The state is in deep trouble, and lawmakers need to get serious. Unfortunately, proposals like this one and comments like those made by Democrat Assemblyman Noreen Evans (below) don’t provide much reason for hope. California Democrats don’t seem to be getting the message.
The letter is significant to the discussion of how to create a regulatory pathway for the introduction of follow-on biologics, or biosimilars, which are drugs similar to a brand name biologic and are introduced when the brand name patent expires. Some key issues include protection of brand name product data and the exclusivity period for a brand name product.
The Hatch-Waxman Act of 1984 created a pathway for generic drug entry in the traditional pharmaceutical market. Hatch-Waxman allows up to fourteen years of market exclusivity (five years data exclusivity for new chemical entities) for pharmaceuticals to recover development costs, which average around $1 billion these days (recent estimates range from $500 million to more than $2 billion).
The White House recommendation of only seven years (data exclusivity) for biologics would undercut innovation by making it even less likely that a biologic would recover research and development costs. The BIO organization, which represents many biotechnology companies, issued this statement in response to the White House letter and this rebuttal of the FTC report.
Last week, the FTC also issued a report on authorized generic drugs, which are generics authorized by brand name manufacturers when a patent expires. The report painted authorized generics in a bad light, and was particularly critical of the use of pay-for-delay patent settlements, in which a generic may delay market entry in return for the brand name manufacturer not authorizing a generic or for financial compensation. Courts have thus far upheld the legality of such settlements.
Legislation that would ban manufacturers from releasing authorized generics has already been introduced (House and Senate versions). The FTC report shows that competition from authorized generics lowers overall drug costs during the 180-day exclusivity period for generics. PhRMA issued a statement in response to the FTC report, defending authorized generics and patent settlements.
Lawmakers need to be careful in how they interpret data from these reports. The goal should be to maximize access to the best products at the best prices, but undermining patent settlements and limiting exclusivity for products that are very expensive to develop will undermine innovation and threaten the development of new life saving medicine.
DISCLOSURE: My employer is a drug and device manufacturer who is a member of both BIO and PhRMA.
Every product, from a jelly doughnut to a jumbo jet, is rationed — by price or by politics. The conservative’s task is to explain why price is preferable. The answer is that prices produce a rational allocation of scarce resources.
Elections have consequences. One example is a reckless House of Representatives irresponsibly pushing through a disastrous 1200 page piece of legislation that no one has likely read and that will affect the entire world economy. This occurred during a time of heavy debates on several important issues. Yesterday’s cap and trade charade was embarrassing and unprofessional, and those who voted for the bill should be ashamed.
The addition of 300 pages early Friday morning by Henry Waxman (who has been quite busy these days) highlights the irresponsibility of those who voted for the bill that same day. House minority leader John Boehner tried to draw attention to the absurdity of voting for the unread bill by using his floor time to read from it. Henry Waxman then asked if “any historical records would be broken” by Boehner reading his bill, apparently missing the irony of his own question. Waxman must think it’s unnecessary to actually read legislation with global economic impact.
President Obama was prepared to talk about some key issues and he did answer some good questions. Many people outside of the ones who asked questions, however, may not be completely familiar with some of the specifics that were discussed and Obama is hoping that those voters will trust him because of how he is able to speak about these issues. But the real focus should be on what he says, not how he says it. That is why it’s essential to look at what he did and didn’t say last night.
One point important to note is the implication of rationing. Obama started off with a story about his grandmother needing a hip replacement:
As some of you know, my grandmother recently passed away, which was a very painful thing for me. She’s somebody who helped raise me. But she’s somebody who contracted what was diagnosed as terminal cancer. There was unanimity about that. They expected that she’d have six to nine months to live. She fell and broke her hip. And then the question was, does she get hip replacement surgery, even though she was fragile enough that they weren’t sure how long she would last, whether she could get through the surgery.
I think families all across America are going through decisions like that all the time. And you’re absolutely right that, if it’s my family member, it’s my wife, if it’s my children, if it’s my grandmother, I always want them to get the very best care.
But here’s the problem that we have in our current health care system, is that there is a whole bunch of care that’s being provided that every study, every bit of evidence that we have indicates may not be making us healthier.
If President Obama’s lack of action regarding the situation in Iran isn’t satisfying you, refresh your memory of what Reagan said about Poland when the Polish government declared martial law to stop the opposition to communism.
Democrats in the White House and in Congress have been misleading about the idea of taxing health benefits. It didn’t start with the current legislative debate, however, as Obama ran misleading ads like the one below in swing states during the campaign.
Barack Obama criticized John McCain’s plan to move tax benefits from employers to the individual as a tax on health benefits. This was a clever but dishonest criticism, and one that had many people concerned.
Now, as President Obama is considering taxing health benefits to pay for a massive government overhaul of healthcare, Democrats are trying to address fears of taxing health benefits by accusing Republicans, mainly John McCain, of proposing the same idea. Take this explanation by Press Secretary Robert Gibbs:
“If I’m not mistaken, I can think of at least one Republican off the top of my head that talked about changing the tax benefits for the exclusion,” White House Press Secretary Robert Gibbs said at his daily press briefing on Friday. “I think if I sat at Google for about five minutes I could probably get you several dozen. I think one of the major reform bills that’s up there right now that’s been written by Sen. [Richard] Burr (R-N.C.) includes, if not a complete ending of the exclusion, some cap of it.”
Robert Gibbs is not talking about simply “changing the tax benefits for the exclusion.” Gibbs is trying to make giving the benefits to the individual sound the same as taking away the benefits from the employer, and he knows the difference. This is blatant dishonesty and should be called out accordingly. I take accusations of dishonesty seriously because they imply that someone willingly and knowingly distorts the truth. Unfortunately, this is one of those instances.
What John McCain wanted to do, as others like Burr have proposed, is to replace the employer tax benefit for health insurance with a tax credit for individuals. Individuals would then assume more of the cost, but the idea is that the increase in cost to the consumer would be offset by the tax credit and an increase in wages that employers would have incentive to pay.
What Obama and the Democrats want to do is tax health benefits and offer no offset, increasing the burden of consumers and employers. This is not a way to decrease health insurance costs, but a way to pay for a government initiative. This idea also would also have the additional effect, when combined with a public option, of pressuring consumers to leave an increasingly expensive private insurance plan for the government plan.
Shifting the tax benefit onto the individual will allow consumers to untie their insurance from their job, will make more options reasonable for consumers, and will likely motivate the consumer to be more conscientious of the costs. Simply taxing the benefits, however, will lead employers to drop private coverage and will crowd out the private insurance market.
The puzzle is: Why does the president, who says that were America “starting from scratch” he would favor a “single-payer” — government-run — system, insist that health care reform include a government insurance plan that competes with private insurers? The simplest answer is that such a plan will lead to a single-payer system.
Mark Steyn, Rich Lowry, and Victor Davis Hanson all have excellent pieces up at National Review regarding President Obama’s handling of the situation in Iran. Read each of them.
The notion that America has been evil in the past and therefore shouldn’t intervene is also in line with the implied moral equivalencies in Obama’s Cairo speech. It is that same “on the one hand, and on the other” comparison: America has done something bad, so we have no right to call out someone else who is doing wrong.
[T]his incipient revolution is no longer about the election. Obama totally misses the point. The election allowed the political space and provided the spark for the eruption of anti-regime fervor that has been simmering for years and awaiting its moment. But people aren’t dying in the street because they want a recount of hanging chads in suburban Isfahan. They want to bring down the tyrannical, misogynist, corrupt theocracy that has imposed itself with the very baton-wielding goons that today attack the demonstrators.
Krauthammer hits the nail on the head when he considers our values: “And our fundamental values demand that America stand with demonstrators opposing a regime that is the antithesis of all we believe.” Not knowing or not believing in our values makes it difficult to oppose those who threaten them.
