Copyright 2000 Globe Newspaper Company
The Boston
Globe
November 22, 2000, Wednesday ,THIRD EDITION
SECTION: BUSINESS; Pg. C4
LENGTH: 1039 words
HEADLINE:
BIOTECHNOLOGY ISSUES FACING THE NEXT PRESIDENT;
INDUSTRY FACES A TURNING
POINT CONVERGENCE OF LEGISLATIVE PROPOSALS MAY BRING CHANGE TO BIOTECH LANDSCAPE
BYLINE: By Ronald Rosenberg, Globe Staff
BODY:
Prescription drug benefits for those on
Medicare. A further streamlining of the drug approval process. The labeling of
genetically modified foods. And, amendments to the US patent law to allow
generic equivalents of biotech drugs.
These are legislative proposals
facing the next president and the 107th Congress. And they are major issues for
the biotechnology industry when a president is sworn in and Congress reconvenes
in January.
"We have the equivalent of the perfect
storm, not in weather but a convergence of issues in Medicare, the modernization
of the FDA, patent concerns, and tax issues," said Carl Feldbaum, president of
the Biotechnology Industry Association, the trade group that represents nearly
1,000 biotech companies nationwide.
By far the biggest issue is Medicare
prescription benefits for senior citizens. US prescription drug spending rose
17.4 percent last year, with those over the age of 70 hit hardest, according to
pharmacy benefit manager Express Scripts of St. Louis. About half the increase
came from rising prices and half from greater use of prescription drugs, mostly
by seniors.
Biotech companies have maintained that today's drugs can
command a premium because they are more effective in helping patients avoid
heart attacks, strokes, and other major medical problems.
Consumer and
health care groups, however, contend that the drug companies, already the
nation's most profitable industry, raise prices unfairly. Families USA, a
nonprofit research group, reported the average wholesale price of 15 of the top
50 drugs used by the elderly to treat arthritis, diabetes, and related maladies
rose at more than three times the rate of inflation last year.
The
biotechnology and pharmaceutical industries have supported a Republican-backed
drug benefit plan that enlists private insurers, with some government backing,
to provide a voluntary prescription plan to Medicare beneficiaries.
The
Democrats want to cover prescription drugs as part of the existing Medicare
program for the elderly. That strategy would make Medicare the drug companies'
biggest customer with significant clout to negotiate huge discounts.
The
biotech industry argues that having Medicare dictate discounts is tantamount to
price controls - the industry's biggest fear. The alternative is giving seniors
what amounts to a voucher to purchase their drug benefits from a private insurer
or managed care provider. That would enable drug makers to negotiate with
multiple health care providers instead of a single powerful one, the federal
government.
Michael Astrue, chairman of the Massachusetts Biotechnology
Council, said the partisan squabbling and narrow division between Republicans
and Democrats in the House and Senate will make it hard for them to pass any new
prescription drug law. "Not impossible," Astrue said, "just difficult."
Congress might have an easier time approving an extention to the
Prescription Drug User Fee Act of 1997, which is due to expire in 2002. The law
streamlined how the US Food and Drug Administration approves drugs by having
biotechnology and pharmaceutical companies pay more to the FDA for each drug
application. In return, the companies saved time getting their proposed drugs
through the FDA regulatory process.
Since 1995, drug makers have paid
the FDA a total of $628 million, with some of the funds used to
hire more application reviewers and scientists. This money comes on top of the
FDA's annual federal budget appropriations.
Both the FDA and the
Pharmaceutical Research and Manufacturers of America, which represents the
nation's large drug companies, are expected to urge Congress to renew the law.
However, the biotech industry is planning to seek some additional reforms and
recently began surveying its members for suggestions.
One concern, said
Feldbaum, is that the FDA is losing talented people who leave for higher
salaries. Where do they go? To the biotech and pharmaceutical industries. "We've
become our own worst enemies hiring away their people," Feldbaum said.
Feldbaum also said he thought the chances were slim of new laws
requiring the labeling, and closer FDA monitoring, of genetically modified foods
sold in supermarkets and other shops.
However, consumer groups,
including the US Public Interest Research Group, are preparing to push for a
food safety and mandatory labeling law if the FDA does not change its policies.
The agency is reviewing a 1992 policy that defines genetically modified foods as
additives that are generally safe.
"If the FDA does not come back with
rules for mandatory labeling of genetically modified food, we would pursue a
strategy in Congress," said Richard Caplan, food safety advocate at US PIRG. He
cited the recent StarLink episode in which genetically modified corn approved as
animal feed was put into taco shells.
"We think the public is frustrated
with a lax FDA system," Caplan said. "So just as it took seven years to put
nutritional labels on food packaging, we think it might take less time to do the
same for labeling of biotech foods."
The FDA has previously stated that
it will make policy changes based on science and that, unless a biotech product
poses some risk to human health, it will not require labeling.
Lastly,
Congress will face legislation that would enable generic drug companies to
produce the equivalent of name brand biotech drugs once their patents expire.
Protein-based "biological drugs" were exempted from the 1984
Hatch-Waxman Act, which set patent terms to protect
chemical-based pharmaceuticals from generic equivalents. Back then, the biotech
industry was just starting out.
But with some patents on the first wave
of name-brand biotech drugs about to expire in the next five years, the makers
of generic pharmaceuticals are pushing to modify the law to include biologic
drugs. Generic drugs would be cheaper and impact sales of brand-name biotech
products.
The biotech industry has questioned whether a generic company
can develop equivalent protein-based drugs, citing the manufacturing complexity.
However, generic advocates note the precedent set by the generic drug companies
in producing safe and reliable pharmaceucticals for several decades.
GRAPHIC: PHOTO, GLOBE STAFF PHOTO/DOMINIC CHAVEZ /A
crowd in March (above) protesting the sale of genetically engineered food. Some
of the foods, like the ones shown below, that are possible to alter.
LOAD-DATE: November 22, 2000 
