Generic Reform Hearings Set In Senate, But McCain/Schumer Lacks Vehicle

Sen. Edward Kennedy (D-Mass.) has committed to generic drug reform hearings in the Health Committee this spring, Capitol Hill staffer Missy Rohrbach told the Generic Pharmaceutical Association annual meeting in Coral Gables, Fla. April 9.

"The news that Sen. Kennedy is going to hold a hearing is fantastic news from our perspective. My boss has been pushing Kennedy to move on the bill," she said. Rohrbach is a legislative assistant to Sen. Charles Schumer (D-N.Y.), co-sponsor of the McCain/Schumer generic drug reform bill.

Kennedy's hearing could be held in early May. McCain/Schumer has been referred to the committee, so a mark-up could be scheduled following the hearing.

The Senate Commerce Committee also is planning a hearing on generic drug issues and is understood to have set an April 23 date. The committee does not have jurisdiction over the legislation, so the hearing will be more general (¹ (Also see "Generic Drug Competition Hearing Planned For Senate Commerce Cmte." - Pink Sheet, 25 Mar, 2002.), p. 18).

While Kennedy's decision to review generic drug issues allows the McCain/Schumer proposal to begin the formal legislative process, the Massachusetts Democrat also is removing one of the more attractive legislative vehicles for the bill from consideration.

Schumer had wanted to attach his bill to the Prescription Drug User Fee Act reauthorization proposal. Kennedy plans to attach PDUFA to the bioterrorism bill, however.

Rohrbach acknowledged that PDUFA "will probably never make it to the floor, so I don't know if that is our best vehicle."

The McCain/Schumer proposal also may serve as a defensive amendment in the upcoming debate over the international trade bill, Rohrbach noted. While the Hill Staffer called the trade bill a "potential vehicle" for the legislation, Schumer appears more interested in using the proposal as a bargaining chip.

"There are several provisions in the trade bill which have serious implications, not only for access to medicines worldwide, but also for future hopes for reforming Hatch/Waxman domestically," Rohrbach said. "Some of the provisions of the bill would require some harmonization with U.S. intellectual property laws."

The amendment could be offered "to ensure that these things don't get passed as law," she added.

Since the trade bill contains intellectual property provisions, attaching the patent bill likely would be germane. But sponsors could forgo the amendment in exchange for removal of worrisome provisions in the trade legislation or a pledge to consider McCain/ Schumer at a later time.

The trade bill, which passed the House last year, would give President Bush fast-track authority to negotiate tariff agreements with other countries. The Administration wants the bill passed by the end of April.

One concern Schumer has about the bill is that the intellectual property harmonization provisions would in effect freeze the Hatch/Waxman compromise worldwide, making reform even more difficult.

Although the prospects for enactment of McCain/ Schumer appear dim, continued attention to the issue may serve as an end in itself for GPhA.

The association's future efforts to push McCain/ Schumer largely will rest in coalition-building. Rohrbach credited the Business for Affordable Medicine and RxHealth Value coalitions for helping "generate momentum for getting some action on the bill."

"We are working very closely with various organizations to start to build the coalitions and I think this is the focus of the organization going forward," GPhA Chair and Barr Research President Carole Ben-Maimon, MD, stated.

Kathleen Jaeger, who takes over as GPhA president April 15, stated: "We are in very exciting times. We are seeing broad support throughout corporate America, unions, trade associations, consumer groups, others that really share in GPhA's interests and concerns."

Former Clinton health aide Chris Jennings, who now heads his own consulting firm and is doing legislative strategy work for GPhA, hopes to get RxHealth Value to fund a study assessing the cost savings that could be obtained if barriers to generic entry are eliminated.

RxHealth Value is a coalition of insurers, employers and consumer groups which focuses on developing Rx drug information over lobbying.

"We are working with a researcher from...Harvard University to produce such analysis and we hope it will be available later this year," Jennings said. The research project could be seen as an informal scoring of the economic impact of McCain/Schumer.

In addition to new data, the generics industry will be offering the argument that timely ANDA approvals push new product innovation. "In addition to saving the consumer money, we stimulate research and development," Ben-Maimon said.

"If you have...exclusivity that is never going to terminate, why would you develop a new drug?" she noted. "Finding the balance between providing the brand industry with the ability to make up their investments with profits that justify their research and development is very important. But it is also very important that those exclusivities end."

The Federal Trade Commission has not yet weighed in on Hatch/Waxman reform, pending completion of its study on brand/generic issues (² (Also see "Generics study" - Pink Sheet, 23 Apr, 2001.), In Brief).

Jaeger asked FTC Office of Policy Planning Director Ted Cruz "whether or not FTC has looked at Schumer/ McCain provisions and...come to a determination whether or not you would support those concepts?"

"We have not examined Schumer/McCain and do not have a position on the legislation," Cruz said. "We have been asked both formally and informally our views on Hatch/Waxman reform," but "before even thinking about broader reform," the commission needs to complete the report, he added.

"That study is still ongoing," Cruz noted. "I would hope that we would be able to report results sometime in the relatively near future."

"Once we've done that, we would at least be in a stage to consider whether we have an opinion on some of the particular reforms for Hatch/Waxman," he said.

The Bush Administration itself could also be a potential partner, Jennings commented. "I have...picked up some intelligence over the weekend that has led me to believe they might well be interested in working on our issues with us on some of the abuses that we talked about and that are talked about in McCain/Schumer," he maintained.