Drug Companies Threatening to Oppose Health Bill

By ALAN FRAM - Associated Press Writer

WASHINGTON -- The drug industry is threatening to end its support for President Barack Obama's health overhaul effort because of a rift with the administration over protecting brand-name biotech drugs from low-cost generic competitors.

In an e-mail obtained Friday by The Associated Press, the president of the Pharmaceutical Research and Manufacturers of America told the trade group's board members that "we could not support the bill" if the industry is given less than 12 years of competitive protection for the expensive products.

Obama and House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., are leading the drive to shorten that period, which proponents argue would be a boon to consumers.

"Please activate immediately all of your contacts," said the e-mail from Billy Tauzin, the group's president.

The pharmaceutical industry has been a crucial supporter of Obama's health effort, having spent many tens of millions of dollars on advertising and lobbying in support. Drug companies should profit from the millions of additional people who would be able to afford health coverage under the legislation.

The threat comes with White House officials and Democratic congressional leaders nearing an agreement on compromise legislation reshaping the nation's health care system.

With a deal so close, it was unclear whether the partnership between drugmakers and the administration was truly in jeopardy, or if the e-mail represented an effort by the industry to pressure the White House to drop its effort to shorten the period of competitive protection for biotech drugs.

Any compromise bill, though, will face a nail-biting trip through Congress, where Democrats got barely enough support when they pushed initial versions of the bill through the House and Senate. If the drug industry decided to pour money into advertising opposing the legislation, that could give some lawmakers second thoughts about supporting the bill.

Ken Johnson, a senior vice president of PhRMA, declined to comment on the e-mail. But in a written statement, he said, "Fair data protection of at least 12 years for new, innovative biologic medicines is critically important to the future of medical progress in America."

In a written statement, Waxman said the overhaul should be "to help struggling families, not to enrich the drug companies."

Last June, the industry agreed to actively support Obama's health overhaul in an agreement with the White House and Senate Finance Committee Chairman Max Baucus, D-Mont., to limit the cost to drugmakers to $80 billion over next decade.

But as Democrats craft their compromise health bill, they have begun looking for additional sources of revenue to pay for changes they are making. That has included pressing the drugmakers to contribute an additional $10 billion - another factor that might be part of PhRMA's decision to threaten to withdraw its support.

Biotech drugs, manufactured from live tissue, are a fast-growing share of sales for pharmaceutical companies worldwide and are seen as a pivotal part of that industry's future.

The House and Senate versions of the health legislation give biotech drugs 12 years of protection from generic competitors. Brand name companies say they need that period to recoup their investments in the products, which can be very expensive to develop.

The Obama administration has said seven years would be a reasonable compromise. Some lobbyists have said Waxman was pushing to reduce the 12 years to 10 years or less.

A lobbying war on the issue has kicked into high gear.

Among groups whose members are calling the White House and congressional leaders in support of the 12 years was the Massachusetts Biotechnology Council, representing about 350 biotech firms.

Massachusetts is where a Republican is threatening to capture the Senate seat long held by the late Sen. Edward Kennedy, D-Mass., in next Tuesday's special election. That could make Obama reluctant to support a policy that could anger employees of one of that state's most important industries.

Senior presidential adviser David Axelrod said that Massachusetts Gov. Deval Patrick called White House officials to raise concerns about shortening the products' protections, "but he did not tie it to the election at all."


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