Washington Editor

ARLINGTON, Va. - The health care reform bill scheduled to be voted on Sunday by the House may not completely be what the pharmaceutical industry was seeking, said David Brennan, CEO of AstraZeneca plc.

"But it will be a giant step," he said at the annual meeting of the Pharmaceutical Research and Manufacturers of America (PhRMA).

And while President Obama may not have wanted to take the incremental approach to reforming health care, "there will no doubt be a need to improve" on whatever legislation does come out of Congress, said Brennan, PhRMA's outgoing chairman.

The House vote got the go ahead after the Congressional Budget Office Thursday morning gave a cost estimate of $940 billion over 10 years, while trimming the federal deficit by $130 billion in the first 10 years and $1.2 trillion in the following decade.

The reconciliation package unveiled by Democratic leaders Thursday includes several changes to the Senate legislation.

To ensure the reconciliation package would meet congressional rules, a measure was dropped seeking a ban on so-called pay-for-delay deals, settlements in which pharmaceutical firms pay generic drugmakers to keep their products off the market for a period of time.

The Federal Trade Commission had long-backed enactment of the ban, arguing that stopping such deals could save consumers $3.5 billion per year and $12 billion over 10 years. (See BioWorld Today, Oct. 19, 2009, and Jan. 15, 2010.)

But Kathleen Jaeger, CEO of the generic drug industry trade group, argued that the patent settlements actually allowed generic competitors to enter the market sooner than if the makers of those products had taken the case to its conclusion and lost, which she said was "always a possibility in patent litigation."

"Sweeping the good settlements out with the bad settlements is simply bad health policy and a misguided approach to cost containment," Jaeger contended. An across-the-board ban "would reduce the number of patent challenges brought by generics, creating an unnecessary hurdle to bringing lower cost generic drugs to the market," she said in a statement.

Sen. Herb Kohl (D-Wis.), who sponsored the Senate's measure, has vowed to continue his fight to get the pay-for-delay ban passed later this year separately from the health reform legislation.

The fight against the pay-for-delay ban was one area the Generic Pharmaceutical Association agreed with PhRMA, with the two trade groups on opposite ends of the spectrum when it comes to the follow-on biologics debate over the number of years of data exclusivity.

"GPhA remains deeply concerned that the legislation missed the opportunity to inject real pharmaceutical cost containment into the U.S. health care system by failing to provide a biogenerics pathway with market exclusivity provisions that would have provided patients with timely access to life-saving medicines," Jaeger said Thursday.

While PhRMA and GPhA remain foes on FOBs, Brennan said his group formed unlikely partnerships over the past year in support of health reform.

"You can say we looked at potential allies in a new way," he said. "With our allies, we coalesced around the fact that the status quo was unacceptable and unsustainable."

Partnering to get health reform passed, Brennan said, was an approach that "increased our value as a partner."

Billy Tauzin, who is stepping down as CEO at PhRMA in June, noted that his group sought to no longer be a "one-party" trade association. (See BioWorld Today, Feb. 16, 2010.)

"We correctly reasoned that our only real enemy was disease and that only a fair and less partisan PhRMA would allow us to continue our work in the face of mounting and increasingly ugly partisan conflicts here in DC and around the country."

He insisted that reaching out to both parties was "the right thing to do."

The transition to a more balanced politics "continues to serve our critical mission," Tauzin said.

The person who follows Tauzin as PhRMA's CEO, he asserted, "should not be allowed to turn it back."

The compromise reconciliation package also is seeking to build on the $80 billion pledge PhRMA made last summer, cutting the costs of brand-name drugs in Medicare Part D by 50 percent. (See BioWorld Today, June 16, 2009, and July 27, 2009.)

PhRMA spokesman Ken Johnson said Congress now is seeking about $90 billion from the industry in an effort to increase the Medicare discounts by 75 percent.

Brennan said that PhRMA's litmus test from the start for health care reform legislation has been that it must promote positive patient outcomes, reduce cost, increase Americans' access to the best treatments and medicines and maintain, or "better yet," promote and improve on the drug industry's long-term ability to create essential medicines.

Speaking at the PhRMA conference Thursday, former senator Tom Daschle put the prospects of the health reform package successfully passing the House and the Senate within the next 10 days at 65 percent.

"I think we are very close," he said. "I hope we can bring it across the finish line."

If the reconciliation legislation passes, Daschle said, "we will be on the 30-yard line, with 70 yards to go."

Daschle acknowledged that the Democrats have "not done as good a job as I'd hope we could."

"Frankly, I'm concerned as anyone could be about the fact that we have fallen short," he said.