Biotech firms lobby for say on healthcare

$66m effort to protect drug-patent exclusivity

By Lisa Wangsness
Globe Staff / July 21, 2009

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WASHINGTON - The 46 million Americans without health insurance are probably not spending much time thinking about how Congress should curb monopolies on expensive biotech drugs. But the issue, which offers a case study in the ways of Washington influence, is among dozens that have spurred a lobbying frenzy this summer as Congress debates a historic healthcare overhaul.

Biotech firms, big pharmaceutical companies, hospitals, doctors, and players from every corner of the US healthcare industry are working hard to protect profits, as the government seeks ways to hold down the cost of expanding health insurance to all Americans.

Pharmaceutical interests alone, including many from Massachusetts, spent more than $66 million on lobbying in just the first quarter of this year, up 25 percent from last year, according to the nonpartisan Center for Responsive Politics. Drug companies accounted for more than half of all healthcare lobbying.

“They are on pace to obliterate their total lobbying expenditures from any other previ ous year,’’ said Dave Levinthal, the center’s communications director.

The intense effort by biopharmaceutical companies that are clustered in Cambridge and Boston, as well as California and a few other places around the country, provides an example of how these battles have kicked into overdrive.

Biotech firms produce the most expensive drugs on the market, charging $10,000 to $100,000 a year for a single patient, and generics would seriously undercut those prices. In their quest to win a 12-year exclusivity period for their drugs, free from such competition, biotech companies have launched a massive education campaign about what they say are the sky-high research and development costs involved with bringing them to market.

To help carry the message, they are paying well-connected lobbying firms, sponsoring radio ads as well as academic studies, and contributing to the campaign coffers of influential lawmakers.

“You get one crack at it,’’ said Robert Coughlin, president of the Massachusetts Biotechnology Council, speaking of the task of drawing up a licensing system for “biogenerics.’’ “If it isn’t done right, it could literally put the biotech industry out of business.’’

The quest for influence is not always obvious.

Howard Dean, the former Democratic Party chairman, wrote an opinion piece this month in The Hill, an influential Capitol Hill newspaper, arguing that fewer than 12 years of monopoly rights for biotech companies’ products “would prematurely rob innovators of their intellectual property and . . . destroy incentives to develop new cures.’’

Within hours Joe Trippi, a Democratic consultant who ran Dean’s 2004 presidential race, hyped Dean’s opinion piece in a blog post that he sent to The Huffington Post, a widely read website. “He’s a doctor and lifelong advocate for health reform - he knows what he’s talking about,’’ Trippi wrote, urging readers to contact their lawmakers.

Dean failed to note in his editorial that he is an adviser to McKenna, Long & Aldridge, a global law firm that is advising the Biotechnology Industry Organization, the influential trade group. Nor did Trippi mention that his public relations firm handles social media projects in a partnership with the Boston public relations company Brodeur Partners, which also has BIO as a client.

After the Globe inquired about those ties, both Dean and Trippi said they only advocate for causes they genuinely support, but said they should have disclosed those relationships and would do so in the future.

Trippi, who suffers from serious complications of diabetes, noted that he has advocated for biotech for years. But Dean said his editorial was part of McKenna’s rapid-fire response to an unexpected, eleventh-hour Senate health committee proposal (which biotech firms ultimately fought off).

“It was a huge scramble, all hands on deck,’’ Dean said.

For years, the Food and Drug Administration has debated ways to license lower-cost copies of biotech drugs, a move that would slow the acceleration of drug costs and contribute to healthcare savings across the country. But the biotech industry is relatively new, and its drugs are far more complex and difficult to produce than traditional pharmaceuticals, complicating the process. With President Obama and Democratic leaders in Congress intent on reforming healthcare this year, momentum has built to set up a regulatory pathway for “biogenerics.’’

The big question for Congress is how long companies should get exclusive rights to their products before the generics can move in and compete. While industry argues it needs a long monopoly period to recover its research and development costs, the generic-drug industry, labor groups, employers, and the powerful AARP say the system needs cheaper alternatives quickly.

The legions of lobbyists, strategists, and legal consultants involved include former senior aides to key lawmakers and executives. Top biotech companies are clients of Foley Hoag, a law firm with offices in Boston and Washington, which has deployed Nick Littlefield, former staff director and chief counsel for Senator Edward M. Kennedy’s health committee, and Paul Kim, the former deputy health counsel to the Kennedy’s committee.

On the other side, the AARP, representing America’s elderly, spent more than $4 million on lobbying in the first quarter and also ran radio ads. Chris Jennings, a former senior health policy adviser to former president Bill Clinton, is advising drug benefits managers, which also favor lower costs.

Biotech won a major battle last week when Kennedy’s Senate health committee gave biotech firms the 12-year protections they wanted, plus six months for pediatric versions. The committee rejected a proposal by Senator Sherrod Brown, Democrat of Ohio, for a much shorter monopoly period. After the vote, generics companies said they wouldn’t even bother trying to make generic biologics because the 12-year protection would make the enterprise unprofitable.

“The pharmaceutical industry, especially the biotech industry has an awful lot of power in the halls of Congress,’’ Brown told reporters. The battle now moves to the House.

The debate does not break down along the usual partisan lines. Biotech is seen as the economic future in Massachusetts, California, and other blue states, creating high-paying jobs and supporting desirable industries like higher education and medicine.

State leaders from around the country, including Governor Deval Patrick, wrote letters to their delegations supporting a biotech-friendly bill. CEOs have flown to Washington to drive their points home. The Globe reported earlier this year that Amgen donated $1 million to the Edward M. Kennedy Institute for the United States Senate at the University of Massachusetts Boston, a project being developed by people close to the senator but not Kennedy.

“For nearly 50 years, Senator Kennedy has been fighting to provide all Americans, regardless of race, gender, or income, with access to quality, affordable healthcare,’’ Kennedy’s spokesman said in a statement. “Every decision he makes on health policy is designed to further that important national goal.’’

In the health committee vote last week, a number of other left-leaning Democratic senators sided with the industry, including Patty Murray of Washington, Barbara Mikulski of Maryland, Jack Reed and Sheldon Whitehouse of Rhode Island, and Kay Hagan of North Carolina. Kennedy supported the measure by proxy.

Hagan, a freshman senator whose state is home to a biotech sector, was assigned to the health committee this winter. Few were surprised when she cosponsored the industry-friendly amendment. But biotech firms were not taking chances: In the first half of this year, they poured $16,000 into her campaign account. Hagan believes the protections are necessary to support research for new drugs.

“Without the 12-year protection, these jobs could be shifted overseas,’’ Hagan said in a statement to the Globe.

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