pharmaceutical industry lobbying is motivated entirely and unashamedly by profits. Or is that just too obvious to mention?
Chris, I’m afraid you’ve gotten too absorbed in the hand-to-hand combat in Washington to see the difference between the good guys and the bad guys. It’s a common malady among the Washington press corps.
I read an op-ed in the Dallas Morning News last Thursday that really impressed me, giving me hope that true healthcare reform may be just around the corner.
The piece was co-written by Republican Senator John Cornyn of Texas and Democratic Senator Tom Harkin of Iowa. Its purpose was to advocate the proposed Healthy Workforce Act, which the senators introduced last month with the White House’s endorsement.
This bill is a perfect example of the kind of legislation that both parties can get behind. It gives substantial tax credits to businesses that offer a comprehensive wellness program to their employees, encompassing employee gyms, smoking-cessation support, nutrition programs, and other initiatives.
Sounds like a no-brainer to me. Some excerpts from the op-ed (which we’ve re-formatted into bullet points):
- Corporations are spending untold tens of billions on illness, hospitalization, absenteeism and lost productivity. Wouldn’t it make better sense and better profitability to shift a large share of those health care dollars toward wellness and disease prevention?
- Chronic diseases account for more than 75 percent of current U.S. medical expenditures. This includes heart disease, cancer, diabetes, stress and depression many of which are preventable by changes in diet and lifestyle. Yet less than 3 percent of our health care spending goes toward prevention and wellness.
- Today’s negative health trends are having a profound impact on the profits and competitiveness of U.S. businesses. Average employer medical costs increased 72 percent between 2000 and 2006 more than 10 percent a year. Employers are bearing the cost of diet-related chronic disease and obesity through costlier health care plans and higher absenteeism rates.
- Research shows that, on average, it costs four times more to ensure an employee who has diabetes than one who does not. Even worse, productivity losses due to poor employee health are more costly to businesses than medical costs.
- Workplace wellness programs are economical, typically costing $20 to $200 per employee. And they are a good investment, with some programs producing $10 in returns for each dollar invested.
I checked out the bill at WashingtonWatch.com and saw that 93 percent of those voting in their online poll supported it. That would seem to be a good sign.
However, the bill does have its opponents. As the New York Times reports:
Under Mr. Harkin’s proposal, employers could obtain tax credits for programs that offer periodic screenings for health problems and counseling to help employees adopt healthier lifestyles. Programs could focus on tobacco use, obesity, physical fitness, nutrition and depression, he said.
Growing numbers of employers have adopted wellness programs after finding that they can lower health costs and increase the productivity of workers. Financial incentives include gift certificates and premium discounts or surcharges. Critics say that holding people financially responsible for their health behavior is potentially unfair and that employers have no business prying into their employees’ private lives.
Lewis Maltby, president of the National Workrights Institute, a research and advocacy group, said financial rewards and penalties were often a form of lifestyle discrimination. “You are supposed to be paid on the basis of how you do your job, not how often you go to the gym or how many cheeseburgers you eat,” Mr. Maltby said.
Let’s hope that common sense will win out over “cheeseburger-lovers’ rights” in this instance.
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