The following issue briefs have been endorsed by the Roundtable Legislative Committee:
Biodefense and Pandemic Vaccine and Drug Development Act of 2005 (Bioshield II)
S. 1873, Burr[Enzi]
In order to promote defense against bio-terrorism, some in Congress want to provide a substantial number of incentives for the development of drugs useful in preparing the nation against a biological attack. These incentives would include the granting of patent extensions in certain cases. However, such extensions could potentially be used for drugs that are not truly linked to protecting the nation from bio-terrorism, thereby substantially increasing overall pharmaceutical costs unnecessarily while failing to create incentives for truly innovative pharmaceutical breakthroughs.
Senator Richard Burr (R-NC) introduced S.1873 on October 17, 2005, and the bill was referred to the Senate Health, Education, Labor, and Pensions (HELP) Committee. The Committee considered the measure seven days later, during which time Chairman Michael Enzi (R-WY) made some substantial changes to the bill before committee approval. The full Senate has yet to consider the legislation.
The bill establishes the Biomedical Advanced Research and Development Agency (BARDA) under the Department of Health and Human Services (HHS) to oversee research and development of "qualified countermeasure" drugs considered useful in fighting a terrorist attack using biochemical agents, with the terms defined very broadly. The legislation protects manufacturers from liability arising from these drugs, regardless of whether the damage occurred from use during an emergency. In addition, such drugs would enjoy an increase in patent protection by seven to ten years.
Criticism has come from the vagueness of the term "qualified countermeasure" and the effects that designation will have on drugs which have other medical purposes other than fighting a biological attack. According to the Generic Pharmaceutical Association, the language is so loose that common drugs to treat headaches and nausea fall into the definition.
- The Roundtable opposes the patent extension provisions of S. 1873 as currently written because they gratuitously raise costs for Federal, State, and local providers of drug coverage while providing little real assistance in the fight against terrorism. While the Roundtable supports protecting the nation from biological attack, it does not support measures that use such an important national goal to unnecessarily extend patent exclusivity blindly across a swath of existing products to reward companies for developing products researched and paid for long ago. We instead believe it is time for the public to enjoy cost savings on these products by releasing them for generic license.
- The Roundtable believes that any new initiatives in this area, such as the Biomedical Advanced Research and Development Agency (BARDA), must not have the effect of reducing funding for other important Federal programs that support pharmaceutical research and development. It is expected that BARDA's first year funding could exceed $1 billion. Some concerns have been raised that, given the ever-increasing restraints on Federal discretionary spending, the result could be a reduction in funds for other important agencies such as the Centers for Disease Control (CDC) and the National Institutes of Health (NIH). The Roundtable would oppose reductions in existing funding that could serve to impair innovative pharmaceutical research and otherwise unduly diminish ongoing programs aimed at improving healthcare quality.
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Health Technology and Quality
S. 1418/Enzi-Kennedy, S. 1262/Frist-Clinton
One of the few areas of bipartisan agreement in the search to reduce healthcare costs is the potential for better health information technology (Health IT) to bring needed efficiency to the market without compromising patient privacy or quality of care. Health IT refers to the technology used to collect, store, retrieve, and transfer clinical, administrative, and financial health information electronically. Unfortunately, much of today's health care system has remained relatively untouched by the technological innovations which have benefited other industries, leaving a health system where patient records and prescription needs remain predominantly maintained in paper files. The irreparable loss of these records is one of the most significant, though less heralded costs of hurricane Katrina.
Without a system of data standardization among providers, the ability of participants in the system to effectively share data will continue to be difficult if not impossible to achieve. This fragmentation wastes time, money, and results in lives lost to treatment errors. According to some studies, the widespread adoption of health information technology could save more than $81 billion a year in healthcare costs as well as greatly improve the overall quality of patient care.
Senators Bill Frist (R-TN) and Hillary Clinton (D-NY) introduced the Health Technology to Enhance Quality Act of 2005 (S.1262) on June 16, 2005, which was referred to the Senate Health, Education, Labor, and Pensions (HELP) Committee. This legislation was incorporated into S. 1418, the Wired for Health Care Quality Act, a bipartisan effort by HELP Committee Chairman Michael Enzi (R-WY) and Ranking Member Edward Kennedy (D-MA). S. 1418 was unanimously adopted by the Senate on November 18, 2005.
- We urge the Congress to adopt legislation such as S. 1418 that fosters the development of a health information infrastructure, the adoption of clinical information systems, and the implementation of payment policies to reward health care of high quality and value in the Medicare program and throughout the US health care system as a whole. The Roundtable supports the goals of S. 1418 to reduce costs and improve services through modernizing and integrating the health care system with improved health information technology. Technological improvements are one of the few areas of little disagreement in the healthcare reform debate, with the potential to quickly produce savings for all consumers.
- We support the codification of the Office of National Coordinator of Health Information Technology within the Department of Health and Human Services to develop needed standards. As regulator, purchaser and health care provider to approximately 115 million Americans, and sponsor of health research, education, and training, the Federal government has an inescapable leadership role to play in promoting uniformity of health care quality measures and data standardization. Creating a permanent office within HHS to pursue these goals enhances responsibility, authority, and accountability in their development and implementation.
- The diverse healthcare community needs Federal leadership to provide guidelines for interoperability. Efforts to increase the use of Health IT should include measurable, interoperable reporting standards and enhancements, and should be adequately and fully funded. Creation of these standards through public channels provides the best guarantee that the system that is ultimately developed will have as its chief focus improvements in quality, safety, and transparency, with administrative and efficiency savings flowing from those goals.
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Generic Drug Availability
S. 2300, Stabenow/Lott
Generic drugs greatly reduce costs to consumers and have played a key role in recent efforts at cost containment by health benefit plans. For example, it is estimated that for every one-percent increase in the use of generic drugs, which cost anywhere from 30% to 80% less than name-brand pharmaceuticals, consumers could save $4 billion annually.
Initiatives that expand the appropriate use of cost effective, quality generic drugs should be supported. However, there is conflict over the availability of generic drugs caused by the desire to balance the need for more affordable generics with the need for brand-name drug manufacturers to make reasonable profits on risky drug development research. This is accomplished by granting exclusive rights to produce new drugs through patent protection for a given term. Drug creators have developed a variety of techniques to extend their monopoly beyond the span envisioned, including sometimes questionable appeals of new generic applications for existing medicines, or proposing to examine the potential use of an existing drug for children when such use is highly unlikely. The brand name drug makers have also increasingly resorted to simply paying generic drug manufacturers to not produce lower cost versions of profitable brand name drugs, a process thus far upheld as legal but nonetheless under scrutiny from the Federal Trade Commission.
Senator Debbie Stabenow (D-MI) introduced the Lower PRICED Drugs Act, S.2300, on February 16, 2006, with former Majority Leader Trent Lott (R-MS) as an original cosponsor. The bill was referred to the Senate Health, Education, Labor, and Pensions (HELP) Committee, which has taken no further action on the measure. Congressman Henry Waxman (D-CA) intends to introduce a companion measure in the House of Representatives in the near future.
- The Roundtable fully supports reforming the patent appeal process. Brand name drug makers that challenge a generic company's claims before the Food and Drug Administration almost always enjoy the full 30 month stay allowed under law, adding two and half years to their monopoly rights. S. 2300 would encourage the courts to swiftly dismiss challenges without merit.
- The Roundtable supports closing loopholes that deny the public access to cheaper generic drugs by means of frivolous delays. Too often, pediatric marketing extensions are sought for products not suitable for children. This only serves to keep lower-cost generic alternatives of drugs for adults off the market rather than helping to learn more about drugs for children. The Stabenow-Lott legislation affirms that the pediatric exception can only be used for pediatric products.
- The Roundtable supports efforts to include antibiotics in the modern patent exclusivity rules used for other drugs. A technicality precludes certain antibiotics licensed before November 12, 1997, from eligibility for generic manufacturing. S. 2300 allows these treatments to enter the register of drugs that can be made generically.
For more information contact:
Public Sector HealthCare Roundtable
c/o Lussier, Gregor, Vienna & Associates
100 North Pitt Street, Suite 403
Alexandria, VA 22314
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