[Ip-health] The New Democrats: The Coalition Pharma and Wall Street Love

robert weissman rob at essential.org
Mon Oct 25 19:42:39 PDT 2010

*Excerpt follows below. For the full story, click on the URL.




  The New Democrats: The Coalition Pharma and Wall Street Love

by Sebastian Jones 
<http://www.propublica.org/site/author/sebastian_jones/> and Marcus 
Stern <http://www.propublica.org/site/author/marcus_stern/>
ProPublica, Oct. 25, 2010, 12:45 p.m.


*A Biotech Carve-out*

By the time Barack Obama was elected president, the New Democrats had 
accomplished most of the goals they set out for themselves when they 
reorganized. They were pulling in impressive amounts of money, helping 
handpicked recruits get elected in tight suburban districts, and even 
starting to influence legislation in the House.

The only thing they hadn’t done was occupy the driver’s seat on major 
legislation. With a Democrat in the White House and health care and 
financial reforms on the table, that now seemed possible. The question 
was what the legislation would include and how far it would reach.

Publicly, many Wall Street, pharmaceutical, and even health-insurance 
companies and trade groups supported regulatory overhaul of their 
respective industries. But privately, they maneuvered to minimize the 
impact on their bottom line. Their strategy was two-fold: They wanted to 
limit reform to fixing past trouble spots, and they wanted to steer 
clear of pre-emptive or sweeping regulations. To do this, they needed 
groups like the New Democrats and Blue Dogs.

The Blue Dogs took the lead in protecting business interests during 
healthcare reform. Although the Blue Dogs and the New Democrats have 
much in common, including 21 members and many of the same K Street 
backers, there are differences as well. Because of their generally 
Southern and rural constituencies, the Blue Dogs’ top concerns involve 
the national debt, energy legislation and social issues. The New 
Democrats represent suburban districts, some of them solidly Democratic, 
and are more interested in hi-tech industries, trade policy and finance. 
They also have tended to be a less cohesive voting bloc than the Blue Dogs.

Throughout the debate over healthcare reform, the New Democrats often 
split on what policy approach to take, with some pushing for a 
government-paid health insurance option while others opposed almost 
every proposal for change. When they worked together, however, they had 
the clout to help deliver significant wins, as they did last year for 
the biotechnology industry.

At issue was how long companies would be allowed to hold exclusive 
patents on a relatively new class of medicines called biologics, 
preventing cheaper generic versions from entering the marketplace.

Biologics, which are grown within living cells, are used to treat 
several types of cancer, anemia, and arthritis, and their use is 
expected to expand greatly in coming years. Annual sales of biologics 
currently range from $40 billion to more than $100 billion, according to 
industry analysts.

BIO, the industry’s trade group, argued that these medicines are so 
difficult and costly to produce that they deserve at least a 12-year 
monopoly, instead of the five-year monopoly most pharmaceuticals get. 
They also argued that, due to the complex nature of the drugs, generics 
could pose safety risks. However, with the industry's ever-increasing 
profits and the rising cost of medicines, that argument was a hard sell. 
In June 2009, the Federal Trade Commission issued a report 
<http://www.ftc.gov/opa/2009/06/biologicdrugs.shtm> [7] saying that the 
12-year exclusivity was “too long,” leading the White House to suggest a 
compromise of seven years.

Among those pushing for the 12-year patent was Matthew Schumaker, a 
former executive director of the New Democrat Coalition who is now a 
lobbyist with BIO. Another was John Michael Gonzalez, who had served as 
chief of staff to one of the New Democrats' rising stars, Illinois Rep. 
Melissa Bean 
[1], and works for the lobbying firm Peck Madigan Jones Stewart, on 
behalf of BIO and several of its member companies. Neither responded to 
interview requests for this story.

Rep. Jay Inslee 
[1], a New Democrat from Washington state, co-sponsored a measure that 
set the patent at 12 years. It also included language that consumer 
groups said would allow near-automatic renewals of exclusivity periods 
if manufacturers changed dosages or delivery methods.

The New Democrats voted to endorse the proposal, throwing the full 
weight of the caucus behind it and lobbying party leaders 
[8] to support it. With consumer groups too busy fighting on multiple 
fronts over big-ticket items like the public option, the measure became 
law. BIO won its 12-year patents and named Melissa Bean its "legislator 
of the year" <http://www.businesswire.com/news/home/20100414005594/en> 
[9] for 2009-2010. The group’s press release specifically citied her 
membership in the New Democrat Coalition and praised her leadership on 


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