UCSF Physicians Respond to Rep. Eshoo on Evergreening Loophole in Biologics Bill

By: Alexander C. Tsai, M.D., Ph.D. and Nicholas Rosenlicht, M.D.

As psychiatrists who provide critical psychological counseling and support for many patients living with HIV/AIDS in San Francisco, we have observed firsthand how "evergreening" by the pharmaceutical industry has adversely affected our patients. Prompted by the passing of another World AIDS Day, we wrote an op-ed in the San Jose Mercury News outlining our concerns with Representative Anna Eshoo’s (D-California) co-sponsorship of the biologics legislation now under consideration as part of the overall health care reform package weaving its way through Congress ("Eshoo needs to close loophole in biologics legislation", Dec. 2). Rep. Eshoo responded with an op-ed several days later ("Biologics bill will help make breakthrough drugs more widely available", Dec. 6). Given the space limitations of the newspaper "letter to the editor" format, the purpose of this blog posting is to respond to her remarks in detail.

Eshoo: "As Congress has moved to overhaul the health care insurance industry in America, I’ve been struck by some of the myths put forward by opponents of the effort that have gained traction: death panels, government takeovers of health care, free care for illegal aliens and so on.

Response #1: Rep. Eshoo’s argumentum ad hominem is an attempt to lump our position together with views traditionally espoused by Republicans.

We are disappointed in Rep. Eshoo’s use of ad hominem. As physicians, our primary concerns about her biologics bill have to do with its adverse effects on our patients and how it will diminish access to new lifesaving biologics both now and in the long run. Our Dec. 2 op-ed was reasonably worded and dispassionately argued. We did not, for example, characterize Rep. Eshoo as an industry pawn even though it is documented that she has received more than $600,000 in campaign finance contributions from the pharmaceutical and health care industries over the past decade.

In contrast, it is ad hominem for Rep. Eshoo to cite emotionally charged material such as "death panels" and anti-immigration activists. Clearly our op-ed had nothing to do with "death panels" and anti-immigration activists, so there is no need to introduce these concepts into a debate about biologics policy. However, we do observe that these positions have been conventionally espoused by Republican policymakers and activists. The effect of Rep. Eshoo’s ad hominem is to link our concerns with theirs, psychologically, in the eye of the reader. Nothing could be a falser accusation.

Eshoo: "But I’ve been particularly troubled by misrepresentations about legislation I sponsored to reduce costs and increase availability of biologic treatments — drugs produced from human or animal cells through biotechnology."

Response #2: Rep. Eshoo’s bill will actually preserve high prices on branded biologics and undercut incentives for drug manufacturers to develop truly innovative new biologics.

Rep. Eshoo’s proposed 12 years of data exclusivity ensure that biologics manufacturers can charge whatever prices the market will bear for as long as data exclusivity remains in effect. The Federal Trade Commission (FTC) recently studied the potential effects of proposed follow-on biologics legislation ("Emerging Health Care Issues: Follow-on Biologic Drug Competition", June 2009) and arrived at the recommendation that such a regulatory pathway should be characterized by zero years of data exclusivity. Furthermore, Rep. Eshoo’s bill contains an evergreening loophole (see Response #7 below) that could generate additional delays for generic biologics manufacturers attempting to bring their products to market — meaning that our patients would be paying high prices for branded biologics for years and years to come.

With regards to availability, our criticism of Rep. Eshoo’s bill takes a long view of our patients’ ability to access lifesaving medications. As physicians, we frequently rely on medicines developed by a pharmaceutical industry that relies on research funded by the federal government, and consequently we believe that legislation affecting the pharmaceutical and biologics industries should preserve their incentives to produce truly innovative new medicines. This is why it would likely be to our patients’ detriment for Rep. Eshoo’s bill to be adopted as currently worded. The FTC, in the aforementioned report, also described how granting market exclusivity to branded biologics in addition to their patent terms would lead biologics manufacturers to "direct scarce [research and development] dollars toward developing low-risk clinical and safety data for drug products with proven mechanisms of action rather than toward new inventions to address unmet medical needs" — thus stifling future development of truly innovative new medicines.

Eshoo: "The bill secured overwhelming support in the House and Senate, as well as endorsements from the Association of American Universities, the California Institute for Regenerative Medicine, and more than 70 patient and industry groups, including the AIDS Institute, the ALS Association and the Alliance for Aging."

Response #3: While Rep. Eshoo’s list of industry and industry-funded supporters is impressive, we would be interested in seeing a list of her non-industry affiliated supporters.

We attempted to set aside the measuring stick of endorsements in our initial op-ed so that we could focus on enumerating reasons to oppose Rep. Eshoo’s bill. However, we understand that her description of her list of endorsers is a critical component of her argument. Therefore, it may be instructive and more transparent for voters to understand who endorses her endorsers. The three disease-based advocacy organizations she lists in her rebuttal op-ed are documented to have received corporate funding from Pfizer (AIDS Institute, ALS Association, Alliance for Aging Research); Novartis (ALS Association, Alliance for Aging Research); Wyeth (ALS Association, Alliance for Aging Research); Tibotec (AIDS Institute); Abbott, Amgen, Biogen Idec, Mylan, Novartis, Roche, Sanofi-Aventis, Unilever (ALS Association); and AstraZeneca, Edwards Lifesciences, and Eli Lilly (Alliance for Aging Research). These corporate funding sources are consistent with Rep. Eshoo’s list of industry endorsers, which includes the Biotechnology Industry Organization and the Pharmaceutical Research and Manufacturers of America, as well as numerous state biotechnology associations.

Industry seeding of patient and disease-specific advocacy organizations may generate potentially fruitful collaboration but can also distort the agendas of these advocacy organizations. This phenomenon is particularly well-characterized in the field of psychiatry ("Giving Legs to Restless Legs", PLoS Medicine, 2006; "Drug Makers are Advocacy Groups’ Biggest Donors", New York Times, Oct. 21). Senator Charles Grassley (R-Iowa) has long expressed concern that industry funding of patient and disease advocacy organizations may create conditions for the pharmaceutical industry to exert undue influence over them to lobby on behalf of industry, rather than on behalf of patients ("Senator Grassley Seeks Financial Details from Medical Groups", New York Times, Dec. 7). Given that Rep. Eshoo’s bill has been described in a recent page one San Francisco Chronicle article as "a multimillion-dollar bonanza" for the biotechnology industry ("Eshoo Bill Huge Boon for Silicon Valley Biotech", Dec. 6), it comes as no surprise to us that Rep. Eshoo’s bill has such a long list of industry champions.

In contrast to Rep. Eshoo’s long list of pharmaceutical industry supporters, many non-industry affiliated consumer, health, and patient groups have recorded their opposition to her bill. The list of opposing groups, recently assembled and posted online by Essential Action, includes the American Medical Student Association, Consumers Union, Public Citizen, National Physicians Alliance, U.S. PIRG, Service Employees International Union, and many others. The full list is available online here, and more information is available here:

Eshoo: "Currently, competitors are free to create products that are similar to innovative biologics, so long as they don’t infringe on any patents. To obtain Food and Drug Administration approval, however, generic manufacturers would have to generate their own safety and efficacy data as though the product were a new drug. Under no circumstances may they rely on the safety and efficacy data of the innovator. This "data exclusivity" protection is essentially infinite under current law. The Kennedy-Eshoo language would bring this period of protection down to 12 years, concurrent with existing patent protections."

Response #4: Rep. Eshoo favorably compares the current "infinite" duration of data exclusivity to her proposed 12 years, when in fact her proposal compares unfavorably to the zero years of data exclusivity supported by experts.

Rep. Eshoo is right to point out that, under the current policy regime, data exclusivity is "infinite" because no regulatory pathway for biologics exists. However, we view this as an unnecessary appeal to the "anchoring bias" that is a well documented phenomenon in psychology and behavioral economics ("Judgment under Uncertainty: Heuristics and Biases", Science, 1974). When compared to "infinite", certainly Rep. Eshoo’s proposed 12 years of exclusivity may actually seem reasonable to the naïve reader.

However, Rep. Eshoo neglects to name the other anchoring points that are also available. The 12 years of market exclusivity provided by her bill is more than double the five years that conventional pharmaceutical drugs (i.e., new molecular entities) currently receive. The FTC, as noted previously, recommended zero years of data exclusivity for branded biologics. Rep. Henry Waxman (D-California) and colleagues, and Sen. Charles Schumer (D-New York) and colleagues, have proposed legislation to grant branded biologics manufacturers five years of data exclusivity, comparable to what conventional pharmaceutical drugs currently receive. President Barack Obama has recommended a "generous compromise" of seven years of data exclusivity ("Costly Drugs Known as Biologics Prompt Exclusivity Debate", New York Times, Jul. 21). When compared to these alternative anchoring points, Rep. Eshoo’s proposed 12 years of exclusivity is more appropriately viewed as an unnecessarily lengthy duration of protection.

Finally, irrespective of whether a final biologics bill contains 12 years vs. zero years of exclusivity, it is important to note that Rep. Eshoo’s bill contains a glaring evergreening loophole that we already described in our Dec. 2 op-ed: simple, inexpensive modifications to drug structure can trigger additional years of data exclusivity. We develop this argument further below.

Eshoo: "[The twelve years of proposed data exclusivity] is the typical amount of time all drugs now receive under patent protection following FDA approval, so the actual period of protection will remain the same in most cases."

Response #5: Rep. Eshoo obfuscates the difference between patent protection and data exclusivity, which obscures the fact that experts have recommended zero years of data exclusivity given the adequacy of existing patent protections for biologics.

In comparing her proposed period of data exclusivity for biologics with the average duration of effective patent protection for conventional drugs, Rep. Eshoo is comparing apples to oranges. The duration of patent protection and the duration of data exclusivity are two different issues, and Rep. Eshoo’s prior writings on this issue clearly demonstrate her understanding of the difference between the two. The patent system already provides adequate market protection for branded biologics. As discussed extensively in a paper published in the New England Journal of Medicine ("Balancing Innovation, Access, and Profits — Market Exclusivity for Biologics", Oct. 14), biologics already receive adequate patent protection under the current regulatory apparatus. As an example, these experts describe how Amgen, the maker of Epogen® (a biologic used to treat anemia), has invoked patents to prevent competitors from importing into the U.S. similar drugs that have already received European regulatory approval. Because of the adequacy of the 20 year patents that biologics already receive, FTC experts have recommended that branded biologics receive zero years of data exclusivity rather than the 12 years that Rep. Eshoo has proposed.

Eshoo: "Contrary to the claims of insurers, the generic drug industry and its supporters, the bill does not provide innovators additional years of exclusivity if they make slight changes to their products, a practice known as evergreening."

Response #6: Rep. Eshoo’s second ad hominem attack is an attempt to lump our position together with those taken by the health insurance and generic drug industry.

We are again disappointed that Rep. Eshoo has resorted to ad hominem attacks, which are quite unnecessary in the context of a policy debate. Similar to her opening ad hominem attempting to link us with "death panels" and anti-immigration activists (see Response #1 above), it is ad hominem for her to lump us in with "insurers, the generic drug industry, and its supporters". In contrast to the more than $600,000 in campaign finance contributions Rep. Eshoo has received from the pharmaceutical and health care industries over the past decade (and unlike most physicians nationally), over the past decade neither of us has accepted any food, gifts, or payments from pharmaceutical/biologics (branded or generic) or health care industry representatives in return for attending educational seminars or professional meetings, consulting, giving lectures, or enrolling patients in drug trials.

Furthermore, many of the organizations that have documented their opposition to Rep. Eshoo’s bill — including the American Medical Student Association, Consumers Union, Public Citizen, National Physicians Alliance, U.S. PIRG, Service Employees International Union, and many others (full list available online here) — do not accept funding from either the insurance industry or the generic drug industry, and they would likely characterize their positions in the biologics debate as being more closely aligned with patients than with either industry.

Eshoo: "The plain language of the legislation provides that new indications, new routes of administration, new dosage schedules, new dosage forms, new delivery systems, new delivery devices, and new strengths for an original product would get zero years of extended data exclusivity."

Response #7: Rep. Eshoo’s appeal to the "plain language" of the legislation ignores the evergreening loophole that we described in our initial op-ed.

We are pleased that Rep. Eshoo has recorded her opposition to the practice of evergreening. If in fact she is opposed to evergreening, all that remains is for her to change the wording of her proposed bill to be more consistent with the position that she has just described. It is true that, under the language Rep. Eshoo introduced, changes to an already approved biologic that result in "new indications, new routes of administration, new dosage schedules, new dosage forms, new delivery systems, new delivery devices, and new strengths" in the absence of a change in drug structure are specifically exempted from receiving 12 additional years of data exclusivity. However, this does not mean her bill would actually limit the practice of evergreening (which she has attempted to argue). Under this language, if a branded biologics manufacturer performs "a modification to the structure of the biological product" that results in one of the enumerated changes, they are in fact not exempt from receiving 12-years of data exclusivity on the modified product. As Ethan Guillen, Chris Manz, and Sarah Rimmington have pointed out, this language creates an evergreening loophole by permitting a branded biologics manufacturer to implement easily performed and inexpensive structural modifications just as the original protection period is about to expire — and receive another 12-year data exclusivity protection period on the modified product.

As psychiatrists who advocate fiercely on behalf of our patients, we dislike the practice of evergreening and are intimately familiar with its adverse effects. For example, Johnson & Johnson, facing expiration of its patents on the blockbuster drug Risperdal® (commonly used to treat psychotic thought disorders), took the active metabolite and marketed it as Invega® — thereby extending its patent shelf life. To the body it is the same drug, but it now carries a higher price tag: a one-month supply of a typical dose of Risperdal® costs $300, whereas a one-month supply of Invega® costs four times as much. Based on our experience with the behavior of conventional pharmaceutical manufacturers like Johnson & Johnson, we have strong reason to believe that brand-name biologics manufacturers will attempt to do the same under Rep. Eshoo’s legislation. Indeed, it is quite likely that in many or most cases this prospect will deter generic biologics manufacturers from entering the biogenerics market at all.

Fortunately for our patients, it would be quite simple for Rep. Eshoo to narrow this problematic loophole by removing the bracketed language in section 7(C) of the biologics provision in the House health care bill, which reads "(not including a modification to the structure of the biological product)." Removing this bracket would allow the provision to operate as she claims, by exempting modified versions of existing products from receiving another 12 year period of data exclusivity. If Rep. Eshoo is truly committed to "zero years of extended data exclusivity", she can to demonstrate that commitment by making this simple language change. We strongly encourage her to do so.

Eshoo: "I’m disappointed that the mischaracterizations and falsehoods of insurance companies and generic drug manufacturers who oppose the Kennedy-Eshoo bill continue to surface, but I’m committed to seeing that this critical legislation is enacted into law for the benefit of patients across the country."

Response #8: This is Rep. Eshoo’s third ad hominem in the span of 600 words.

We reiterate our disappointment in how Rep. Eshoo has chosen to attack us (rather than addressing the substance of our arguments) by lumping our position together with those espoused by insurance companies and generic drug manufacturers. This is an unnecessary rhetorical tool and has no place in a policy debate.

Summary Response: In sum, we find Rep. Eshoo’s rebuttal op-ed unconvincing. She ignores our concerns about how her bill would undercut branded biologics manufacturers’ incentives to produce new, truly innovative medicines. Her rhetorical tools do little to refute our argument that her proposed 12 years of data exclusivity is too lengthy a period of protection given the adequacy of the current patent protection regime for conventional drugs. She resorts to ad hominem attacks three times in the span of 600 words. And finally, she sidesteps our frank discussion of the evergreening loophole in her bill. We outline concrete steps that Rep. Eshoo can take to demonstrate her commitment to closing the evergreening loophole, for the sake of our patients. Ultimately, we hope that she reconciles her priorities with those of the poor and excluded.

Alexander C. Tsai, M.D., Ph.D. is a psychiatrist at the Langley Porter Psychiatric Institute, University of California at San Francisco (UCSF) and a resident of San Francisco. Nicholas Rosenlicht, M.D. is a clinical professor of psychiatry at UCSF and maintains a private practice in Berkeley, where he resides.

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