Michael Hiltzik: Biomedicine and generic drugs
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Striking the proper balance between incentives for innovation and encouragement of competition has been an issue for lawmakers since the patent system was first devised.
As my column for Thursday observes, Sen. Orrin G. Hatch (R-Utah) and Rep Henry A. Waxman (D-Beverly Hills) achieved this beyond their wildest expectations with the Hatch-Waxman Act of 1984, which traded off an extension of patent rights for pharmaceutical companies against an accelerated approval process for generic equivalents. The measure virtually created the generics business, saving consumers billions, without cutting into Big Pharma’s revenues or profits.
The big loophole in Hatch-Waxman is biomedical drugs, which were an insignificant industry in 1984 but increasingly look like the future of medicine now. That oversight has given the biotech industry an opening for a new balance -- not five years of extended patent protection but 12, renewable (according to the generics lobby) almost infinitely. Will Congress again strike a worthwhile balance? The answer lies in the healthcare reform bills now in Congress.
The column begins below.
The debate over healthcare reform is focused on such a small number of hot issues — should there be a public option, Medicare buy-in, government-paid mental health counseling for Sen. Lieberman? — that dozens of other questions are cruising under the radar. Here’s one worth a lot more attention than it has been getting: Is Congress poised to make a big payoff to biotech firms and their venture backers by hindering the entry of a new class of generic drugs into the marketplace? That’s the rap on an amendment sponsored in the House reform bill by Democratic Rep. Anna G. Eshoo, whose Palo Alto district is home to gangs of venture capitalists. (Matching language is in the Senate bill.)