As I was raised in Canada, I do not have the usual grounding in "How a Bill becomes a Law," which every school child in the U.S. gets. One would think, though, that having worked in public policy since 1995, that I would have grasped the process by now. The technical stuff (voting procedures, signatures, and committees) is easy. But what is *really* going on? How do people's opinions crystallize into ideas, form into language, and ultimately get incorporated into legislation? It is a baffling process, and in spite of having hurled myself under the bus of this process for some years in an attempt to change its course, I understand it no better.
Influencing legislation often seems to be mostly a matter of having the good luck to have one's idea come to the attention of the right person at the right time. Personal connections, favor, and chance association still, by and large, seems to be the way things get done, as if we were still living in Elizabethan times, as if all our formalities and process did not matter at all. One recent illustration of this is the "public option" for health care insurance, proffered in recent legislation.What is behind this idea, and where did it come from?
din over health care legislation obscures the subsidiary fights occurring at
odd corners of the battlefield.
One of these concerns data exclusivity for biotch research results, an important topic of
passionate interest to the industries involved that gets no attention whatsoever from
anyone else. (For a description of the issue, go here.)
industry wants an exclusivity period of 12 years (well, it wants more, but will
settle for 12), and it appears to have locked this into the existing
legislation in both the House and Senate, over the opposition of House health
baron Henry Waxman and the Administration, who think 7 years is enough.
nothing is over until its over, and Waxman and the Administration, and the
generic manufacturers, have not quit trying to squeeze the period down,
according to the AP. It
could just be bargaining, notes the article. In the sink of corruption called DC, there is no particular reason to think the advocates of a
shorter period believe actually this is pro bono publico:
drug industry . . . is already under pressure to boost the $80 billion, 10-year
contribution it agreed to make to the overhaul last year.
effort to reduce biotech drug protections could be a way for the administration
to pressure the industry to increase its contributions, or to make it easier
for Obama to show the $80 billion deal with drugmakers will benefit consumers.
I favor more IP protection rather than less, for reasons explained in Bleeding
whatever the outcome, it would be nice to have the decision made as a result of
an assessment of the needs of the innovation system rather than on the basis of
an auction of political support.
Biotech is afraid that all the work (if one can apply this name to massively
expensive influence peddling) already done may be for nought. If health care
does not pass, then this issue, like many other sub-problems, will be back to
square one, and the incentives for innovation will continue to suffer from regime uncertainty.
This is unfortunate, because the only realistic road to increasing the efficiency of the system goes through fostering innovation, not discouraging it.
Hidden within the new healthcare bill is a change in status for
insurance companies from independent, for profit entities, to something
more along the lines of a public utility, with rates set by anonymous
boards, insulated from public reaction by the usual layers of
bureaucratic obfuscatory edifices. Insurance companies have always
defaulted in their rates to converge on Medicare fees. With the new
government control of the insurers (who gain a new, captive group of
healthy rate payers, ie guaranteed profits, while giving up risk and
freedom; the insurance companies are not at all unhappy with the bill
and that should be informative) we will all be the beneficiaries of a
system which is designed to see patients and Doctors as adversaries
costing money for no benefit to the bureaucracy.
It is difficult for me to see how this can be anything but bad news for progress in both pharmaceuticals and medical devices. Innovation just complicates the lives of these bureaucracies, raising unpleasant problems of cost and access. Nobody needs it but the patients, and they won't vote when they're dead anyway.
I don't begrudge a man his beliefs. The demagoguery, on the other hand,
is a bit much. If he would take a week next summer when the Senate is
not in session and work at a medical device company, he might gain an
appreciation for just how difficult it actually is to bring a product
out of the lab, through clinical studies, submit it to FDA and get it
to market. It is many years and a great deal of money invested in the
project, after which the company might get yelled at by elected
representatives for "profiteering."
Sorry TH, but I do begrudge a man his beliefs, when they cross the line into utter nonsense. The speech said:
The day will come, although I recognize it is not today, when the Congress will have the courage to stand up to the private insurance companies and the drug companies and the medical equipment suppliers and all of those who profit and make billions of dollars every single year off of human sickness.
I was under the impression that all these actors made money from alleviating human sickness or spreading risk, and that these are good things. Now that I have been educated, I can see many applications for the philosophy, as Congress gets the courage to stand up to:
all those farmers, food processors, and distributors who make billions off of human hunger;
all those construction workers, equipment makers, and financiers who make billions off of human shelter;
all those gas drillers, coal miners, and generating companies who make billions off of human shivering (whoops! that one is already a cliche);
all those computer makers, software designers, game creators, and ISPs who make billions off of human boredom.
The list could be extended indefinitely.
And even in a socialist paradise, people would have to be paid (and thus profit) to produce medical care, food, shelter, etc., so I simply cannot track the thought processes at work here.
Having seen a non-market economy, I suddenly
understood much better what I liked about a market economy. . . . Number one, that it works. Number two,
that it's moral. Not always, and not everybody in it is moral, but
the system is, I think, a moral one. . . . In the sense that people who produce
things and work get rewarded, statistically. You don't get rewarded
precisely for your effort, but in Russia you got rewarded for being
alive, but not very well rewarded. A worker's paradise is a
consumer's hell. People were beaten down. Everybody drank too much.
Everything was hostile and dysfunctional. It was a good education
about why the U.S. was a better place.
Producers of all kinds better understand that it not just pharmaceutical companies and medical device makers that are under assault; the contempt for the efforts of these worthy citizens is sort of all-purpose, ready to be retargeted at any useful enterprise that wanders within range.
Meanwhile, in Copenhagen, Hugo Chavez gets a rousing ovation for attacking capitalism.
[A] medical device executive addresses the Senate Democrats (and, if necessary, Senator Snowe):
we live in a world that has patients, and those patients have to be
treated with technology. Whose gonna invent, develop it, and build it?
You, Senator Sanders? You, Senator Reid? I have a greater
responsibility than you could possibly fathom. You weep for high health
care costs, and you curse new medical technology. You have that luxury.
You have the luxury of not knowing what I know. That new medical
technology, while expensive, saves lives.
And my existence, while grotesque and incomprehensible to you, saves
lives. You don't want the truth because deep down in places you don't
talk about in front of cameras or in committee hearings, you want me on
that production line, you need
me on that production line. We use words like innovation, quality, and
safety. We use these words as the backbone of a life spent helping
injured people. You use them as a punchline. I have neither the time
nor the inclination to explain myself to a man who rises and walks by
virtue of the very medical technology that I provide, and then
questions the manner in which I provide it. I would rather you just
said thank you, and went on your way. Otherwise, I suggest you pick up
a biomedical engineering degree, and get to work inventing better
medical devices. Either way, I don't give a damn what you think you are
FierceBiotech says that the Health Care Reform draft includes a 12-year data exclusivity provision for biosimilars, thus following the Senate, and dealing a loss to Henry Waxman.
However, passage of Health Care Reform in the near future seems improbable, so the data exclusivity issue will still be open. The House Health Committee is solidly in favor of the longer period, though.
Also, FB's John Carroll notes:
At some point, rising costs may force lawmakers to actually get tough
with drugmakers, and that would have an effect on biotech--the de facto
R&D arm of the global drug industry. So far along, the industry has
managed to dodge a bullet. But something tells me that the war over
drug prices won't be ended by this reform bill.
At The American, a new article Bleeding Biotech, arguing for better protection of intellectual property in data. I frame the question as
In the end, we will never be able to arrive at agreement on the
perfect period for data protection for biological research. There is
still no agreement on the proper period for patent protection, and that
system has been around for hundreds of years. A 20-year period was
picked for patents, and it seems to work well enough, so the failure to
achieve perfection is not of great concern.
With regard to biotechnology and data exclusivity, we are and will
remain similarly ignorant. So the question is actually quite simple:
what are the costs of error in each direction?
The answer is that the costs of too much protection are low, or non-existent; the costs of too little are very high. Which should make the decision easy.
Back in the real world, investors seem dubious about the industry. Xconomy is running a series and concluded: "Luke did a massive analysis of the financial health of all the public biotech companies we follow the Boston area and the news… Well, it wasn’t good." The situation:
Even though jobs have been cut, drug candidates have been shelved,
and some last-ditch partnerships have been struck, all that frenzied
activity didn’t really add up to a strengthened financial future for a
majority of the region’s money-losing companies. The cash crunch has
prompted a couple of Massachusetts companies to fold this year . . . a couple more to sell out
for a pittance . . . and one company
that actually improved its financial position to move to Wisconsin . . . .
Rather than worrying about sharing the wealth, the political system should be worrying more about how to produce the wealth in the first place. The Xconomy report is not exactly a harbinger of Spring.
He analyzes a new study by economist Frank Lichtenberg published by the NBER and finds that the answer is "no."
FIrst of all: "[L]ife expectancy increased
faster in states that more rapidly adopted advanced diagnostic
imaging techniques, newer drugs, and attracted an increasing
proportion of doctors from top medical schools." But: there was no correlation between increases in spending on high-tech and new drugs and increases in per capital health care expenditures.
Lichtenberg's tentative explanation is that "while
newer diagnostic procedures and drugs are more expensive than their
older counterparts, they may reduce the need for costly additional
Bailey's translation: "In other words, high-tech medicine may
initially cost more, but it reduces spending in the long run, while
increasing the life expectancies of patients."
So contrary to the fashionable CW, innovation in pharmaceuticals and devices is a remedy for the cost inflation, not a cause.
[K]eep in mind that every government run healthcare system treats
innovations as expenses to be minimized rather than as opportunities to
enhance life. This is inevitable and one of my major reasons for
opposing the current plans for fundamental reform in how we finance our