Jill Wechsler
|
Sponsors of biomedical research generally support initiatives to make the nation's costly health care system more efficient
and effective. Expanding coverage to some 45 million Americans is not only a moral necessity, which President Barack Obama
emphasizes, it also would greatly enlarge the pool of customers for drugs and medical products and enhance compliance with
prescribed treatments.
That said, pharmaceutical companies are leery of being hit with cost controls and regulatory changes designed to help pay
the trillion-dollar cost of achieving universal coverage. Congressional leaders propose to increase access to health care
by expanding Medicaid; requiring all individuals to obtain coverage; mandating that employers play (provide insurance to workers)
or pay a penalty; reforming the insurance market to limit exclusions based on pre-existing conditions; and forming an insurance
exchange that will offer coverage options to the uninsured, including some kind of government-supported public plan.
Policy makers are looking to pay the $1 trillion coverage bill with tax increases, Medicare and Medicaid savings, and policy
changes designed to reduce health care expenditures. The main concern of medical product manufacturers is that such approaches
will curb revenues needed to support future R&D and will promote product cost over quality and effectiveness.
"Encouraging innovation needs to be the purpose of U.S. health care reform, not its victim," said Eli Lilly Chairman John
Lechleiter in a speech in Washington in May. He complained that the word "innovation" never comes up in the health care debate,
but that it's imperative to "preserve an environment where innovation is possible." The mantra for industry is that appropriate drug utilization and better compliance with prescribed treatment will curb health
care spending over the long run. Lechleiter acknowledged that the status quo is not an option, and that improved access and
cost management are critical. At the same time, reform needs to maintain choice in coverage and treatment and to address the
health care needs of individual patients.
New pathways
The tradeoff between protecting innovation and expanding access to needed medicines is central to the debate over establishing
a legal pathway for FDA approval of follow-on biologics (FOBs). Innovator firms now support authorization for biosimilars,
provided that establishes sufficient market exclusivity for biotech manufacturers to recoup investment in R&D. The Congressional
Budget Office (CBO) has calculated that an FOB program with a moderate exclusivity period, say around seven years, would generate
about seven to $10 billion over 10 years. The savings would be less with the 12 years of exclusivity adopted in legislation
approved last month by the Senate Health, Education, Labor and Pensions (HELP) Committee. Even fairly modest savings estimates,
though, are enough to spur negotiations to get an FOB measure into the final reform bill.
Reformers also eye other proposals for increasing access to generic drugs, such as a ban on payments by brand-name firms to
generics companies to delay generic competition. Barring pay-for-delay settlements, according to Federal Trade Commission
chairman Jon Leibowitz, would save the federal government $12 billion over 10 years and yield even greater savings to consumers
and states. Leibowitz also supports curbs on authorized generics, but evidence that these products may lower drug prices may
keep it out of the health reform legislation.
