Seven Years is Enough Monopoly Protection for Biotech Drugs, White House Says
The makers of brand-name biotechnology drugs should be shielded from competition from cheaper generic versions of the drugs for seven years but no longer, White House officials say.
Drug companies invest millions of dollars to research, develop, and market biotech drugs, which are used to treat diseases including cancer, HIV/AIDS, Alzheimer’s disease, and rheumatoid arthritis and are more expensive to produce than other types of drugs. Brand-name biotech drugs also are more expensive for consumers and prescriptions can cost tens of thousands of dollars a year.
The makers of brand-name biotech drugs want to be protected from generic competition for 12 to 14 years and say giving them a corner on the market for that period of time rewards their investment in developing the drugs. However, consumers tired of paying more for brand-name drugs and yearning for less-expensive generic versions disagree and want generics available sooner.
FTC Backs Shortening Protection
Recently, the Federal Trade Commission said cutting the time before generic biotech drugs are available would save healthcare programs and consumers billions of dollars each year. The 12- to 14-year period the drug companies want is too long, the FTC said.
Now, White House officials have weighed in on the debate and said that seven years of protection from generic competition “strikes the appropriate balance between innovation and competition.”
“Innovation is driven by appropriate competition, and the administration’s policy will spur that competition,” Office of Management and Budget Director Peter Orszag and Nancy-Ann DeParle, director of the Office of Health Reform said in a letter to Rep. Henry Waxman (D-Cal.).
Waxman, the chairman of the House of Representatives Energy and Commerce Committee, plans to propose legislation that would give makers of brand-name biotech drugs five years of protection from generic rivals.
Obama Supports Shorter Time
Waxman said the administration of President Barack Obama “has made clear that the president does not support the lengthy monopoly periods sought by the drug industry and instead wants a bill, as I do, that will bring real competition and will not unduly prolong the monopolies on biotech drugs.”
Not surprisingly, the news was not greeted with smiles and applause among drug companies that manufacture biotech drugs.
Officials with the Biotechnology Industry Organization said they are “extremely concerned” that seven years is not long enough to shield the companies from cheaper generic competition. BIO President Jim Greenwood called the move to reduce monopoly protection a “risky short cut,” according to a Reuters report.
“We believe this abbreviated period will undermine the incentives necessary for continued biotech research into breakthrough medicines and cures for diseases such as cancer, multiple sclerosis, Alzheimer’s and HIV/AIDS as well as unmet medical needs,” Greenwood said.
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