Thursday, February 07, 2008

Good News in the Last Bush Budget?

You might be surprised to hear me write that. To be sure, I cannot stand the Food and Drug Administration's user-fee system, and some have complained that the Bush budgets have consistently short-changes the FDA. But all things considered, I suspect we won't see any progress on either issue during 2008. But I did find what I believe to be good news in the Bush budget.

As my readers know, I chronicled the story about impediments to new competition in the insulin market (see here for the original article, and provided that Google's Blogger cooperates, some fairly extensive follow-up coverage might also be accessible). Unfortunately, last year -- thanks largely to lobbyists for the pharmaceutical industry -- the U.S. Congress delayed passing legislation which would have removed the final impediments for generic insulin, not to mention other, in the words of the FDA, "follow-on protein products". The bill was known as S.623/H.R. 1038, known as the "Access to Life-Saving Medicine Act of 2007". For those of you who don't have time to read all of the links, note that there are NO legal impediments to generic insulin today because it is considered a small-molecule drug not unlike aspirin, but the FDA's failure to outline procedures for generic manufacturers to attain approvals has prevented them from emerging.

Anyway, as I predicted in my 2007 Year-End Review, I said that the legislation would almost certainly re-emerge this year, and I was right! On Monday, Reuters reported that the budget for the Food and Drug Administration (FDA) would include mandates for the Agency to move ahead with that. The President surprised many by calling on for legislation enabling the FDA to approve generic biologics, which are made from proteins from living cells.

Of course, Lehman Brothers analyst Tony Clapsis did say the Bush Administration's support for generic biologics was a boost to the cause, but he felt that competing plans in the U.S. House of Representatives might prevent any changes this year.

"My view is they missed their opportunity last year," Clapsis said.

I suspect that is most unlikely. The fact is that a budget agreement, whether or not you agree with President Bush or Congress, will have to move forward at some point this year, or the Government will shut down. A complete budget shutdown hasn't occurred since the 1970's if I am not mistaken. With support from both Mr. Bush and Congress, it looks likely that some agreement will come, and not a moment too soon, as far as I am concerned.

Let me just say that I personally am not very likely to use generic insulin myself. But the cost savings to the U.S. healthcare (or is that "sickcare"?) system would be enormous. A 2007 study undertaken by pharmacy benefits manager Express Scripts Inc. found that generic insulin could save the U.S. $797 million in the first year, and totaling in excess of $16 billion over 10 years. And the libertarian in me cannot stand impediments to free markets -- as we have today's insulin market. I think we're very likely to see some progress this year. The reason I support generics is I feel that the only solution to the lack of innovation we're seeing in the insulin market is competition. I don't like being treated like a cash cow by the drug industry!

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