Follow-on Biologics News Briefs - No. 11

    By Donald Zuhn --

Senate Passes Patient Protection and Affordable Care Act

On Christmas Eve, the Senate passed the Patient Protection and Affordable Care Act (H.R. 3590) by a 60-39 vote.  Independent Senators Joe Lieberman (I-CT) and Bernard Sanders (I-VT) joined all 58 Democratic Senators in voting for the bill.  All of the Republican members of the Senate -- with the exception of Senator Jim Bunning (R-KY), who did not vote -- voted against the bill.  The Senate bill, which was officially renamed The Patient Protection and Affordable Care Act, expanded from 2,074 pages as introduced last month to 2,407 pages.  One thing that did not change in the bill, however, was the section (§ 7002) providing for an approval pathway for biosimilar biological products.  As reported on Patent Docs last month (see "Follow-on Biologics News Briefs - No. 10"), this provision would preclude a biosimilar application from being approved "until the date that is 12 years after the date on which the reference product was first licensed."  In addition, the Senate bill would offer an additional 6 months of exclusivity for the use of reference products "in the pediatric population."  On Tuesday, a message regarding the Senate's passage of the bill was sent to the House of Representatives.

Reaction to Senate Health Care Bill

In a statement released on Christmas, Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood declared that the Patient Protection and Affordable Care Act passed by the Senate "includes many provisions which serve as early Christmas presents for patients living with debilitating diseases such as cancer, Multiple Sclerosis, HIV/AIDS and a host of rare diseases."  Referring to the biosimilar provision of the bill, Mr. Greenwood noted that the legislation "establishes, for the first time ever, a pathway to allow for U.S. Food and Drug Administration approval of biosimilars, sometimes inaccurately referred to as 'biogenerics.'"  He added that as a result of this provision, "patients with devastating diseases will have increased access to safe and effective life-saving advanced therapies and can take comfort in the knowledge that this bill will accelerate the biotechnology sector's drive toward discovering new treatments, therapies and cures for diseases that have plagued us for years."  Mr. Greenwood also pledged the industry group's cooperation in working with the Senate to ensure that "the House provisions pertaining to patent resolution are included in the final bill."

One day earlier, Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Ken Johnson issued a statement applauding the Senate "for taking an important and historic step toward expanding high-quality, affordable health care coverage and services to tens of millions of Americans, many of whom are struggling today financially."  While noting that "considerable work remains to be done in reconciling differences between the Senate and House bills," Mr. Johnson stated that the PhRMA was "convinced that comprehensive health care reform, if done in a smart way, will benefit patients, our economy and the future of our nation."

In a statement released on Christmas Eve, Generic Pharmaceutical Association (GPhA) President and CEO Kathleen Jaeger contended "[t]he bill passed by the Senate, unfortunately, amounts to a treasure trove to brand drug companies who stand to make enormous profits from health care reform -- putting brand drug profits over patients."  Perhaps anticipating BIO's reaction to the bill's passage, Ms. Jaeger stated that bill was "no holiday present to American consumers."  She also stated that "[r]eal reform should bend the pharmaceutical cost curve in the right direction," adding that "as it stands, brand drug companies are poised to receive gold nuggets in their stockings, whereas consumers are about to get a handful of coal."

In response to the Senate's passage of H.R. 3590, the Coalition for a Competitive Pharmaceutical Market (CCPM) -- which has 33 participating members including Apotex, Hospira, Momenta Pharmaceuticals, Mylan Labs, Ranbaxy Pharmaceuticals, Teva Pharmaceuticals USA, Watson Pharmaceuticals, and the Generic Pharmaceutical Association (GPhA) -- has begun a campaign on its website to "[s]how Congress that the gift to brand drug companies isn't all it's wrapped up to be."  As part of that campaign, the CCPM is asking visitors to its site to call or write the White House to "[a]sk the President to tell Congress to fix health care reform legislation by putting patients over profits."

Washington Times Op-Ed Says Savings Claims Are Inflated

In an op-ed article appearing in The Washington Times less than a week before the Senate passed the Patient Protection and Affordable Care Act, Roland King, who served as the chief actuary for the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services) for 16 years, notes that "[a] minority of legislators claim that changing [follow-on biologics] legislation to allow biosimilar manufacturers to copy another product as early as 7 years will result in an enormous additional savings to the government" ("Inflated savings claims: Not a prescription for a sound policy").  Mr. King, however, disputes this claim, asserting that "the facts simply do not bear this out."  Noting that "[a] substantial majority of biologic drugs currently on the market are already at or near the end of the proposed 12-year protection period," Mr. King concludes that "lowering the data protection period would result in minimal additional savings."  In addition, he contends that "the 12-year protection period is necessary so the legislation does not irreparably harm the uniquely American biotechnology industry and the future cures it will produce."  Mr. King also believes that the bipartisan support the 12-year period received over the summer in the House Committee on Energy and Commerce (see "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period") and the Senate Health, Education, Labor and Pensions (HELP) Committee (see "Senators Champion 12-Year Data Exclusivity in Senate") another reason for retaining the 12-year data exclusivity period.

Pointing to his "almost 40 years of experience preparing cost estimates for federal health care programs," Mr. King states that "it's a great deal easier to project savings than to actually realize them."  He contends that "the difficulty of the manufacture of biosimilar drugs, the number of likely biosimilar entrants in the market, the number of biologic products near the end of their patent life over the next decade, and the FDA review process that would be required to ensure the safety and effectiveness of biosimilar drugs, all lead to the conclusion that any savings from reducing the years of data protection would be insignificant."  Admonishing opponents of the 12-year period who use cost savings to support their position, Mr. King asserts that this argument is "misleading [and] counter to the public's interest in having biotech companies retain sufficient incentives to continue investing billions of dollars in the research and development of vital new medicines."  Instead, Mr. King concludes that "[m]oving from 12 years of data protection to seven years would not materially impact the savings, but would materially impact the incentives for innovator biotechnology companies to discover the next generation of treatments for such serious diseases as cancer and Parkinson's."

New York Times Reports on Lobbying Efforts Related to Biosimilar Provision of Health Care Legislation

In a report in last month's New York Times, the paper notes that statements by more than a dozen lawmakers added to the official record of the House debate on health care reform "were ghostwritten, in whole or in part, by Washington lobbyists working for Genentech" ("In House, Many Spoke With One Voice: Lobbyists'").  The report also notes that "lobbyists drafted one statement for Democrats and another for Republicans," and that these statements were picked up (at least in part) by 22 Republicans and 20 Democrats.  According to the Times, e-mail messages that the paper obtained showed that the statements were based on information supplied by Genentech employees to lobbyist Matthew Berzok, a lawyer at Ryan, MacKinnon, Vasapoli & Berzok, who authored the statements, which were then distributed by lobbyists at another law firm (Sonnenschein Nath & Rosenthal).  The Times report notes that the Democratic statement "emphasized the bill's potential to create jobs in health care, health information technology and clinical research on new drugs," and that the Republican statement "opposed the bill, but praised a provision that would give the Food and Drug Administration the authority to approve generic versions of expensive biotechnology drugs, along the lines favored by brand-name companies like Genentech."

In an editorial appearing in the Times two days later, the paper opines that "[i]t is disturbing that the [biotech] industry was able to so easily shape the official record to its liking" ("Puppets in Congress").  While acknowledging that "[t]he comforting news is that none of the ghostwritten material sought to change the contents of the bill, which was not open to much revision during the debate," the Times argues that it is "disturbing that so many members of Congress were willing to parrot the industry talking points."  The paper also characterizes the House bill's 12-year data exclusivity provision as "a generous period by anyone's standards."  (Our earlier series regarding the many papers, letters, and statements outlining positions taken by various players in the follow-on biologics data exclusivity debate contradicts the Times' characterization; see "Follow-on Biologics Data Exclusivity Debate Scorecard - Part III".)

Wall Street Journal Op-Ed Warns That Europe May Take Biologic Lead

In an op-ed appearing in The Wall Street Journal last month, a former member of the European Parliament argues that "European researchers are on the cusp of overtaking their American counterparts in biotechnology innovation, especially when it comes to the development of cutting-edge medicines known as 'biologics'" ("Washington's Gift to European Biotech").  According to the author, Della Vedova, a member of the Italian Chamber of Deputies, the European biotech industry has closed the gap in private financing and number of dedicated biotechnology firms over the past five years.  Mr. Vedova notes that "just as the European biotech industry's substantial investments in research and development -- about a third of revenues in recent years -- is beginning to pay off, U.S. policy makers are considering legislation that would hamstring biotech research in their own country."  In particular, Mr. Vedova refers to "[a] bill currently before the U.S. Congress [that] would allow drug companies to make knock-off versions of biologics much sooner than in Europe."

While Mr. Vedova is mistaken as to the actions of Congress since July -- House and Senate committees each passed 12-year data exclusivity provisions that are longer than Europe's 10-year period, and both the House and Senate have now passed health care bills providing for 12 years of exclusivity -- his point regarding the importance of longer exclusivity periods is well taken.  For example, Mr. Vedova contends that "[w]ithout a significant exclusivity period, . . . biotech companies won't have enough time to recoup the huge sums they have invested."  With regard to Europe's 10-year period, Mr. Vedova notes that "[t]he EU adopted this standard in 2003 to increase the competitiveness of the continent's pharmaceutical and biotech firms," adding that "it has paid off, as the recent success of European firms illustrates."  Mr. Vedova concludes that a shorter exclusivity period in the U.S. "would mean more investment dollars, more jobs, and more research facilities on this side of the Atlantic," and would constitute "a historic shift" for U.S. biotech researchers, who have "[f]or much of the past few decades . . . left the Europeans in the dust."