Snatching Defeat from the Jaws of Victory?

Obama Administration Pushes for Lower Data Exclusivity Period

    By Kevin E. Noonan --

The Obama administration is reported to be pushing for a lower data exclusivity period than the 12-year period contained in both the House and Senate versions of the  health care reform bill.  This latest twist was reported by Steve Usdin in BioCentury on Saturday.  According to the report, the President informed Congressional Democratic leaders of his opposition in a meeting at the White House last week.  Specifically, on Wednesday, Congresswoman Anna Eshoo (D-CA) asked the President whether he supported the 12-year data exclusivity period in the bill.  Characteristically forthright, the President is reported to have replied:  "As a matter of fact, I don't."  The Congresswoman, who succeeded in having the 12-year period added to the final bill over the objections of the Chairman of the House committee, fellow Californian Henry Waxman, is reported to have sharply responded to the news.  She particularly objected to having the "deal" brokered between the Obama Administration and the pharmaceutical industry (wherein the "contribution" of the industry to healthcare reform is capped at $80 billion) be "sacrosanct" while the administration objected to one of the few aspects of the reform measure where there is agreement between the House and Senate versions.  The President's answer was not specific, alluding to "good policy."

The report contains speculation that Congressman Waxman (at left) is trying to get a victory on this issue at the 11th hour (having failed miserably during debate on the bill).  Other speculation includes that this is an issue where the President could assuage some of the criticism from the left that he had conceded too much to the pharmaceutical industry.  Or perhaps the President's stance comes from his inner policy wonk.

Regardless of motivation, the stance has raised a firestorm.  Billy Tauzin (at right), president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA) was motivated to threaten to withdraw "months of unstinting support" for the healthcare reform bill should the President prevail on Speaker Pelosi and Majority Leader Reid to reduce the data exclusivity term.  Mr. Tauzin also was reported to have notified PhRMA's board members that the group "could not support the bill [if the data exclusivity term was reduced]" (emphasis in original).  Congressman Waxman responded with characteristic combativeness, saying that "[t]he brand name drug companies are threatening to block health care reform for millions of Americans unless they receive virtually permanent immunity from generic competition."  Besides being deficient in mathematics ("12 years" can be the same as "permanent" only on Capitol Hill or to a politician trapped in 2-year re-election cycles), Congressman Waxman fails to consider that permanent immunity from generic competition is the status quo.  If he cares as much as he professes, he might consider that getting this health care bill passed should take priority; changes in data exclusivity term, if warranted, can wait for another day.  Congressman Waxman's position was echoed by Teva Pharmaceuticals (or, more precisely, by their lobbyists, Cuneo Gilbert & LaDuca), saying that "[a]ccess to affordable health care must not be held hostage by the pharmaceutical industry in this way."

Perhaps the President should consider the likely, and threatened, consequences of his position.  For example, the Massachusetts Biotechnology Council (MassBio) is threatening to "attempt to derail Democrat Martha Coakley's bid to replace Edward Kennedy in the U.S. Senate" unless the Administration provided reassurances that the final version of the bill contains the 12-year data exclusivity period.  The article in BioCentury puts the number of biotech industry workers in Massachusetts at about 45,000, certainly enough to influence the election.  This position would be a reversal; recently, BIO President and CEO, Jim Greenwood, attended a fundraising dinner for Ms. Coakley, and Robert Coughlin, MassBio's president and CEO, was reported to have warned both Speaker Pelosi and Majority Leader Reid that MassBio would actively oppose Ms. Coakley's election if the data exclusivity term was lowered from the present 12 years.  Failing to hold the Massachusetts Senate seat for the Democrats would wreck havoc on the legislative calculations for getting a health care bill passed.

The report notes that a compromise is possible, specifically a term of 10 years.  Earlier in the process, investors in the biotechnology sector and biotech company executives are said to have privately conceded that a 10-year term would be acceptable, similar to the term in Europe.  However, that was then, and it is possible (if not likely) that expectations have been raised sufficiently for a 10-year term to no longer be possible.

The report notes, ironically, that there are other provisions in the bill, such as ones involving how the Food and Drug Administration will review applications for biosimilar drugs (for example, involving formal rulemaking) that would delay institution of a biosimilar approval pathway for "a minimum of two to three years" after the legislation is enacted (if ever).

While this may simply be a case of "politics as usual," it seems to be as inept as it is unnecessary.  After all the time and effort (as well as political capital) this administration and Congress have expended in trying to pass health care reform, it would be worse than a shame if the petty politics of political preference and prerogative were to prevent its passage.

For information regarding this and other related topics, please see:

• "Follow-on Biologics News Briefs - No. 11," December 30, 2009
• "Follow-on Biologics News Briefs - No. 10," November 30, 2009
• "House Health Care Bill Includes Biosimilar Licensure Pathway," November 3, 2009
• "12 Senators Write in Support of 12-Year Data Exclusivity Period," November 3, 2009
• "Four Senators Write in Support of 12-Year Data Exclusivity Period," October 19, 2009
• "Governors Send Letter to Congressional Leaders in Support of 12-Year Data Exclusivity Period," October 2, 2009
• "Follow-on Biologics News Briefs - No. 8," August 19, 2009
• "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period," July 31, 2009
• "Follow-on Biologics News Briefs - No. 5," July 19, 2009
• "House Subcommittee Holds Hearing on Follow-on Biologics," July 14, 2009
• "Senators Champion 12-Year Data Exclusivity in Senate," July 14, 2009
• "Senator Kennedy Weighs in on Biosimilar Data Exclusivity Period," July 9, 2009
• "White House Recommends 7-Year Data Exclusivity Period for Follow-on Biologics," June 26, 2009
• "No One Seems Happy with Follow-on Biologics According to the FTC," June 14, 2009
• "Third Follow-on Biologics Bill Introduced in 111th Congress," April 1, 2009
• "Second Follow-on Biologics Bill Is Introduced in House," March 18, 2009
• "Waxman Introduces Follow-on Biologics Bill," March 11, 2009
• "Congressman Waxman Tells GPhA Meeting that Hatch-Waxman Model Will Work for Follow-on Biologics," February 25, 2009

Comments

[loosywill]

Voice your support for new Obama Health care plan at http://www.obamahealthcareplan.org

[loosywill]

Join the conversation about the Obama Health care plan at http://www.obamahealthcareplan.org

[Prudence]

It's a lousy bill ! The real shame is if it passes. America can do better than this. It's NOT ABOUT DEMS., POLITICAL CAPITAL, etc.; it's about appropriate healthcare! Missing the point completely seems to be the objective of all this healthcare hoopla

[EG]

Kevin,

Having seen with wry amusement (and outrage) the "Louisiana Purchase" and "Cornhusker Deal" in this health care legislation, nothing surprises me anymore, including this latest effort to reduce the data exclusivity period for biosimilars. What is astounding is the political stupidity of the Democrat party in Congress and the White House that continues to push for unpopular legislation, yet is willing to commit "legislative suicide" over an issue as minor (at least to the general public) as the length of data exclusivity for biosimilars. As you suggest, Waxman and Obama would do better to get in the current biosimilar proposal and then work later on what the the length of data exclusivity should be. This "all or nothing approach" is simply arrogance, and is an attitude that is going to have consequences for the Democratic party this fall and beyond.

[max hensley]

Very amusing. The hip biotechers sign on for the cruise but find their idol bumping them to steerage. A classic DC rope-a-dope trick and true Chicago-style politics. Pharma has participated in this grotesque corruption and they deserve what they (don't) get. And as far as Eshoo is concerned, too bad she didn't know the old rule about not to publicly asking a question you don't already know the answer to. She made the mistake the whole country has: We all assumed Obama was on our side.