Fight over generic biotech drugs sidesteps giant issue

by Anne Zieger on September 22, 2010

PillsSo, over the last several months members of Congress have been fighting over patent protection for biotechnology drugs. The issue at hand is whether pharmas should get 12 years of protection from generic competition.

Right now they have that right, which was given to them in the health reform law. But some members of Congress, notably Rep. Henry Waxman (D-Calif.) want to shave that period down to four or five years — a change which, not surprisingly, has the pharmas on full attack mode.

For consumers getting down prices for biologics is certainly a big deal. These drugs, which treat a range of conditions including psoriasis, cancer and rheumatoid arthritis, are astronomically expensive at present, with some pricing out at a staggering $$35,000 per year or more.

But if the FTC is right, generic biologics wouldn’t have the massive impact consumer advocates want.  In a recent report, the Commission concluded that a shorter protection period would only cut prices down 10 percent to 30 percent, since only a few biotech firms would actually make the generics.

Meanwhile, the absolutely astonishing profits pharmas make on traditional branded drugs aren’t getting anywhere near as much discussion on the Hill.  The Generic Pharmaceutical Association, admittedly a partisan voice, asserts that 75 percent of scripts filled are generics, yet consume only 22 percent of overall drug spending.  It also contends that generics saved consumers $824 billion over the last 10 years.

Biased or not, though, any consumer who’s hit the pharmacy for a branded drug will find these numbers to be fairly credible.

So, where’s the screaming over the “pay for delay” deals, in which pharmas pay generic manufacturers to hold off on legitimate sales of off-patent drugs?  Where’s the government pressure to give Medicare and Medicaid better deals?  In short, where’s the outrage?

Truth to tell, the outrage does exist, but it isn’t focused.  Pharma pricing issues are immensely complicated, with benefit managers, retail pharmacies and a host of other intermediaries jockeying for position.  Even sophisticated healthcare execs get a headache when they try to dig into the issues.

Still, that’s no excuse to ignore such a massive problem.  Think about it, providers:  how often are patients being injured or even dying for lack of a branded drug?

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