K Street Ready for Lots of Health Care

Posted May 21, 2008 at 4:31pm

From the campaign trail to the halls of Congress, health care reform is one of the biggest issues now being teed up for the 111th Congress.

Whether comprehensive health care reform is No. 1 on the next president’s agenda will depend on who is in the White House. But there will certainly be lots of action regardless, and health care lobbyists are already starting to lay the groundwork for a massive push beginning in January on everything from Medicare to Social Security.

One of the biggest ticket items — follow-on biologics — is expected to draw some of the biggest firepower on K Street. The issue, which would create a framework to regulate generics in the $90 billion biotech industry, is primed and ready for Congress to take action, proponents say.

Lobbyists are also expecting medical device reimbursements and an expansion of the State Children’s Health Insurance Program to create a lot of work downtown.

Yet lobbyists say there will be a stark difference between how a Democratic or Republican White House will approach health care. The consensus after interviews with more than a dozen health care lobbyists is that a Democratic presidency would likely address a larger health care package, including more government pay-fors and widening coverage compared to the presumptive Republican presidential nominee, Sen. John McCain (Ariz.).

McCain’s health care plan is expected to focus more on privately held insurance plans with government incentives and could include more single-ticket items such as e-health records that would be easier to reach consensus on.

No matter who leads the executive branch, health care lobbyists say it’s an unique opportunity to overhaul the system.

Having more Democrats in the Senate and a new White House that is expected to find a national health plan more acceptable than the Bush administration could create the perfect storm for change, former Sen. John Breaux (D-La.) said.

“We have an existing system where you get health care according to what box we put you into,” said Breaux of Breaux-Lott Leadership Group, a longtime health care advocate. The new Congress, he said, is “a blank page. It’s a real opportunity … all the preconditions that we’ve had before are gone.”

To that end, many lawmakers, including Sens. Ron Wyden (D-Ore.) and Max Baucus (D-Mont.) as well as Reps. John Dingell (D-Mich.) and Henry Waxman (D-Calif.), are polishing their health care bona fides for what is expected to be the biggest push on health care reform since 1994.

With Medicare in dire financial shape, the debate is also likely to focus on trying to limit the cost of health care for everything from medical devices to prescription drugs, while still increasing coverage.

“Congress will do a fair amount of the ugly work of trying to drive down drug and device prices through this question of what does it cost, what’s it worth, how do we measure its value and is there a cheaper way to do it,” said John Jonas, a health care lobbyist at Patton Boggs.

Similarly, lobbyists expect another battle on expanding SCHIP.

The key question for lawmakers will be how much to expand the program and what qualifications will be necessary to enroll. The debate, a continuation of the divisive legislative battle late last year, will focus on the question of payment as well, lobbyists say.

“SCHIP needs to be reauthorized with larger access and government responsibility,” said Karen Ignagni, head of America’s Health Insurance Plans.

The larger push on health care reform has also created an increased appetite among big drug companies to be seen as part of the solution instead of the problem.

“We’ve got to change the health care system to make it a marketplace of some kind that focuses more on prevention and disease management,” said former Rep. Billy Tauzin (R-La.), who heads PhRMA.

Yet, don’t expect it to be all “Kumbaya” moments between companies. The issue of

follow-on biologics pits generic manufacturers against biotechnology companies that want to remain in control of patents for a longer time period. Biologics are living organisms that are used in medicines like insulin.

The Coalition for a Competitive Pharmaceutical Market, which is made up of national employers, consumer groups and generic drug manufacturers, is still pushing for a fix this year to amend the process for companies wanting to bring follow-on biologic drugs to the market without a lengthy process.

The group is hoping for a similar legislative fix to what the 1984 Hatch-

Waxman Act did for pharmaceutical drugs. That bill sped up the process for generics to go to market after proving the drugs had similar effects to brand-name drugs.

While most health care lobbyists agree that it’s unlikely to get finished this Congress, CCPM will look to get a legislative fix during the first 100 days of a new administration, said Missy Jenkins, a lobbyist at Pharmaceutical Care Management Association and CCPM member.

“We have urged Congress to prioritize this,” AHIP’s Ignagni said. “We’re finding the pricing of [the Biotechnology Industry Organization] in some cases hundreds of thousands of dollars, and the prices have no relationship to development cost. That is going to put a lot of pressure to move forward with this legislation.”

Finding a compromise with BIO and biotechnology companies like Amgen is the biggest obstacle. While the biotech industry hasn’t been against finding a generic fix, it has argued for a longer time frame for patents, stressing the difference between drugs and biologics.

BIO is pushing for a 14-year drug exclusivity, said the trade organization’s president, former Rep. Jim Greenwood (R-Pa.). “If we could get an agreement on that this bill could fly,” Greenwood said.

The organization is supporting that extension in order to keep incentives for innovation, as well as including some clinical trials for the follow-on drugs.

“There is an ongoing big debate on how you incentivize the incredibly expensive enterprise of trying to produce these biologic products,” PhRMA’s Tauzin said. “You have to incentivize research and allow follow-ons to happen at the right time that are clearly safe enough for patients to take them.”