BETHESDA, Md. - The biotech industry's contention that it needsincentives to move products to market was sharply challengedTuesday at a meeting of the National Task Force on AIDS DrugDevelopment.

Several members of the panel and invited guests said they did not buyinto the industry's agenda to speed the development of AIDS drugs,rather they sought to look more globally at policy recommendations,including how to ease financial constraints imposed by currentreimbursement rules and managed care.

The tone on day one of this two-day meeting was quickly set whenPeter Arno, a professor at Albert Einstein School of Medicine in NewYork said that biotech firms "are manipulating the AIDS communityand rare disease patient groups" in order to "enhance their corporateprofiles. Abbey Meyers, executive director of the NationalOrganization for Rare Disorders in Washington, said the biotechindustry "is an emperor who had no clothes" because AIDS drugdevelopment is lagging not because incentives aren't in place butbecause the "basic science has not been done.

"If you were to add up the tax and other incentives sought by thebiotech industry, they would receive 90 cents back from the federalgovernment for every dollar they invest in research and development.Perhaps we should have the taxpayers pay the companies directly,"she said.

The task force, which heard almost 20 presentations pro and con onTuesday, will vote in June on its final recommendations to Healthand Human Services Secretary Donna Shalala. Several task forcemembers are pressing for specific recommendations that will targetAIDS drug development and not benefit the biotech industry ingeneral.

For example, there was agreement that the Biotechnology IndustryOrganization (BIO) and the Pharmaceutical Research andManufacturers of America (PhRMA) should provide the panel withinformation on specific classes of AIDS drugs its members want toinvestigate but are reluctant because of a shortage of research dollars.

BIO President Carl Feldbaum told the panel that his short "wish list"consisted of two goals: reimbursement for AIDS drugs and astreamlined but "not dismembered" FDA. PhRMA President GeraldMossinghoff said "clear fixes" for biotech firms also includeprotection of intellectual property, shortening the patent applicationprocess and Congressional passage of tax credits targeted at researchand development costs.

Preclinical Costs Continue To Skyrocket

Panel members did not dispute industry's concern about constantlyrising research and development costs. Joseph DiMasi, a TuftsUniversity economist, provided new data showing that preclinicalfixed costs continue to skyrocket. DiMasi's research showed thatlarge companies had a better return on the research and developmentinvestments than smaller firms "perhaps because of more effectivemarketing, better relations with the FDA and closer ties to academicresearchers."

However, other assertions made by industry representatives werecriticized. Arno questioned why the task force should debate financialincentives for the industry at all. "It is not clear how to explain theindustry's lack of success. To place blame on the lack of incentives iswrong," he said.

Several members of the task force sought to move the debate pastlodging of charges and counter charges and produce an agendaaround which a consensus could coalesce.

"The biotech industry's solutions are generic. Improvements in thepatent law may or may not help. What this task force should belooking at are proposals that impact AIDS drug development," saidMartin Delaney, director of Project Inform, an AIDS advocacy groupin San Francisco.

Delaney offered several observations based on his conversations withbiotech firms to balance some of the charged arguments. Hedismissed the industry's complaint that the debate over price controls"allegedly caused every investor to flee across the border. Investorsneed to get their feet on the ground.

"However, pricing is a real issue. Data show that if drugs are pricedtoo high, physicians will not use them. There are limits on what thesystem will pay for," Delaney said. "The price of AIDS drugs mustreflect their long-term use."

In another presentation, Maria Freire was invited to update the panelon what has transpired since the National Institutes of Health (NIH)dropped the reasonable pricing clause from its model CooperativeResearch and Development Agreement. The NIH will "negotiatetough agreements with pharmaceutical and biotech companies," saidFreire, director of NIH's Office of Technology Transfer. She is in theprocess of restructuring her staff to ensure that "companies meetmilestones to bring a drug to market so that taxpayers benefit."

Finally, PhRMA's Mossinghoff gave the group a bit of good news.The U.S. Pharmacopoeia and the American Medical Association in1997 will publish a revised drug usage compendium that, for the firsttime, will specify safe and effective off-label uses, a move that willopen doors for the pharmaceutical and biotech industries, which havelong sought off-label reimbursement of its products. n

-- Michele L. Robinson Washington Editor

(c) 1997 American Health Consultants. All rights reserved.

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