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How Pharma Won

Time's Karen Tumulty and Michael Scherer have a thoroughly enlightening, and thoroughly depressing, article in the new Time about how the drug industry got its way in health care reform. The industry spends more than $600,000 a day in lobbying, they note. And, from the looks of things, it's money well spent.

The focus of the article is the debate over "exclusivity" for biological drugs--that is, the period during which the maker of a drug can manufacture and sell it without threat of generic competition. Reformers, like Representative Henry Waxman, had been pushing to cut the exclusivity period down to five years. The industry wanted twelve. Guess who won?

The power of special interests is an old story, of course. But the reach of pharma's influence is still something to behold, as it goes well beyond the usual game of campaign contributions and revolving door connections:

In July, one calling itself the National Health Council wrote letters to members of Congress "on behalf of 133 million Americans" asking for a minimum of 10 years of data exclusivity. The group boasts a membership that includes 50 of the nation's largest patient-advocacy groups, including the American Cancer Society, Easter Seals and the National Kidney Foundation. But its board of directors reads like a Who's Who of top pharmaceutical executives from Amgen, Pfizer, Novartis and Bristol Myers Squibb. Its 2007 tax filings show that almost half its $2.3 million budget came from PhRMA and drug companies.

Similarly, on Oct. 19, PhRMA put out a statement calling for a "fair period of data protection" of 12 years at a "bare minimum." To defend its position, the group cited Duke University economist Henry Grabowski, whose work it has funded, and two patient groups. One, called RetireSafe, receives regular infusions of "general operating support" from Pfizer and operates out of a small Washington law-firm office. It has been blitzing Capitol Hill with letters arguing that guaranteeing biologics makers fewer than 12 years of exclusivity in the use of their data could cost lives. The other group, the Alliance of Aging Research, is also run by the drug industry. Its chairman is the managing partner of Foxkiser, a drug-company consultant, and its vice chairman is with Novartis.

And lest you think it's just conservatives who are on the industry's side:

Among the biologics industry's most high-profile advocates has been former Democratic National Committee chairman Howard Dean, who is consulting for a law firm that has a deep roster of biologics clients. In July he wrote an Op-Ed in the Hill newspaper arguing for a "commonsense and fair approach" to give biologics companies at least 12 years of exclusivity. ("I wouldn't do this if I didn't believe it," Dean, a physician, said in an interview.) His former campaign manager Joe Trippi echoed Dean's views on a Huffington Post blog without disclosing that he had been paid by BIO to create two Web campaigns. (He also says his views predated his paycheck.)

Dean, like the industry, argues that a long exclusivity period is essential to promote innovation. But Tumulty and Scherer point out some problems with that argument, as well:

The Federal Trade Commission (FTC), though, argued in June that giving biologics makers any period of exclusivity at all could actually stifle innovation. Biologics are so much more complex and expensive to produce than traditional drugs that the barriers to would-be "biosimilar" competitors are already high, the FTC said. Giving biologics further protection — particularly the 12 years of exclusivity that the industry wants — would merely encourage firms to tinker with what they have rather than drive them toward "new inventions to address unmet medical needs."

Read it and weep.