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The Best Little Chess Game in Town

One of the reigning champions of political chess, Representative Henry Waxman, has found himself in an endgame on follow-on biologics (FOB). His three decades of success have been built on extraordinary mastery of Congressional procedure, artful compromise and strategic alliances. His defeat seems unavoidable, but no one should assume that he can’t yet win or draw this game.

His opponents—Representatives Eshoo and Barton, backed by former Representative Greenwood, who is head of the biotechnology trade group, BIO—have also played a masterly game. Their strategy of overwhelming numbers has made them an irresistible force, sufficient to overcome Waxman’s mid-game strategy of becoming an immovable object.

The chess game is being fought over the creation of a pathway for regulatory approval of FOBs, biological “copies” that are similar to an innovator drug. While there are dozens of issues, the critical difference between the Waxman and Eshoo bills is how soon FOBs can rely on the clinical data from the innovator, rather than do expensive trials themselves. In Waxman’s eyes, the innovator’s data exclusivity should be 5 years, while Eshoo and Barton favor at least 12 years.

Interestingly, Waxman’s position has grown weaker despite a Democratic president and larger Democratic majorities in Congress. This was not what he expected when he adjourned the game last Fall, expecting to have a stronger position in January.

Instead, Eshoo garnered a remarkable 142 bi-partisan co-sponsors this year, gained a working majority for her bill in the House Energy and Commerce Committee. In the face of this, Waxman’s strategy has been to play for time—avoiding a committee vote this year, and then working for a “split the difference” compromise in conference with the Senate on health care reform.

The showdown occurred this past Friday (July 31). An Eshoo amendment was successful, 47 to 11, and FOB is now part of the health reform package in the House. With changes Representative Eshoo made in her language, the House and Senate versions are not much different, and both opt for 12 years of data exclusivity.

Chairman Waxman still has options. It is possible that FOB’s will not emerge from the melding of the three different House committee versions. It is possible that the House leadership will help him keep FOBs out of the final legislation when it is considered by the House. Perhaps he and Senator Kennedy (who has wavered in his support for the 12-year exclusivity in the Senate compromise bill) will be able to appoint enough conferees who would support compromising two similar bills into one with fewer years of data exclusivity.

Given the overwhelming support in the House for Eshoo’s bill, it would seem that Representative Waxman cannot prevail. However, it is not in the nature of committee chairmen to accept defeat. Henry Waxman is no exception. My advice to the biopharma industry: save any victory celebrations until the chairman has run out of options and concedes the game. It may take longer to get there than you expect.


PS. I have written twice before on follow-on biologics:

  • June 23 on the nature of the FOB marketplace and the failure of the FTC’s analysis to capture the market dynamics that will exist 10 years after enactment. It is at: http://www.fdamatters.com/?p=338.
  • July 5 about the politics of FOBs and predicted a fascinating summer as legislation moved forward. It is at: http://www.fdamatters.com/?p=358.

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