Will biologics policy push Phrma away?

WILL BIOLOGICS POLICY PUSH PHRMA AWAY?…. It looks like President Obama has decided to annoy the big pharmaceutical companies in a big way, enough to possibly push PhRMA, which has supported the reform initiative, into the opposition camp.

At issue is the president’s support for a specific measure that would shorten the time that expensive biotechnology drugs would be shielded from generic competition.

Any White House intervention would be welcome news to generic pharmaceutical companies, as well as to some consumer groups, insurers and big employers, which have complained that the proposed House and Senate bills would not allow for robust competition. […]

Both the House and Senate bills would for the first time create rules by which so-called biologic drugs, which are made in living cells, would be subject to copycat competition, saving the health care system billions of dollars over 10 years.

The drugs, which include big sellers like the cancer drug Avastin and the arthritis drug Enbrel, can cost tens of thousands of dollars a year. Biologics are not governed by the Hatch-Waxman Act, which covers generic competition for more conventional drugs made from chemicals, like Prozac or Lipitor. After the patent on a biologic drug expires, competitors may produce similar products, but they are treated by the health care system as if they were entirely new drugs, not substitutes like generics.

To retain incentives for innovation, both the House and Senate bills would provide a brand-name biologic drug with 12 years of protection from competition, even if the drug’s patents expire before that.

The matter appeared settled when the House and Senate passed their versions, but the president personally intervened on this point during this week’s negotiations, pushing to make the exclusivity window smaller than the industry wants. For PhRMA, that means fewer profits. For consumers, especially those fighting cancer, it means more competition and lower prices. In other words, Obama is making the final bill even better.

To put it mildly, the drug manufacturers’ lobby isn’t happy, and is now threatening to pull its support for health care reform. But as Josh Marshall noted, it’s a little late in the game: “Everyone’s already voted. In both chambers. Perhaps someone could change their position if one of the big ticket compromise issues — taxes, abortion, exchanges, etc. — didn’t go their way. But here, is the idea that someone is going to change their vote based on a small revision to the number of years of patent protection against generics because Billy Tauzin giving the ceremonial thumbs down? There’s not even really time or ambiguity enough to come up with a good cover for changing positions on this basis.”

Of course, if voters in Massachusetts decide on Tuesday to kill this once-in-a-generation opportunity to improve a dysfunctional system that punishes millions, it may be a moot point.