San Jose Mercury News: Opinion: Short-sighted cuts: Obama’s budget undermines incentives to get new therapies, technologies to patients

By Todd E. Gillenwater, op-ed to the San Jose Mercury News
May 22, 2013

Here in California, the birth of the biotechnology industry was fueled by federal funding through the National Institutes of Health. Across the country, this funding helped lead to the development of medicines that treat millions of people worldwide.

As President Barack Obama’s 2014 budget correctly states, “Tomorrow’s advances in health care depend on today’s investments in basic research on the fundamental causes and mechanisms of disease, new technologies to accelerate discoveries, (and) innovations in clinical research.”

Specifically, the president’s budget proposes $31 billion to support NIH biomedical research. While this figure is only 1.5 percent higher than last year, it illustrates the president’s commitment to science. Especially given our austere fiscal climate, the president should be applauded for this commitment.

Developing new medicines, however, requires more than increased NIH funding. And unfortunately, several provisions in the president’s budget threaten to undermine the incentives researchers need to get new therapies and technologies to patients.

So while Obama’s budget gives with one hand, it takes away with the other — and much more.

For example, Obama’s research budget rightly prioritizes the devastating disease, Alzheimer’s. Today’s medicines help treat its symptoms, but no existing therapies halt or reverse its progression. New funding for Alzheimer’s research could generate more effective treatments — or even a cure.

And when such breakthrough medications are developed, they will likely be covered under the Medicare prescription drug (Part D) program. Unfortunately, the president’s budget includes several repeatedly rejected proposals, such as requiring manufacturer-paid rebates for dual-eligibles — people eligible for Medicaid and Medicare — that would undermine the successful, market-based program on which millions of seniors rely and restrict investments into groundbreaking new drugs.

Obama hopes to save $150 billion over 10 years, but by artificially lowering drug prices for some, the plan will raise costs for others, while limiting funds available for future drug development.

Another provision would reduce Medicare payments to doctors who treat patients with life-threatening conditions such as cancer. On paper, these cuts may lead to cost savings, but at what price? Already, cuts to Medicare Part B payments due to sequestration have forced cancer clinics to turn away patients. Obama’s budget proposes lowering these payments further.

A third proposal seeks to negate what was perhaps the only bipartisan part of Obamacare. Developed by California Rep. Anna Eshoo and the late Sen. Ted Kennedy, the provision established a pathway for the FDA to approve follow-on biologic medicines, or biosimilars — generic versions of the expensive, high-tech medications made from living materials rather than chemicals. This provision balanced the need for patient access and innovation by encouraging competition while maintaining protections for companies that can spend more than $1 billion to develop new biologics.

In the name of cost savings, the president’s budget seeks to undo this provision by slashing protections to less than what is provided in Europe, thus putting the California- and U.S.-dominant biotechnology industry at a competitive disadvantage.

The president should be lauded for proposing increased biomedical funding. NIH-funded research serves as the foundation for scientific advancements that offer hope to millions. But as important as NIH funding is, it’s not enough to make those promises a reality. That requires much more, including policies to promote the hundreds of millions of dollars needed to develop a medicine, and the protection of Medicare programs that are getting medicines to the patients who need them.

And here, the president’s budget gets it wrong.

Gillenwater is Executive Vice President for Advocacy & External Relations at California Life Sciences Association (CLSA), a nonprofit public policy organization representing leading academic institutions and biotechnology, medical device, diagnostics and pharmaceutical firms.

Read the full op-ed at the San Jose Mercury News.