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Health Reform and Follow-on Biologics

When FDA stakeholders discuss health reform, they usually focus on finance rather than regulation. They have strong interests in Medicaid rebates, formularies, adequate reimbursement to support innovation, and who is for/against the President’s plan. None of these finance issues affects FDA, although they will certainly have an impact on FDA-regulated industries.

Less often discussed in this larger debate is that some health reform bills include provisions that would alter or expand FDA’s responsibilities. The best known and most far-reaching provision would create a regulatory pathway for follow-on biologics (FOB). The fate of FOB, as well as other FDA provisions in the House Energy and Commerce and Senate HELP bills, will be determined by how health reform unfolds this fall.

This Wednesday night (September 9), the President will address Congress, hoping to create a working majority for a set of initiatives that will add up to health reform.

The President has several options. He can find a way to pull together Democratic ranks by bridging liberal and conservative demands. He can warn Democrats of the potential political consequences if they can’t pass health reform. These seem to be his likely direction based on this morning’s New York Times.

Alternatively or in addition, he can add in a “game-changer,” a new proposal that shifts alliances. Former Senator Bill Bradley suggested one yesterday in a NY Times opinion editorial: medical malpractice and tort reform. Arguably, this would appeal to some Republicans and conservative Democrats and expand and intensify support from within the medical and hospital communities.

Finally, he can narrow the scope of health reform, accepting that some steps toward his goals are better than none. Artfully played, this can be turned into a victory rather than a defeat.

The fate of FOB legislation depends on whether President Obama chooses a successful strategy in his speech to Congress and, ultimately, can guide health care reform into law.

Without enactment of health reform, the biotech industry-backed FOB legislation must be considered dead for this year and, maybe, for this Congress. Short of an equally-compelling, must-pass health vehicle, House Energy and Commerce Committee Chairman Henry Waxman will not give Representative Anna Eshoo a second chance to offer her amendment on follow-on biologics. Any future action on FOB will require Waxman’s imprimatur.

The Senate situation is likely to be much the same. If FOB is not in the final health reform bill, the likelihood of reviving the Senate FOB compromise–without Senator Ted Kennedy–must be considered slim.

The fate of FOB becomes uncertain if the President calls for narrowing the scope of health reform. Presumably, a slimmed-down health reform bill will be tailored to be in budgetary balance and to provoke minimal controversy. It might be hard to argue that the reform package requires the quite modest cost savings associated with FOB. Further, with AARP and Congressman Waxman as opponents, FOB will probably not be considered non-controversial.

If a large part of the biotechnology industry is rooting for President Obama on Wednesday night, it should be no surprise.


Prior columns on follow-on biologics (FOB):

The Best Little Chess Game in Town

August 3rd, 2009

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. Read the rest of this entry »

Follow-on Biologics and the Dance of Legislation

July 5th, 2009

Political scientists love to watch the dance of legislation. FDA watchers are eager to see how thorny agency issues will be decided by Congress. Both will be fascinated by the latest moves and turns in Congressional consideration of legislation on follow-on biologics (FOB).

I can’t recollect an instance in which a House chairman faced such massive bipartisan opposition. But never count House Energy and Commerce (E&C) Committee Chairman Henry Waxman out. He has made a career of not having enough votes… and winning, anyway. Read the rest of this entry »

The Follow-on Biologics Market

June 23rd, 2009

Since the debate began several years ago, the policy and politics of follow-on biologics (FOB) have been driven by assumptions and projections of the anticipated market. In my opinion, there has been a lot of fuzzy thinking about what type of companies will be players and how they will position themselves. The Federal Trade Commission report, released last week, is just the latest illustration. Read the rest of this entry »

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