Anna Eshoo Biosimilars (HR1548) bill has bad provisions on data exclusivity

Congress should reject the 12-14.5 year monopoly for biologic products provided for in HR 1548

KEI* opposes H.R.1548, the bill to “establish a pathway for the licensure of biosimilar biological products,” on the grounds that the period of the monopoly is excessive, and not subject to safeguards that would protect consumers.

HR 1548 conditions market entry for biosimilar products on a 12 to 14.5 year period of legal monopoly for products that is independent of the patent status of products. The putative rationale is to reward investments in new products. However, there is no requirement that the monopoly bear any relationship to the investments in particular products, pricing, or the cumulative revenues generated by the product. The period of exclusivity can extend 9 years beyond that currently exists for pharmaceutical drugs, and presents considerable risks to the public as consumers, taxpayers, employers and subjects of medical experimentation.

The alternative approach supported by Representative Waxman and the White House of providing a 5 to 7 year monopoly is also excessive, but certainly preferred to an approach that provides a 14.5 year monopoly.

KEI agrees with Essential Action and others that believe a bill based upon exclusive rights to rely upon safety and efficacy of products is itself fundamentally flawed, for several reasons, including the fact that it provides economic incentives for unnecessary and unethical clinical testing of products on human subjects. KEI encourages members of Congress to reflect on the provisions of the Declaration of Helsinki on the ethical principles for medical research involving human subjects, including but not limited to Articles 20 and 21, and to consider if other approaches are more appropriate, including those that allow biosimilars to enter into agreements to share the risk adjusted costs of clinical trials./1/

In any case, the grant of a monopoly should not be without limits or safeguards to protect consumers and taxpayers. Any bill that grants a legal monopoly from competition should also include provisions that allow the monopoly to be eliminated if products are priced excessively, or if other factors merit a review of the monopoly status. The bill should also require that companies disclose actual R&D costs, prices and revenues for products, and that that the federal government should have the opportunity to review the provision periodically to determine if the term of the monopoly is excessive, or if there is a need for additional safeguards to protect the public, or if new approaches, such as cost sharing, are more appropriate in the context of a policy to advance health interests.

Knowledge Ecology International
FMI: Judit Rius judit.rius@keionline.org [17] (1.202.332.2670)
James Love james.love@keionline.org [18] (1.202.361.3040)

*Knowledge Ecology International (KEI) is a non-profit organization that focuses on issues about innovation and access to knowledge goods, including new medical inventions.

/1/. See: Judit Rius Sanjuan- James Love – Robert Weissman, PROTECTION OF PHARMACEUTICAL TEST DATA: A POLICY PROPOSAL, 21 November 2006

Howard Dean -- for hire

Salon has an article today with this title: The seduction of Howard Dean [19], by Justin Elliot.

The Salon article details several of Howard Dean's advocacy efforts, for clients of the lobbying firm McKenna Long & Aldridge. Mentioned in the Salon article is Dean's work for drug companies, on issues such as the fight over the number of years of regulatory test data protection for biologic drugs (Dean wanted 16 years), as well as other apparently well heeled clients, such as Mujahedin-e Khalq (MEK), which Salon described as "an obscure and controversial Iranian militant group that is aggressively lobbying the Obama administration to remove it from the official list of terrorist organizations," and a group lobbying to liberalize the rules for foreign trained doctors to practice medicine in New York.

There have been several comments about the article on the Salon web site. These are a few.

I posted a letter on Dean's comments to the Gerson Lehrman Group [20]

If you want some data points on Dean, look at this from Pharma Exec. On the issue on generics, Dean takes positions that seem to be the opposite of those he backed as a Governor. You tell me what changed his mind.

http://blog.pharmexec.com/2011/04/06/governor-howard-dean-financing-the-future-of-us-drug-innovation/ [21]

Perhaps due to his new role as an adviser toMcKenna’s biotech clients, Dean professed some views that are anathema to his own party caucus. These included support for the 12-year period of data exclusivity agreed by the Administration, PhRMA and BIO to advance the registration of follow-on biologics. Dean predicted that despite some backtracking from congressional Democrats to push the protection period down to seven years, the pledge will be kept – at 12 years. Next, while noting the financial impact of malpractice on providers has been overstated, Dean said he parts with his caucus by supporting tort reform, the centerpiece of which should be allowance for arbitration panels as an alternative to the constitutional right of victims to trial.

Finally, Dean pushed for actions to raise the “certainty index” for investors in big pharma and biotech. This includes mediating more directly between the FDA and Congress, the agency’s most hostile stakeholder. “Pressures from Congress against the FDA have created an overly politicized decision-making chain on the licensing of new therapies, to the detriment of the industry’s long-term future in the US,“ Dean said. Other actions he suggested industry pursue focused squarely on educating around the following issues: that medicines actually save money, when assessed in comparison to most other health interventions; explaining how the average price tag of financing a clinical trial has doubled over the past five years; drug companies, not academia or the NIH, do the heavy lifting in bringing new treatments to market; that manufacturing the next generation of large biologics is complex, risky and expensive; and why tax incentives in the US emphasize less productive short-term objectives rather than the long-term payout responsive to biotech’s development cycle of more than a decade. That education should begin with Congress, which is “increasingly anti-science and ignorant about what is needed to seed drug innovation.”

A defense of Howard Dean was later offered by Karen Finney, a former DNC Communications Director, and a self described "Friend and Adviser to Howard Dean." What Justin Didn't Tell You About Howard Dean [22]. The Finney comment focused on several issues. On the biologics debate, she said this:

On the issue of biologics, one that he’s known and had an opinion on long before he was DNC Chairman. For example, Justin did not mention Gov. Dean spent most of his time during the healthcare debate working with DFA and other grassroots organizations advocating for the public option as one of the most outspoken advocates. During that debate he was very transparent about his position on and support for biologics legislation sponsored by Reps. Anna Eshoo (D-Calif.), Jay Inslee (D-Wash.) and Joe Barton (R-Texas) in the House (H.R. 1548) and in The Biologics Price Competition and Innovation Act introduced by Sens. Edward Kennedy (D-Mass.) and Mike Enzi (R-Wyo.).

Here’s the rest of what he said at the time about a commonsense and fair approach:

“A commonsense and fair approach, similar to the process and timeline currently in place for generic versions of chemical-based medicines, would allow the original developer of the biologic to protect the proprietary data used to develop the medicine for at least 12 years. A shorter exclusivity period would prematurely rob biotech innovators of their intellectual property and destroy incentives to develop new cures. Most firms would be unable to recoup their investments in new medicines, which ordinarily top $1 billion and involve 15 years of research and development. If we discourage investment, we jeopardize the development of the next generation of breakthrough medicines and cures. “

This motivated me to post a comment on Karen Finney's defense [23]

Karen Finney, a former DNC Communications Director and a "Friend and Adviser to Howard Dean," defends Dean for lobbying for the 12 year monopoly on test data for biologic drugs (he actually advocated for longer periods, but BIO only got 12). The period of exclusivity for pharmaceutical drug test data is 5 years, and in general, there is little or no practical difference in R&D costs between the two. Ms Finney suggests this was an old position by Dean, before he was paid to have it. If that is true, I would like to some evidence. We have never found anything from Dean on test data exclusivity periods before he was hired by BIO, but you can find him railing against longer patent exclusivity periods. For example, there is this from a 2002 Forbes Article:

http://www.forbes.com/forbes/2002/0513/199_print.html [24]

"It's unconscionable how they're exploiting patent-extension loopholes," says Vermont Governor Howard Dean. He is a founder of Business for Affordable Medicine, an unlikely coalition of ten states, three labor unions and ten companies (such as General Motors, Wal-Mart and Motorola) now lobbying for Congress to outlaw some of the tactics used to stretch out drug patents.

Later there was this comment, signed Sarah_2012 -- the user name for Sarah Rimmington, a lawyer who formerly worked for Essential Action in opposition to the BIO proposal on test data exclusivity. Rimmington's comment was: Fair criticism of Dean [25]

I followed health care reform closely, and was incredibly disappointed by Howard Dean's lobbying activities on behalf of the biopharmaceutical industry. It was an incredibly cynical move, and very under-reported in the mainstream media. I appreciate Justin Elliot's work in raising the issue.

This was no small issue - Dean was advocating that price lowering generic competition for an incredibly expensive class of important drugs (most new cancer treatments fall in this category for example) be delayed more than twice the amount of time regular drugs receive. And we all know how expensive regular medicines are and how the pharma industry is price-gouging sick people.

These drugs cost tens of thousands of dollars a year and are a lynchpin of Big Pharma's big profits. They didn't need additional monopoly, but they got it. And Dean helped them get it. He is not the liberal many of us thought he was. Disappointing.

—Sarah_2012

On September 2, 2011, Justin Elliott published a follow-up article on Salon, focusing mostly on Karen Finney's defense.

Howard Dean responds to Salon: And we respond to his spokeswoman's dismissal of our story about Dean's paid advocacy work [26]

Howard Dean as a shill for BIO, on Biosimilars bill

The July 20, 2009 issue of BioCentury has an extensive report [27] on the “Biosimilar fire Drill.” It discusses in detail the lobbying by the Biotechnology Industry Association (BIO, bio.org [28]) to defeat efforts by President Obama, OMB, the FTC, Representative Waxman, Senator Brown, AARP, Public Citizen, PIRG, Consumers Union, KEI, Essential Action, and others, to reform the regulation to biologic medicines, so there is more generic competition. (For an earlier discussions of the bill, go here [13] or here [29]).

What is unusual and surprising is the key role of Howard Dean to back an anti-consumer BIO backed measure in the health reform bill.

“Biosimilar fire drill,” Steve Usdin, BioCentury, July 20, 2009.

[snip]

… In bending political opinion about biosimilars, BIO benefited from the services of prominent Democrats, most notably former Democratic National Committee chair and former Vermont Gov. Howard Dean, and perennial Democratic presidential campaign manager Joe Trippi, as well as well-placed lobbying firms.

Dean, who represents the progressive, or more liberal, wing of the Democratic Party, surprised many on the political left by writing a commentary on biosimilars that was published in the July 8 issue of The Hill, a newspaper that is widely read on “Big drug companies Capitol Hill.

Dean repeated BIO’s talking points on biosimilars, contending that a “commonsense and fair approach, similar to the process and timeline currently in place for generic versions of chemical-based medicines, would allow the original developer of the biologic to protect the proprietary data used to develop the medicine for at least 12 years.”

Dean, who attacked pharmaceutical company profits during his 2004 presidential campaign, wrote in the commentary [30] that a “shorter exclusivity period would prematurely rob biotech innovators of their intellectual property and destroy incentives to develop new cures.”

The Hill identified Dean as a physician, “former Vermont governor, Democratic National Committee chairman and presidential candidate,” but did not mention any relationship with BIO.

Meanwhile, Trippi weighed in with a July commentary on the Huffington Post [31] website, the Democrats’ version of the conservative Drudge Report.

Trippi, who was Dean’s presidential campaign manager, wrote that “I hope members of Congress will take the approach Howard Dean advocates. Howard believes that biotechnology innovators need at least 12 years to make treatments affordable and accessible and make sure the drive for better treatments and new cures continues.”

Trippi said he had contacted his members of Congress to endorse 12 years of exclusivity for pioneer biologics, and urged his readers to do the same.

Trippi’s posting prompted a July 16 response on Huffington Post from Jamie Love, [29] director of Knowledge Ecology International, a non-profit organization that advocates the reduction or elimination of IP protections for pharmaceuticals. Love called a House proposal for 12 years of exclusivity for all biologics “evil,” and noted Dean’s and Trippi’s advocacy of BIO’s positions.

Trippi subsequently announced on his blog that biotech represents “the only chance we have for a cure” to many diseases, including the Type I diabetes he suffers from. “ That’s why I passionately support biotech and those who are working everyday for better treatments and cures and why I work on behalf of the Biotechnology Industry Organization,” he wrote.

Trippi and Dean are not registered as lobbyists. Their activity, which supplemented the efforts of BIO’s in-house and external lobbyists, may not have met the legal criteria for requiring registration, but it was aimed at influencing the views and votes of members of Congress.

BIO reported $1.9 million in lobbying expenditures in the first quarter of 2009. Lobbyists who reported working specifically on biosimilars include two with deep ties to influential Democrats: Charles Brain of Capitol Hill Strategies LLC, who served as director of White House legislative affairs for President Clinton, and Paul Kim, a partner at Foley Hoag LLP who worked for Sen. Kennedy as deputy staff director for health policy and as counsel to Rep. Henry Waxman (D-Calif.).

In his e-mail to board members, (BIO President & CEO) Greenwood did not fail to include Dean in his praise. “Our team at BIO, the D.C. offices of our members, our consultants (now including former Vermont Governor and Democratic National Committee Chairman Howard Dean) did a magnificent job,” he wrote.

Dean signed on as “an independent consultant exclusive to the government affairs practice at McKenna Long & Aldridge LLP” in March 2009, according to the law firm. BIO’s Joseph told BioCentury McKenna has a contract to provide “general strategic consulting, messaging advice, and communications strategy” for the trade association.

Dean told BioCentury last week that he provides “long-term and short-term strategic advice to BIO. I do not lobby.” He became involved in the biosimilars campaign because “what happened last week was a crisis for the biotech industry.” Dean declined to discuss specific activities he undertook on biosimilars. According to Greenwood, Dean’s activities included “talking to some members [of Congress] about biosimilars.”

BIO’s top advocacy issue is ensuring that an FDA biosimilars approval process protects biotech innovation, Greenwood told BioCentury. “This issue has been my number one priority since I arrived here three and a half years ago,” he said. “This will form the statutory basis on which the whole enterprise of investing in and developing biologics will be based.”

“Governor Dean was very helpful to us” as BIO scrambled to respond to the Kennedy amendment, he told BioCentury. “As a physician clearly focused on healthcare, a Democrat leader and clearly to left of center, his efforts were impactful.”

“Dean has been a great addition to our team,” Stephen Sherwin, chair of BIO’s executive committee and health section, told BioCentury.

[snip]

Howard Dean: “I’m actually not a shill for the bio industry”

The Center for American Progress hosted a video conference of Dr. Howard Dean talking about Health Care reform on Tueday. The video is on the web here [32]. On this one hour program, Howard Dean spends a little over 3 minutes responding to allegations that he is a “shill” for BIO, on the issue of biosimilars.

For background see the following links:
http://www.keionline.org/blogs/2009/07/16/reject-hr1548/ [13]
http://www.huffingtonpost.com/james-love/key-democrats-back-bio-in_b_235877.html [29]
http://www.huffingtonpost.com/james-love/joe-trippi-admits-he-work_b_238289.html [6]
http://www.keionline.org/blogs/2009/07/20/howard-dean-as-a-shill-for-bio-on-biosimilars-bill/ [4]
http://www.huffingtonpost.com/james-love/howard-dean—-now-a-shil_b_241465.html [5]

Meredith Filak has prepared this transcript of Dr. Howard Dean’s comments at the CAP event [32], which run from 25.10 to 28:25. Doctor Dean clearly knowss the BIO/PhRMA talking points down pat, but he seems fairly uninformed about the bill itself, which is not about patent protection (Patents already provide exclusive rights for 20 years. Dean is arguing for a form of market exclusivity is broader than and independent of patent protection). My first impression is that Dean is saying, “trust me, I’m Howard Dean,” and then “Trust me, I’m a doctor.”

Host: Now we just have a few more minutes before I open up the questions to the audience, and I was just reading the other day an article in the Huffington Post. They, um, they call you a “shill for the biotech industry.” Any comments on that?

Dean: Yeah, absolutely. I’m definitely a shill for the biotech. [laughter] No, I, 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, 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.

I don’t think there’s anything wrong with making money. I just think that there’s wrong—there’s something wrong with making money at other people’s expenses. So, the argument that—this is a very complicated argument, and the article’s a very short article—their insinuation was that since I work for a law firm that represents a biotech group, that I had sold my soul.

My, actually, soul was with this issue in a long time. There has to be intellectual property protection. And if there isn’t, innovation stops. The reason that there’s not much innovation in Europe is because—well, because they can’t recoup their investment, not because of patent protection, but because of regulation on prices. And some reasonable pricing regulation, and some legislation to make sure generics can come in and cut the price at some point is a very good thing, because we want that, that lower price, and we want these drugs to be available at a cheap price. But there is an argument about where the break-even point is.

Biotech is the industry of the future, it pays three times as much in wages to people as the average industry does, and it’s our cutting-edge industry. If we lose that to other countries because we don’t have adequate patent protection, then we’ve lost a huge segment of the American economy and all the innovation. So my argument was—I took sides in the issue, and there were some lawmakers including—most of these companies, incidentally, are run by Democrats, ’cause they’re very smart people and they’re scientists, and you know, and the rest of it, I won’t finish the sentence. [laughter] So the argument was, “how long should their patents last?” And I thought they should last longer, in keeping with more with what the Bio industry thought, and other people thought they should last shorter. My argument is, there’s some number that’s the right number—I don’t know, I’ve argued for, actually I’d argued for 14 years, the industry said 12, and the folks in—one congresspeople said, some congresspeople said, zero. You–explain to me, why you wouldn’t—first of all, only one out of 5,000 drugs, compounds they invent, from—they don’t invent them, they take them from living things, proteins and soforth—only one out of 5,000 compounds gets to the market. So why would you put any money into something if you had no protection? Somebody could come in and copy your invention as soon as it was proved that it worked.

So, look, I think there’s a lot of legitimate debate about what the right number is, and I’m not sure that I have it, but I know a lot about this, and I’ve been doing this for twenty years, and as a physician I chose to side with the Bio industry. I don’t think that makes me a shill, but it does make me stand up for a position that’s not always popular with some other senators in the debate. And there’s room for debate on these things—probably more Republicans agree with me on this issue than Democrats. That’s gonna happen sometimes.

KEI statement on adoption of Eshoo/Barton amendment

In a roll call vote, the Eshoo/Barton amendment passed by a vote of 47 to 11. A number of consumer groups are issuing statements. This is the KEI statement on the vote.

James Love, Director Knowledge Ecology International (KEI),
(+1) (202) 361-3040, james.love@keionline.org [18]

“Health Care reform is both about extending coverage to everyone, and being smarter about how we spend money. A 12.5 year or more monopoly for biologic medicines, without any safeguards to protect consumers and taxpayers is hardly smart. Congress could have embraced a shorter monopoly, or provided protections against excessive pricing. The Eshoo/Barton amendment also make it easier for companies extend the monopoly, through small changes in the products, and by creating areas where litigtation over nuances in the incumbent friendly rules will block generics. The negotiations over biogenerics is an example of how the US Congress can be controlled by big money, on a topic that concerns everyone as consumers, employers and taxpayers. We can’t have a sustainable system for access health care without paying attention to costs.”

Recap on the House vote on Biosimilars

The rollcall for the biosimilars vote in on the Internet here [33]. Based upon the count released by the committee, voting for the Eshoo Amendment were 26 Democrats and 21 Republicans. Voting against were 1 republican (Deal) and 10 Democrats. One Republican did not vote. I have bolded the Nay votes.

To put this vote into perspective, 10 Democrats voted with the widely respected chairman of the full committee, who was responsible in 1984 for creating the modern regime for generic drugs. 26 Democrats voted against Henry Waxman (and virtually all consumer and patient groups that were not on the industry payroll). PhRMA, BIO and big pharma companies were spending an astonishing amount of money — through campaign contributions, direct lobbying, astro turf lobbying and advertising to the public. Leading democrats like Joe Trippi and Howard Dean were signed on to push the Eshoo amendment. PhRMA was running ads in several districts, supporting the Eshoo Amendment (See the link to the Daily Kos blog below for one example). Pfizer and other companies switched sides, and began to give more to Democrats than Republicans. In the end, it was a crushing defeat for consumers.

Democrats – 10 Nay votes

Henry A. Waxman, CA, Chair Nay
John D. Dingell, MI, Chair Emeritus Nay
Frank Pallone, Jr., NJ Nay
Lois Capps, CA Nay
Jan Schakowsky, IL Nay
Anthony D. Weiner, NY Nay
Kathy Castor, FL Nay
John P. Sarbanes, MD Nay
Betty Sutton, OH Nay

Peter Welch, VT Nay
Democrats – 26 Yeah votes
Edward J. Markey, MA Yeah
Rick Boucher, VA Yeah
Bart Gordon, TN Yeah
Bobby L. Rush, IL Yeah
Anna G. Eshoo, CA Yeah
Bart Stupak, MI Yeah

Eliot L. Engel, NY Yeah
Gene Green, TX Yeah
Diana DeGette, CO Yeah
Mike Doyle, PA Yeah
Jane Harman, CA Yeah
Charles A. Gonzalez, TX Yeah
Jay Inslee, WA Yeah
Tammy Baldwin, WI Yeah
Mike Ross, AR Yeah

Jim Matheson, UT Yeah
G.K. Butterfield, NC Yeah
Charlie Melancon, LA Yeah
John Barrow, GA Yeah
Baron P. Hill, IN Yeah
Doris O. Matsui, CA Yeah
Donna M. Christensen, VI Yeah
Christopher S. Murphy, CT Yeah
Zachary T. Space, OH Yeah

Jerry McNerney, CA Yeah
Bruce L. Braley, IA Yeah
All Democrats 26 10
Republicans – 1 Nay vote
Nathan Deal, GA Nay
Republicans – 22 Nay votes
Joe Barton, TX, Ranking Yeah

Ralph M. Hall, TX Yeah
Fred Upton, MI Yeah
Cliff Stearns, FL Yeah
Ed Whitfield, KY Yeah
John Shimkus, IL Yeah
John B. Shadegg, AZ Yeah
Steve Buyer, IN Yeah
George Radanovich, CA Yeah
Joseph R. Pitts, PA Yeah

Mary Bono Mack, CA Yeah
Greg Walden, OR Yeah
Lee Terry, NE Yeah
Mike Rogers, MI Yeah
Sue Wilkins Myrick, NC Yeah
John Sullivan, OK Yeah
Tim Murphy, PA Yeah
Michael C. Burgess, TX Yeah
Marsha Blackburn, TN Yeah

Phil Gingrey, GA Yeah
Steve Scalise, LA Yeah
Republicans not voting
Roy Blunt, MO
All Republicans 22 1

KEI (on Huffpo right before the vote [36]), and here after [2].
CALPERS statement [37]
Essential Action release with statements from several groups [38]
Catherine Larkin and Nicole Gaouette, Biologic drugs protected 12 years by House panel bill [39], Bloomberg News, 07/31/2009.
Emily P. Walker, Week 7: House Panel Approves Health Reform Bill [40], MedPage Today, August 01, 2009