Among other things, the healthcare debate has revealed to a large audience that our attempts at shaping the drug market are a cats-cradle of contradictory regulation.  A short history: Academic scientists who research future drugs are well aware of the Bayh-Dole Act which, in 1980, enabled researchers to patent and profit from taxpayer-funded innovation.  It was a bold attempt to encourage the movement of ideas from universities into the marketplace, where they can benefit society.   Meanwhile, the same federal government, cognizant that patents are actually monopolies designed to boost drug prices, realized that this effect must be mitigated to keep healthcare costs down.  In 1984, the Hatch-Waxman Act enacted regulations to encourage generic-drug manufacturers (representing the competitive threat that patents were meant to address in the first place) to contest the original patents in court.  How would the government get generic manufacturers to challenge the brand-name patents?  By promising the generic manufacturer a second round of protection from competition in the event it wins the dispute.  Today the Federal Trade Commission releases its new report, complaining that brand-name and generic drug manufacturers have found a profitable loophole by entering into agreements to avoid fighting over patents in the first place.  The proposed remedy?  The FTC wants to enact new legislation, making these anticompetitive agreements (over patent monopolies) illegal.

In the midst of the healthcare debate, the skyrocketing cost of care–including the tens of thousands now spent on some medicines–is a constant target for complaints and solutions.  Responding to criticism of the particularly high cost of “biologic”, or biotech-based, drugs, a recent op-ed in the Hartford Courant insists that encouraging the manufacture of cheaper, generic versions of drugs is a dead end, short-sighted attempt to cut costs. According to this view, the cost of biologics justifies lengthy “data exclusivity” periods, during which time the  clinical test data generated by the original drug maker cannot be reused by generic companies:

For investors to risk the $1.4 billion it takes to bring a new medicine from concept to approved product, inventor companies must have at least 12 years of data exclusivity. Anything short of this will shortchange investors, who won’t be able to recoup their biotech investments, and will mean an end to investment in biotech.

The author of this opinion piece, Paul Pescatello, is president and CEO of Connecticut United for Research Excellence, an industry group and cheerleader for biotech in the Nutmeg State.  It’s certainly not surprising to hear an industry representative lobby against unfavorable regulations.  However, a visit to the CURE website will reveal that among its more high-profile members are the major research universities in Connecticut, both private (Yale, Trinity) and public (UConn, University of New Haven).  A number of towns (Branford, West Haven, Trumbull) and the state Department of Public Health are also on the rolls.

I understand the hopes, shared alike by local universities and municipalities, that biotech will reenergize Connecticut’s sagging industry and employment landscape.  The actual realization of a wealthy, well-educated workforce and lucrative industry may someday redeem the subsidies and other favors made to incentivize the growth of local biotech shops and drug manufacturers in CT.

However, is the dividing line between profit and public interest crossed when a lobby group that is sponsored in part by government and academia dives into a debate over healthcare and technology policy in the public forum?

Reasonable people disagree about the benefits society will reap from lengthy monopolies on biological drugs–for periods of a decade or more.  For instance, is it true that a certain, dozen-year period of drug exclusivity is required for firms to recoup their research?  After all, manufacturers of generic biological drugs will, in all likelihood, confront the same bevy of expensive safety and efficacy testing as the original producer.  In some cases, the sheer cost of reproducing the process for making a biologic treatment may make these inventions immune to the kind of generic versions that can be made of simpler, small-molecule based drugs (mainstream antibiotics and antidepressants, for instance).

In addition, the monopoly provided by government-guaranteed data exclusivity has nothing to do with the already decades-long patent protections that cover the inventions packaged into drugs.

Considering the enormous price that our society will likely pay for high-tech drugs in the coming decades, we should at least understand what kind of deal we’re getting with drug manufacturers as we negotiate the monopolies they’ll receive on the next generation of life-saving treatments.  It is in the interest of the university community, not to mention the Connecticut taxpayer, to keep industry lobbyists like CURE at arms length, at the very least, so that meaningful, two-sided debate can occur on the enormous issues of drug cost and healthcare reform.

N.B. To say that local industry groups like CURE are against the public interest is, of course, an unearned generalization.  CURE shows a promising ability to direct local industry dollars to education (and PR).  For example, check out the cool-looking BioBus, which would have satisfied both of my biggest childhood interests: (1) science and (2) large, diesel vehicles.