Re: OT: Why Biologics remain expensive

[Guest guest]

Articles like this make you stop and think for sure. I can not imagine what the

companies need to spend $100 million for lobbying on. I have never understood

Washington and the way they do things there. You would think that with things as

they are right now, everyone in Congress and the Senate would be looking to

help the people in their State. I am a common sense type of person and so I can

not understand those that are out there to just make more and put themselves as

most important. If this is all actually correct and I have no reason to think

it is not, then it's just wrong. I do not think I could ever be a part of Big

Business they way it is.

OT: Why Biologics remain expensive

Jo's NOTE: Interesting read this one, gives a little insight into the big

business competition behind prescription drugs. And you thought pharmaceutical

companies just wanted to help people get better! LOL

Intelligent Investing

Why Biologics Remain Expensive

Kramer, 12.04.09, 06:00 AM EST

Those generic drug companies lobby just like the rest of big pharma.

http://www.forbes.com/2009/12/03/kramer-health-care-intelligent-investing-pharma\

ceuticals.html?feed=rss_news

At a time when Americans are shopping for bargains and desperately learning how

to live on a budget, it hardly seems appropriate for Congress to be keeping our

health care costs high. But that's exactly what some congressional leaders are

planning to do.

One of the undercards of the health care battle is the issue of affordable

biotech drugs. It hasn't gotten as much attention as the overall health care

reform topic, but it should. One in every 10 health care dollars is spent on

prescription drugs, according to the Centers for Medicare and Medicaid. So how

drugs are priced has a meaningful impact on our total health care costs.

Pharmaceuticals of particular importance are biologic drugs--those created using

biological rather than chemical properties--because they represent an increasing

share of the drugs used to treat illnesses. The number of new biologic drugs is

growing at two times the rate of new chemical-based, traditional

pharmaceuticals, according to a study published in Health Affairs, an industry

magazine.

Biologics are not only significant in terms of the number of drugs being

invented, but also in the types of illnesses for which they provide therapy.

Life-threatening illnesses like multiple sclerosis, anemia, hemophilia, cancer,

diabetes, HIV and rheumatoid arthritis are typically treated using biologic

drugs. As one can imagine, these serious illnesses also have treatment regimens

with equally serious costs behind them. Biologic drugs can cost up to 22 times

more than traditional medications--some as much as $400,000 a year.

Congressional leaders know this. Yet there are some who continue to favor

legislation that would keep the costs of biologic drugs high.

Most pharmaceutical treatments offer both branded and cheaper generic

alternatives. But thanks to Congress, there are no generic versions of biologics

that are legally available in the U.S. That's because congressional leaders like

Rep. Anne Eshoo of California and the late Sen. Ted Kennedy sponsored

legislation granting excessively long exclusivity to biologic drug makers that's

completely separate from the protection already afforded by the current patent

system. So while the landmark legislation that created the generic drug industry

(the Hatch Waxman Act of 1984) provides other drugs with five years of

exclusivity protection, biologic drugs have over twice that in exclusivity--12

years.

This monopolistic exclusivity has forced out competition from the market by

eliminating any economic incentives for the development of generic biologic

drugs.

Debra Barrett, senior vice president of government affairs for Teva North

America, the world's largest generic drug maker, put it this way: " Washington is

stifling competition, and this is hurting patients by saddling them with higher

drug costs. Congress is missing an enormous opportunity to decrease the health

care costs of Americans by refusing to allow a competitive biologics

marketplace. "

The savings potential is significant. A study by Dr. Shapiro, a

Harvard-trained economist, estimated that enabling generic options on just the

top 12 categories of biologic treatments with expired patents would save

Americans between $236 and $378 billion over 20 years--an average of some $31

billion a year.

That's big money at a time when Americans could certainly use it. Unfortunately,

Big Pharma throws around big money too. Despite the Obama administration's

laudable public stance restricting the influence of special interest groups,

lobbyists for the drug manufacturers have been active in Washington. In the

first half of 2009, pharmaceutical industry groups spent $110 million in

lobbying--roughly $600,000 a day--to further guarantee that the exclusivity they

enjoy on biologic drugs is unaffected by current health care reforms. These are

the health care reforms that ironically are intended to decrease costs to

patients.

Individual legislators have benefited from Big Pharma's largesse too. Rep.

Eshoo's congressional district, home to Allergan ( AGN - news - people ), has

received over $1.4 million in political contributions from pharmaceutical and

biotechnology companies, including from Amgen ( AMGN - news - people ),

& ( JNJ - news - people ) and Roche ( RHHBY.PK - news - people ), the

parent company of Genentech ( DNA - news - people ). Ted Kennedy's Senate

library received $5 million from Amgen--one of the largest donations in history.

The weight of this money and influence is now causing the Obama administration

to stay silent on its prior support of opening up the drug market to competition

from generic biologics. It couldn't come at a worse time. With the economy

needing competitive companies with fresh products and consumers needing a break

on their spending, the impact of this aspect of health care reform is

far-reaching.

But unless congressional leaders vote because of the money they could save

patients rather than because of the money spent by lobbyists, the average

American will continue to face unnecessarily serious costs for treatment of the

most serious of diseases.