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Anna Eshoo's PhRMA Boondoggle: The Devil Is In Her Details

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As a three-time breast cancer survivor, I have a strong personal stake in health care reform. So when students from the American Medical Students Association wrote us at PublicOptionPlease.com and told me about their campaign to keep biologic "drugs of the future" available and affordable, I was eager to help.

Incredible developments have been made in recent years with these "high tech" drugs made from living cells, which now represent 25% of all new drugs and 50% of all important drugs approved. But I know from personal experience that they can be prohibitively expensive, even for people like me who are fully insured. Senator Sherrod Brown has been a powerful advocate for making sure that one day they will be available in generic form:

All too often, the pricetag for this type of drug is simply too high for the patient who needs it. For instance, annual treatment for breast cancer with the brandname biologic drug Herceptin costs $48,000. Even if you are lucky enough to have health insurance and you are paying 20 percent copay, that is $9,600 a year. More than 192,000 American women will be diagnosed with breast cancer in 2009. How are they going to afford that kind of drug?

Senator Brown and Congressman Henry Waxman proposed legislation that would make these drugs available in generic form after giving companies a 5 year monopoly to recoup their costs. Sadly, they lost out to legislation offered by Rep. Anna Eshoo in the House and Senator Kay Hagen in the Senate, which was much more generous to pharmaceutical companies at the expense of those who badly need these drugs.

I wrote about what this means to many breast cancer survivors like me:

[T]hanks to Representatives Anna Eshoo and Joe Barton, there will be no generic versions of [biologic] drugs. At least not for 12 years, if the House health care bill announced today passes. And because of an "evergreening" clause that grants drug companies a continued monopoly if they make slight changes to the drug (like creating a once-a-day dose where the original product was three times per day), they will never become generics.

Representative Eshoo responded in both the Hill and the Huffington Post, saying she was "quite frankly outraged by the falsehoods and misrepresentations in Ms. Hamsher's column." She resoundingly refutes the claim about "evergreening":

There is no 'evergreening' clause in my legislation. There is in fact an 'anti-evergreening' clause which explicitly provides no new exclusivity period would be granted for "a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength." My amendment prohibits by its plain language exactly what Ms. Hamsher alleges it would encourage.

I can't tell you how happy I am to hear that Rep. Eshoo did not intend to put an evergreening period in her bill. Because not only would it apply to important breast cancer drugs, but also to drugs yet to be developed for everything from Alzheimers to an AIDS vaccine. Thank you, Rep. Eshoo, for your commitment to having a bill that does not allow for "evergreening."

Now the question becomes -- how are we going to get one?

Because I went back and read the bill again. And I double checked with a number of experts including Ethan Guillen, Executive Director of Universities Allied for Essential Medicines (UAEM), Chris Manz, UAEM student at Duke University, and Sarah Rimmington, Attorney at Essential Action., Access to Medicines Project. They've been working on this bill a long time too, and they all concur that Rep. Eshoo's bill doesn't say what she believes it does.

They wrote a response to her impassioned post today:

The clause Representative Eshoo refers to does appear on its face to exclude changes that result in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength from being eligible for a new 12-year exclusivity period. Unfortunately, her understanding of how the language operates is incorrect. The existence of the language in the bracket "(not including a modification to the structure of the biological product)"--actually does create a huge evergreening loophole. If you look closely at the tricky language of the sentence you will see that changes to biologics that result in new indications, routes, dosing schedules, delivery systems, strengths, etc., are ineligible for another 12- year exclusivity period under the Eshoo approach only if they come about without a modification to the structure of the product.

In other words, if a company makes a modification to the structure of the already approved biologic that results in a new indication or any of the other items listed, they will be eligible for a brand new 12-year exclusivity period. Unfortunately, because the term "structural modifications" is not defined, interpretation is open to a very wide range of possible changes that will qualify for a brand new 12-year monopoly, many of which are relatively simple and inexpensive to do, and which do not change a drug in any material way.

Henry Waxman concurs with them. Here's what he had to say about Rep. Eshoo's amendment during markup:

I strongly believe that adoption of this amendment exactly the wrong way to achieve increased competition and lower prices nor will it enhance innovation.

This amendment enacts a lengthy monopoly period -- twelve years -- and then allows those periods to be extended indefinitely, the so-called "evergreening problem."

Rep. Eshoo didn't respond to Rep. Waxman's statement at the markup, but I'm sure she'll appreciate having the Chairman of the Energy and Commerce Committee to back her up when she tells Speaker Pelosi that she needs to re-write her language before H.R. 3200 passes the House in order to achieve her objective.

Rep. Eshoo is also relying on some questionable data for other conclusions she reaches. For instance, she wants a 12-year data exclusivity period on biologic drugs, "which is the same amount of time that all drugs enjoy on the market under patent protection."

I'm sure she's not trying to be intentionally misleading, but conventional drugs get 5 years of "data exclusivity." That's not the same thing, as she takes pains to explain earlier in her post, as "patent protection."

She says drug companies spend billions of dollars to bring biologics to market, and that it's "necessary to allow some period of time to recoup the investment in developing the drug."

But according to PhRMA's own research, the average development cost for biologics is $1.2 billion, which is less than the $1.318 for conventional drugs (PDF).

In fact, earlier this year the FTC released a study which said biologics needed zero years of exclusivity to recoup their investment, and that the 12 years Rep. Eshoo proposes would stifle innovation and competition and keep drug prices high. They agreed with Congressman Waxman that Rep. Eshoo's amendment would encourage firms to change formulas slightly and retain endless monopolies, rather than seek "new inventions to address unmet medical needs."

In response to the FTC report, President Obama took a "split the baby" approach and advocated that a generous 7-year monopoly be granted to the drug companies. But an aide to Rep. Eshoo dismissed the FTC report entirely, saying "she doesn't really count on the FTC as really being an expert on issues related to drugs and biotechnology."

Rep. Eshoo boasted at the markup about the CBO estimated which said her amendment would save $9 billion over the next decade. What she doesn't mention is that it replaced Rep. Waxman's language in the bill, which never got a CBO score. But an independent study (PDF) indicates that savings from generic biologics would be $71 billion over ten years, which supports Rep. Waxman's claims that Rep. Eshoo's bill will inhibit competition and affordability rather than encourage it.

Her cosponsor, Rep. Jay Inslee, also expressed gratitude at the markup to private investors for investing $1 billion to bring the biologic blockbuster biologic drug Embrel (entanercept) to the market. He should have also thanked the taxpayers. An analysis by Knowledge Ecology International shows that it is doubtful that Amgen spend more than $400 million on clinical development of the drug before approval, and that more than half of the early Phase I and II clinical trials on this drug were funded by the government through NIH or by universities.

Does he think the public deserves anything for their investment too?

The pharmaceutical industry, which has donated over $712,000 to Rep. Eshoo, may be less than happy to learn that she is committed to eradicating evergreening language from her legislation. But as the young medical students who recently protested in front of her office told her staff, access to these lifesaving drugs for their patients is far more important than protecting pharmaceutical monopolies.

Robert Weismann, the President of Public Citizen, says that when Rep. Eshoo is rewriting her language, she should look to Rep. Waxman's bill, which "shows what you'd do if you were trying to avoid evergreening."

I look forward to Rep. Eshoo's swift action to change the language in the health care bill before it is passed and drug companies start asserting protections she stridently says she doesn't want to grant them. And I urge my fellow cancer patients everywhere to reach out to Senators Brown, Schumer, Collins, Stabinow and Vitter and encourage them to do likewise by bringing their much more moderate and fiscally responsible amendment on biologics to the floor of the Senate.

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