With Congress set to go back into session this week and healthcare reform sure to dominate the fall debate, it’s a good time for an update on the biotechnology industry’s efforts to steer healthcare reform its way.

Late in the spring local biotech leaders were acknowledging that reform might indeed be a difficult pill for the industry to swallow. Specifically, they were concerned about biosimilars, or generic forms of large molecule drugs, and the concept of comparative effectiveness, which is comparing the costs and benefits of different medical treatments.

Yet after a long summer of lobbying there is a general sense in the industry that it will not have to give up as much on either issue as it once thought, at least not in the short term.

To be sure, there remain many twists and turns to reform. But here is how things stand now on the two main issues:


Right before the August recess, both the House Energy and Commerce Committee and the Senate Health, Education, Labor and Pensions Committee approved amendments to their chamber’s version of the healthcare reform legislation that gives the makers of biologics a 12-year period of exclusivity before a generic version of the drug can be marketed.

A very brief primer on biologics: They are drugs developed from proteins in the body, not from chemical compounds like pharmaceutical drugs. They can’t be copied exactly like pharmaceuticals, but it is possible to make generic approximations of these therapies if you have access to the right data. Although not allowed in the United States, these so-called biosimilars are on track to become a $100 billion industry worldwide. For more details read this story I wrote on the subject in July.

The committee votes were somewhat surprising given that the Obama administration was pushing for a seven-year period and Henry Waxman, D-Beverly Hills, the powerful chair of the Energy and Commerce Committee, wanted it to be five years. Proponents of the shorter exclusivity periods, which include the AARP, say getting generics out faster lowers the cost of healthcare.

“When I look at where we are at halftime I see that Henry Waxman didn’t get his way on biosimilars,” said Joe Panetta, the CEO of Biocom, the local biotech industry association. “We put in a lot of time and horsepower into that issue.”

However, Obama’s (and just about everyone else’s) requirement that cost containment be a major part of healthcare reform means that the biosimilars battle isn’t over, which Panetta and other industry insiders acknowledge.

Comparative Effectiveness

At the beginning of June, health research consultant Paul Keckley told group of local journalists that the term “comparative effectiveness” would likely end up being one of the big buzzwords in the healthcare reform debate — and that wouldn’t necessarily be a good thing for the biotech industry.

But it hasn’t come to pass, at least not yet. Comparative effectiveness means comparing similar treatments for a specific condition, such as two drugs, or a drug treatment versus surgery. Costs of the various therapies, and how effective they are in different patient groups, are also factored in to the analysis. It is a big part of most universal healthcare systems in the world.

The $787 billion federal stimulus package included $1.1 billion to engineer a comparative effectiveness program for the U.S. healthcare system, the heart of which would be a hugely complex database that would contain diseases, treatments and their costs.

The biotech industry has worried from the beginning that comparative effectiveness would lead to biotech therapies, which are often the most expensive available, being excluded from the list of the covered treatment options. “The question is will an independent arm of the government have responsibility for determining what diagnostics and therapeutics are considered appropriate?” Keckley said in June.

But in a recent conversation Keckley told me that comparative effectiveness is off the table, at least for this round of reform. It is too complicated to do quickly, and not something that can be “cut and pasted” from other country’s programs.

“You are talking about databases that don’t exist,” he said. “This is a very big engineering deal.”


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