The 'innovation agenda'

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Nancy Pelosi has a knack for the ironic. In unveiling what she called her party's "Innovation Agenda," the speaker from American Samoa proclaimed: "America (is) the breeding ground for the innovations and inventions that increased our prosperity, enhanced our lives, and protected and advanced our freedoms. That dynamic and virtuous cycle of innovation is what secured our status as world leader, and that status has remained unchallenged -- until now."

Little did we know that the challenge Mrs. Pelosi was referring to is the Democratic Party itself. In January, Rep. Henry Waxman, touting a Families USA study, promised that direct government negotiations with drug companies would save Medicare $190 billion, enough money to pay for every senior's out-of-pocket drug costs as well as expanding health insurance for kids and rehab for Britney Spears. The savings disappeared when it became evident they were only achievable if Medicare robbed seniors of access to many lifesaving drugs.

Democrats are still short the money. So they plan to get it by stopping that virtuous cycle of innovation in biotechnology. The Murtha plan for stopping the troop "surge" in Iraq is being peddled as a "support-the-troops plan." The Access to Lifesaving Medicines Act, offered by Mr. Waxman, Sen. Charles Schumer, Sen. Hillary Rodham Clinton and Republican Rep. Joanne Emerson, creates generic versions of biotech drugs to free up money for social programs. It is shrewdly devised as a consumer-protection measure. But in the process, Mr. Waxman and others weaken drug safety and patent-protection standards to enrich the generic drug industry.

Ironically (again) in touting the Innovation Agenda, the speaker from Samoa proclaimed: "Essential to our pre-eminence is the protection of intellectual property. Our agenda commits to protecting the intellectual property of American innovators worldwide." But this does not occur when it stands in the way of expanding the welfare state. Recently the military dictatorship running Thailand following the advice of anti-intellectual property activists (who care more for shredding corporate patent rights than protecting human rights in Thailand), said it would use its government pharmaceutical organization (GPO) to make generic copies of the heart drug Plavix and two HIV drugs, Kaletra and Stocrin. It has also threatened to seize the patent of 11 new drugs including Lipitor and Gleevec. Thailand claims it needs to make or import generic drugs to treat everyone with every disease. The junta, which has military monitors in every pressroom, received a warm endorsement from Mr. Waxman. All hail the Revolution.

Mr. Waxman and other Democrats cloaked their efforts in the concern that giving generic companies the license to produce these drugs will make medicines affordable for all. In fact, in 2002 Thailand's GPO failed to meet the World Health Organization's drug-quality standards. Worse, the drugs were so shoddy that they caused drug resistance, forcing patients to take a second regimen of drugs that raised overall infection rates and treatment costs. And even then, most of the $3 million worth of drugs are exported. The percentage of infected Thais receiving treatment is among the lowest in the developing world.

So what if generics don't really increase access to effective medicines? That's not the goal. Weaker intellectual property protection allows the Thai junta to line its pockets with the proceeds made from copycat products it can sell at huge margins, money it can then turn around and spend to reward cronies and buy political support. Similarly, the so-called Access to Life-Saving Medicine Act simply asserts it is scientifically safe to both produce generic clones of biotech drugs and switch people from the biotech products they are using to generic versions. Making similar but not exact versions of biotech drugs or vaccines that have the same clinical benefit without all the early clinical work required for an innovator product will be possible in the near future. But the Waxman-Clinton-Schumer bill is based on 40-year-old science. And it demands no testing of comparison products before or after they are marketed. Worse, it dictates to the FDA that the products must be approved as interchangeable.

Ironically, the same group of legislators who claim the FDA is unable to maintain the safety of existing drugs is pushing this legislation. Indeed, Mr. Waxman claims he is "justifiably skeptical of any effort to weaken the standards which assure that our food is safe and our medicines are safe and effective."

Out of nowhere and not because someone asked them to, Express Scripts (which manages drug benefits and would benefit from cheaper biotech products) did a study estimating the savings from follow-on biologics. In what will be news to most biotech firms, the "study" assumes that many biotech products have already lost patent protection and those products will immediately lose market share when the rest of the products do. The estimated savings over ten years -- $70 billion -- coincidentally adds up to the amount required to expand the child's health insurance program.

I wouldn't count on it. The FDA approved a comparison human growth hormone product called Omnitrope in 2006 based partially on data from Pfizer's growth product, Genotropin. But Omnitrope also underwent years of clinical tests. During these tests researchers discovered 60 percent of children developed infections with Omnitrope. The company had to do more studies and adjust its production process before it was approved. Omnitrope was never launched in America. In Europe, it has less than 1 percent of the market.

Robert Goldberg is vice president of the Center for Medicine in the Public Interest.