Biotech Threats Disappear as Supreme Court Upholds Health Law

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"The healthcare bill included important provisions that the biotech industry had fought long and hard for. In particular, the cloud that hung over a provision allowing 12 years of marketing exclusivity for biologics, as well as the regulatory pathway for biosimilars, has now disappeared."

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Fierce Biotech, John Carroll, Tracy Staton and Mark Hollmer

Biotech industry leaders breathed a sigh of relief this morning. The United States Supreme Court has narrowly upheld most of the Affordable Care Act, retaining a mandate that requires individuals to purchase insurance or face a penalty.

While the ruling primarily has major implications on how many Americans have health insurance coverage and how it is paid for, the bill also included some important provisions that the biotech industry had fought long and hard for. In particular, the cloud that hung over a provision allowing 12 years of marketing exclusivity for biologics as well as the regulatory pathway for biosimilars has now disappeared along with the threat that the Supreme Court might have tossed out the entire law.

Just recently at the big BIO confab in Boston top biopharma execs fretted over the future of the law and the potential impact of a far-reaching decision that could have forced all parties back to the drawing board. At worst, though, the industry was looking at an expensive and probably lengthy effort to get the laws back on the books in an election year. With the mandate left in place and the law upheld, with the conservative John Roberts providing the swing vote, the Biotechnology Industry Organization and others can turn the page for now to other matters.

"The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax," Chief Justice Roberts wrote. "Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness."

In a release BIO chief Jim Greenwood said the group would continue to offer its advice to regulators as they hammer out the rules over biosimilar development. Some of the biggest companies in the industry, like Amgen and Merck and Biogen Idec, have set up biosimilar initiatives. BIO has been advocating that the new biosims that will compete with branded products should be put through a rigorous clinical trial program, avoiding the onslaught of cheap copycats that has blighted traditional small molecule treatments.

"In addition, BIO will continue to support efforts to repeal the Independent Payment Advisory Board (IPAB), which threatens patient access to needed cures and medical breakthroughs," noted Greenwood.

Drugmakers can rest easy on healthcare reform as well. With the Supreme Court's ruling to uphold the law, pharma's $80 billion worth of horse-trading stays intact. Yes, the discounts that have taken a bite out of U.S. sales will stand. But the insurance mandate stands too. So, drugmakers will see that big influx of patients—the reason they traded away those discounts—when that provision takes effect in 2014. . .View Full Article

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