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Will it Matter if Pharma Turns Against the Bill?

The pharmaceutical industry is now threatening to jettison the reform bill if Democrats decide to roll back the legislation's 12-year exclusivity period for biologic drugs, as Obama is pushing for in the final negotiations. The Wall Street Journal quotes a letter that PhRMA president Billy Tauzin sent out to the trade groups members:   

“Mr. Waxman is pushing hard, with the support of the President, to drop our 12-year FOB period down,” wrote Tauzin, referring to Rep. Henry Waxman, chairman of the Energy and Commerce Committee. “We are all letting everyone we know hear that we could not support the bill if this happens. Please activate immediately all of your contacts. Billy.”

The 12-year protection against generic competition had been a victory for the biologics arm of Big Pharma, who enlisted the support of Democratic legislators from states where the industry has made inroads. Industry lobbyists have argued that the drugs--which are made from living organisms and are being increasingly included in cancer treatments--cost many times more than conventional medicines to research and develop. But even the Federal Trade Commission has deemed that the 12-year provision is too long and could hurt consumers, prompting liberals like Waxman and Sherrod Brown to lobby for a much shorter 5-year window.

Obama's pushback against biologic exclusivity comes on the heels of the news that the Democratic leaders were planning to ask for $10 billion more from the industry, on top of the $80 billion deal it made with the White House and Baucus. As I wrote yesterday, such a figure is still light years away from the $150 billion that the House bill forces the industry to put on the table. And perhaps Obama is doing just that with his push to narrow the exclusivity window. Though it's still unclear exactly how far the leadership will go to close the window--Politico floated 10 years as one possibility--there huge money to be found in generic competition, as Ezra notes, potentially saving some $378 billion over two decades.