Jane Hamsher: Waxman to Eshoo: You’ve Got An “Evergreening Problem”

[seafan]

Jane Hamsher writes:


November 2, 2009


(Waxman video at link)

In her response to my article on her biologics bill, Anna Eshoo vehemently claims it doesn’t allow “evergreening,” which would allow slight tweaks in drug formulas to grant drug companies endless monopolies and keep these lifesaving drugs from ever becoming generics:

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.

That’s news to Henry Waxman. Here he is on July 31, 2009 at the Energy and Commerce markup, on Anna Eshoo’s biosimilar amendment to H.R.3200:

I know that members of this committee support creation of a biosimilar pathway. I know they believe it will bring competition and reduce the high price of biologics. I endorse that, but 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.”

The evidence is overwhelming that these open-ended monopolies will create huge obstacles to competition. To those who want competition in the biologics market, I refer people to a letter from the CEOs of the 28 major generic drug companies. They say, monopolies with this long an unpredictable period of time — that they will not even enter the biosimilar market because there is no economic incentive for them to do it.

To those who want lower cost, look to what the payers are saying and the patients group, a coalition of consumer groups AARP, unions, businesses and state and private payers strongly oppose this amendment because it will rob us of the opportunity to achieve significant cost savings for patients and payers. To those who think this is going to bring innovation look at the report from the federal trade commission which conducted a year-long investigation and concluded that monopolies this long would severely damage both competition and innovation, creating real competition in the drug marketplace is one of the best opportunities we have to control costs.

But by passing this amendment, we’re not only missing a historic opportunity to bend the cost curve. We’re guaranteeing higher drug costs for the foreseeable future.

I understand a large majority of this committee supports this amendment. I do not.

And I will continue to make my case that we need real competition to bring down the costs of our nation’s drug bill not endless monopolies for the drug industry as members continue to look at this issue. I think they will come to understand that this amendment is not the right way to go.

The experts agree with Waxman. Glad to see Eshoo is committed to opposing evergreening, however. She better get to changing her language before her amendment passes the House.

UAEM and AMSA Respond to Rep. Eshoo – Point by Point


By: Ethan Guillen, Chris Manz, and Sarah Rimmington
November 2, 2009

From: The AffordableMedsNow Campaign of Universities Allied for Essential Medicines (UAEM) and the American Medical Student Association (AMSA) http://affordablemedsnow.com / and Essential Action’s Access to Medicines Project www.essentialaction.org/access

Re: Responding the October 30, 2009 Huffington Post article by Rep. Anna Eshoo, “Setting the Record Straight on Our Health Care Legislation”

Date: November 1, 2009


Below are some of the key assertions made by Rep. Eshoo in her recent blog post, followed by our responses to them.

Eshoo: Biotechnology products cost billions of dollars to develop, test and bring to market, and in order to ensure that competitors aren’t immediately allowed to free-ride on the costly safety and efficacy data produced by innovators, some period of ‘data exclusivity’ is necessary to allow some period of time to recoup the investment in developing the drug.

The House and Senate health care bills include a data exclusivity period of 12 years, which is the same amount of time that all drugs enjoy on the market under patent protection, which prevents any competition. I believe the 12-year data exclusivity period preserves the existing incentives for investment in these life-saving products.”

And

Without such a ‘data exclusivity’ period, there would be no reason to invest in new biologics. We would see the flow of research funds going to traditional pharmaceuticals, medical devices, semiconductors, green technology or other more promising innovations.

Response: The brand-name pharmaceutical industry’s own numbers show that research and development costs for biologics and conventional drugs are comparable, and that about the same amount of time is required. Eshoo’s approach would grant 12-years of market exclusivity to brand-name biologics — an extra 7 years of monopoly protection — more than double the five years conventional drugs receive. Moreover, the evergreening loopholes in the Eshoo-Barton approach adopted in the House health committee (which is identical to the Senate health committee’s adopted approach championed by Sens. Hatch, Enzi and Hagan) could make monopoly protection for many products indefinite. This approach doesn’t make sense given the numbers.


Sources for the above:

.....cont'd

Eshoo: It’s important to note that today there is absolutely no restriction on data exclusivity — it’s effectively infinite. Competitors are never permitted to use the data produced by a brand-name biologic manufacturer. The Kennedy-Eshoo legislation brings this exclusivity down from forever to 12 years, in essence laying the groundwork for the creation of the biosimilar industry, new competition for the biotechnology industry, and reduced prices for patients.

Response: It is true that there is currently no pathway to make generic biologics. However, we need a pathway that will work, not one that will introduce so many barriers that the pathway will seldom be used.

Eshoo: Let me individually address the patently false statements in Ms. Hamsher’s post.

“…thanks to Representatives Anna Eshoo and Joe Barton, there will be no generic versions of these drugs. At least not for 12 years…”

The 12-year data exclusivity period in the Kennedy-Eshoo legislation begins from the time of FDA approval. Since the vast majority of the most popular biologics treatments were approved at least 12 years ago, this means that they would have virtually no data exclusivity protection. The important cancer and anemia treatments that millions of patients rely on will be subject to biosimilar competition as quickly as the FDA can process the follow-on manufacturers’ applications. (For example, under my amendment Herceptin’s data exclusivity period will expire in September 2010.)

Response: It is true that for older biologics there is the potential for biosimilars to start coming on the market shortly after an FDA approval pathway is adopted. However, under Rep. Eshoo’s proposal it will be possible for brand companies to make relatively simple and inexpensive tweaks to the older biologics, and obtain a new 12-year protection period for the modified product. Then, based on the experience with conventional drugs, there is very strong reason to believe that brand-name companies will be able to exert their marketing acumen to transition patients (and doctors) to the modified product, and away from cheaper, generic versions of the old product. Indeed, it is quite likely that in many or most cases this prospect will deter generic manufacturers from entering the biogenerics market at all. This practice is called evergreening.

A classic example of how the evergreening process works involves the acid-reflux drugs Prilosec and Nexium. With its best-selling Prilosec facing generic competition, AstraZeneca introduced Nexium, a slight chemical variant of Prilosec. AstraZeneca studies showed the new drug to have the slightest improved performance from Prilosec, not for heartburn, but for “erosive esophagitis,” where burped-up stomach acid injures the esophagus. That slightly improved result enabled the company to launch a full-court press to get consumers to switch from the drug going off patent to the one just coming on. Nexium sells for about 5 times the price of Prilosec. Annual revenues for Nexium, on a global basis, top $5 billion.<1>

Troublingly, under Eshoo-Barton and Senate health committee approaches, evergreening will be easier and more effective for biologics than it is for conventional drugs.

First, in many or most cases, generic versions of biologics will not be identical with the brand-name product. In these cases, the generic product will be treated as “biosimilar” and not “interchangeable,” and will only be available to a patient upon specific prescription by a doctor. There will thus be a built-in bias in the system against switching to generic products — and make it easier for the brand-name company to direct patients to their modified, monopoly-protected products.

Secondly, conventional drug evergreening involves efforts to obtain new patent protection. Patent protection is much less robust than data exclusivity; this is especially true for patents on modifications to products. Generic firms are commonly able to challenge successfully or work around modification patents. By contrast, while the bar for attaining data exclusivity is lower than obtaining patent protection (which requires a new, useful and non-obvious invention), the data monopoly is absolute: it is granted automatically upon FDA marketing approval and is not subject to workarounds.

Moreover, with biologics expected to make up half of all the newly approved drugs in just a few years, we have to be concerned about accessibility to newer and better treatments that will continue to come on the market. Rep. Eshoo’s proposal will give these as yet undeveloped products an unjustified 12-year marketing monopoly, and, more troublingly, the evergreening loophole will also be available to them.

This means that the Eshoo-Barton and Senate health committee approaches will offer only the illusion of urgently needed price-lowering generic competition for biologics. These approaches will torpedo the objective of healthcare cost containment so crucial to current healthcare reform efforts, and severely limit patient access to these important and exceptionally high-priced medicines for conditions like cancer, arthritis and diabetes.

This means Medicare and other federal programs will find their budgets increasingly strained by growing biologic drug costs. Employers will continue to struggle to provide affordable health insurance to their employees. Americans with insurance will find it even more difficult to pay for their already sky-high prescription drug co-payments. And the uninsured may have to go without crucial lifesaving biologics

Eshoo: “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.”

“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.”

Response: The short answer is that the language highlighted by Rep. Eshoo does exactly the opposite of what she says it does: it preserves an evergreening option so long as there is a structural modification made to the biologic, which in the bill is an easy standard to meet. By contrast, Rep. Waxman and Sen. Schumer’s bills show what you’d do if you were trying to avoid evergreening.

The longer rebuttal follows: 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.

Of course, these modifications may offer small or significant patient benefits. But because they are typically easy and inexpensive to design, brand-name firms do not need the lure of protracted monopolies to make these minor modifications.

A key example of the types of modifications that would qualify for a new 12-year monopoly under the Eshoo approach is a process called PEGylaton, which will result in increased safety or a new dosing schedule, route, form, or delivery system. PEGylating a protein is a relatively inexpensive and easily performed structural modification (compared to changing the underlying amino acid structure of the biologic).

Example: Oncaspar is a PEGylated from of L-asparaginase used for the treatment of acute lymphoblastic leukemia. It is used in patients who are hypersensitive to the un-PEGylated form of L-aparaginase. The PEGylated product Oncaspar is now is being encouraged by the company for first line use instead of the older, un-PEGylated versions.<2>

It should also be noted that the Eshoo language does not require a change to the amino acid structure of the biologic — the scientific definition of a truly new medicine — in order to allow a brand product to obtain a new 12-year monopoly.

For your convenience, I have reproduced below the language of the relevant provision from the Eshoo-Barton-Inslee Biologics Amendment adopted by the House Energy & Commerce Committee in their healthcare reform bill in July 2009 in its entirety. (Note that this amendment is identical to that which was adopted by the Senate Health Education Labor and Pensions committee as part of its healthcare reform bill in July 2009)

Section 7(C): Products not eligible for 12 years exclusivity and filing moratorium.

“7(A) and (B) shall not apply to a license for or approval of-

i. a supplement for the biological product that is the reference product; or

ii. a subsequent application filed by the same sponsor or manufacturer of the biological product that is the reference product) or a licensor, predecessor in interest, or other related entity) for

(I) 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; or

(II) a modification to the structure of the biological product that does not result in a change in safety, purity or potency.”

Translation: Subsequent applications filed by the same sponsor or manufacturer are eligible for 12 years market exclusivity and filing moratorium for products that have a structural modification that results in either:

II) A new indication, route, dosing schedule, form, delivery system, delivery device, or strength; or

II) Improved safety, purity, or potency.

Only if the changes that result in the items listed in point I or II are not accompanied by a change to the structural modification are they ineligible for the 12-year exclusivity period. As explained above, it will be very easy for brand companies to make simple and inexpensive structural modifications to many biologics that result in new dosage forms, strength, etc. Thus Eshoo’s understanding of her own amendment’s language is incorrect.

Eshoo: I’m proud to have this legislation endorsed by: The AIDS Institute, ALS Association, Alliance for Aging Research, American Autoimmune Related Diseases Association, Association of American Universities, Candlelighters Childhood Cancer Foundation, former Vermont Governor Howard Dean, M.D., Immune Deficiency Foundation, the National Alliance on Mental Illness and many other patient advocacy groups.

Response: The vast majority of non-industry affiliated consumer, health and patient groups who have weighed in on this issue, plus a huge number of businesses, HMO’s and unions support the approach of Representatives Waxman and Deal and Senators Schumer, Brown, Collins et al, and oppose the approach of Representatives Eshoo, Barton and Inslee and Senators Hatch, Enzi and Hagan. A long list of consumer, health, patient and industry groups supporting the Waxman-Schumer approach and concerned about the Eshoo-Barton and Enzi-Hatch-Hagan approach (along with links to a few specific pieces of correspondence and key WebPages) can be found below. This list may be incomplete.

It also is worth noting that Eshoo-Hatch approach supporter Dr. Howard Dean has recently worked for BIO (the Biotechnology Industry Association), that the universities represented by the Association of American Universities stand to reap larger royalty payments from the patents they hold on biologic medicines for longer monopoly periods, and that the National Alliance on Mental Illness receives three-quarters of its operating budget from brand-name drug makers, according to a recent New York Times article, available at http://www.nytimes.com/2009/10/22/health/22nami.html?_r...

If you do some research, you will likely find that many if not all of the patient groups that back Rep. Eshoo’s approach have significant ties to the brand-name industry, as this is a common practice of Pharma to fund patient and health groups. Very few (probably only two, but possibly a couple more) of the consumer, health and patient groups that oppose Eshoo’s approach take money from the either the brand-name or the generic biopharmaceutical industry. You could search the database created by Essential Action at http://www.pharmafiles.net / to see if any of the other patient and health groups Rep. Eshoo (or this memo) mentions as supporters have industry connections. FYI, the absence of a mention doesn’t mean that the groups don’t have industry ties: the database is a work in progress and there are literally thousands of pharma-funded patient and health groups.

.....cont'd

AMSA Med Students Visit Anna Eshoo’s Office, October 31, 2009



The Effects of the Hatch-Waxman Act on the Returns from Innovation

---from "How Increased Competition from Generic Drugs Has Affected Prices and Returns in the Pharmaceutical Industry", July 1998; Chapter Four



Don't mess with Henry Waxman.






Previous DU discussion thread on this subject



Hold Eshoo's feet to the FIRE.

[inna]

1. awesome. off to the greatest!

[flyarm]

2. rec and thank you for this vital info! eom

[nashville_brook]

3. damn -- totally bookmarking this.

[mmonk]

4. Recommended.

[glitch]

5. Doesn't sound like Eshoo wrote her own amendment.

Perhaps it was given to her verbatem by a lobbyist, with "assurances". Ooops!

[flyarm]

6. sure sounds that way..K&R !

[slipslidingaway]

7. knr nt

[bertman]

8. Yesterday I read what I believe was Rep. Eshoo's rebuttal to Jane Hamsher's statements.

It was pretty hard-hitting and accused Hamsher of intentionally mis-stating the facts. Given that I have found Hamsher's analyses to be spot-on in almost all cases, I was surprised by the tone and ferocity of the Eshoo rebuttal.

Now I am pleased to see that Ms. Firedoglake is doing her usual due diligence and speaking the truth that might otherwise not be heard.

Rec.

[truedelphi]

10. I'd like to rec yourpost as well as the OP

Both are excellent. OP provides much info, you provide praise for Jane. Thanks

[bertman]

15. My pleasure, truedelphi. There is no one who works harder for We The People than Jane

and the folks at Firedoglake. Thanks for the rec.

[enigmatic]

9. K&R

[noiretextatique]

11. thank you for posting

eshoo is a pharma whore...plain and simple.

[flyarm]

12. I wish i could rec 100X..bookmarking to keep for the propaganda that is

sure to find it's way on DU!

I have also sent all this info out to all my email groups.

It is vital that we fight back against the propaganda..the consequences are too great for too many people's lives and health if we don't!

too late after people are screwed over to say ..opps.

[pleah]

13. K&R

[avaistheone1]

14. Don't mess with Jane either.

Great info.

[Kermitt Gribble]

16. Kick!

Jane really seemed to get under rep Eshoo's skin with all her truth telling. Glad other sources are coming out to back her up. These corporate tools need to be exposed at every opportunity.

[seafan]

17. Eshoo Amendment Embraced by GOP in “Alternative” Health Bill -- Care to comment, Ms. Eshoo?

Republicans so heartily approve of Eshoo's biologic drug protection amendment (that squeezes out more affordable generics) that they are adopting it as part of their own *plan*.



Jane Hamsher is right on the money again, about Eshoo's intended amendment.



As Jon Walker at Firedoglake reports:


November 3, 2009

The Republican’s have just released their “alternative” bill to the Democrats’ health care reform legislation. It is frankly a meaningless, very long press release, filled with some really bad ideas. The Republicans did find basically only one section of the Democrats’ reform bill they really liked. In fact, the Republicans thought it was such a great idea that they added it, completely unchanged, to to their alternative bill.

What was the section? It was the Eshoo amendment on the pathway for biosimilars! They took this one division of the Democratic bill, and added it word for word to their own (Republican bill starting page 185 and Eshoo Amendment). I guess the only thing truly bipartisan in Washington these days is shilling for powerful industry lobbyists. It seems the one things Democrats and Republicans can agree on in health care is that lifesaving medication should be given a nearly endless monopoly period, so they are priced out of reach for many Americans in need.

Indeed, Ms. Eshoo, don't mess with Jane Hamsher.

[TheMadMonk]

18. One more big, big nasty. Having found a safer/more effacious "variant"...

...of their product, the biologic developers have every incentive to sit on it until the exclusivity period is close to expiry. Patients could/would be required to accept less than "ideal" treatment, because bog forbid these "great philanthropic organisations" themselves be required to settle for a dollar less than the absolute maximum possible return on their investment.


It would be of interest to note that a great many revolutionary pharmacuticals are actually initially developed by quite small startup companies. These companies do the hard yards: identifying the biochemical pathways of a disease/condition; locating or designing candidate compounds that might be effacious at correcting flaws in/or interfering with those pathways; perhaps even carrying out the stage one trials that give the first real make or break indication as to whether or not they have a viable product candidate. And this is where Big Pharma usually steps in and buys out the startup, because stage 2 and 3 human trials are expensive, and virtually always beyond the finances of the smaller company.