A perfect example of the difficulties involved in health care reform can be found in the debate over what to do about highly promising but highly expensive biologic drugs and vaccines.
Well-intentioned attempts in Congress to bring down those costs could backfire. They could kill incentives for entrepreneurial scientists to develop new biologics — and therefore put patients at risk.
Biologics are complex medications crafted from living organisms and genetically engineered molecules.
They play key roles in fighting ruinous diseases like cancer, rheumatoid arthritis and multiple sclerosis.
They can cost between $14,000 and — at the upper end — $50,000 or more a year.
Though they currently represent just 14 percent of the prescription- drug market, they are quickly growing.
Colorado has emerged as a center for research and development of biologics. The industry directly employs more than 21,000 Coloradans, according to John Collar, the Colorado BioScience Association’s president and chief executive. Many more are employed in support jobs.
From big players like Amgen to smaller labs and medical research departments at our larger universities, biologics mean promising careers and opportunities here. As many as 650 companies, big and small, have operations in Colorado. Collar says the state now ranks fifth in the nation in attracting venture capital for biologics.
Because biologics can cost $1 billion to develop over a long and arduous period of delicate experiments and test trials, their makers argue they need significant patent protection to allow them a chance to recoup that investment.
But given such high costs, lawmakers have an incentive to allow competitors a chance to develop so-called biosimilars, or the equivalent of generic drugs.
Unlike the “small molecule” drugs most of us are familiar with, biologics don’t yet have a mechanism in place that allows for the approval of generic competition.
Congress wants to establish that mechanism, as it did a quarter-century ago with traditional medications.
Companies that invest in biologics want Congress to set a 12-year period of exclusivity to allow them to make back the money they spent in development.
Small-molecule medications, which are simpler to develop, enjoy five years of exclusivity. And some lawmakers are pushing for biologics to also get just five years.
President Barack Obama has suggested biologics get seven years of exclusivity.
Clearly, patients benefit from the risk-reward structure of the development of biologics. We want to see this type of innovation flourish.
But we also want competition to foster lower prices.
The seven years Obama suggests seem too conservative to us, while a 12-year monopoly is probably the outer limit of a reasonable range.
We wonder if there is a sweet spot in between.
