Too Little for Drug Industry Companies Want More Protection From Financial Loss
From: JWissmille (jwissmille_at_aol.com)
Date: 07/29/04
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Date: 29 Jul 2004 22:57:48 GMT
"Companies would be hesitant to develop something if they didn't know what
was at the end of the rainbow," Fauci said. "If you deliver the product, we
will guarantee you get money."
"........... Bioshield
doesn't remove all the uncertainties of developing the drugs. They complain
that it does not offer complete liability protection should a drug have
adverse effects on patients or fail to protect them against a pathogen,
which could lead to lawsuits....."
http://www.washingtonpost.com/wp-dyn/articles/A13873-2004Jul25.html
The Washington Post
July 26, 2004
Bioshield Too Little for Drug Industry
Companies Want More Protection From Financial Loss
By Michael Barbaro
Washington Post Staff Writer
When President Bush signed Project Bioshield into law last week, few
companies seemed to have more to celebrate than Human Genome Sciences Inc.,
a Rockville biotechnology firm that has spent more than $10 million to
develop a drug to prevent and treat anthrax infections.
Anthrax infections are rare, so the drug has little appeal to the average
consumer. But Project Bioshield, which sets aside $5.6 billion for the
government to stockpile a medical arsenal against biological weapons, gives
Human Genome Sciences exactly what it needs: a buyer.
Yet executives at Human Genome Sciences are hardly cheering. The drug has
cleared several tests, but the government has not ordered a single dose. And
even if it does, it may buy only a small amount, making it hard for the
company to earn much of a profit.
"There is just a lot of uncertainty," said James H. Davis, Human Genome
Science's general counsel.
Bioshield, which the government has billed as the first step in creating a
biodefense industry in the United States, has received a largely lukewarm
response from the companies it was designed to help.
The bill authorizes the use of federal money over 10 years to buy drugs and
vaccines to counter a wide range of pathogens. Under the law, federal health
officials can contract to buy drugs still under development, with purchases
contingent upon tests establishing that the treatments work.
It allows the Food and Drug Administration to authorize use of unapproved
products in emergencies and gives the National Institutes of Health the
power to speed up biodefense research.
Industry executives and analysts say that developing medicines for use after
a biological attack remains a highly risky business, with long development
times, slim profit margins and the possibility of devastating patient
lawsuits if a drug fails.
"I can't blame companies for not wanting to get involved," said Charles L.
Bailey, executive director of research at the National Center for Biodefense
at George Mason University. "It is not a very attractive market."
Anthony S. Fauci, director of the National Institute of Allergy and
Infectious Diseases, said that by guaranteeing the government will purchase
a successful product under contract, Bioshield has removed a major roadblock
for companies.
"Companies would be hesitant to develop something if they didn't know what
was at the end of the rainbow," Fauci said. "If you deliver the product, we
will guarantee you get money."
Dozens of companies backed the new program. But, executives say, Bioshield
doesn't remove all the uncertainties of developing the drugs. They complain
that it does not offer complete liability protection should a drug have
adverse effects on patients or fail to protect them against a pathogen,
which could lead to lawsuits. It also doesn't eliminate the chance that
another company will develop a better product that the government wants
more.
Few companies have shown much enthusiasm for diverting staff and money from
programs to develop drugs, such as cancer and cholesterol treatments, with
bigger and more established markets. Of about 1,000 U.S. biotechnology
companies, about 100 are working on biodefense projects, according to the
Biotechnology Industry Organization, an industry trade group.
Human Genome Sciences' anthrax treatment is being tested for safety in
humans. But because it would be unethical to expose people to deadly
pathogens, it cannot be tested for effectiveness. Companies can't know if a
drug can protect people from a given biological agent until after an attack.
"Until the liability question is solved, we're not going to see big drug
companies come to the table," said Frank M. Rapoport, who represents vaccine
maker Aventis Pasteur SA. "They have too much to lose."
Other Washington companies working in biodefense say Bioshield is unlikely
to substantially alter their business plans.
Two of them, Dynport Vaccine Co. of Frederick and GenVec Corp. of
Gaithersburg, are working on vaccines for the military and said they are
exploring the possibility of applying for Bioshield money.
Cambrex Corp. of East Rutherford, N.J., which has offices in Baltimore and
Walkersville, Md., and Invitrogen Corp. of Carlsbad, Calif., which this year
bought BioReliance Corp. of Rockville, perform contract testing and
manufacturing services for companies in biodefense. Both expect new clients
as smaller biotechnology companies, with limited space and staff, apply for
Bioshield funding.
Still, C. Robert Eaton, president of MdBio Inc., a Maryland trade group for
biotechnology companies, said, "I don't think companies are going to turn on
a dime to start chasing this money."
Congress rejected industry efforts to include in the Bioshield bill stronger
incentives such as research and development tax credits, the extension of
existing patents and stronger liability protection.
But Fauci said he expects Congress to address the industry's biggest
concerns, such as liability. "Bioshield does not solve all the disincentives
a company may have to get involved," he said. "But it's a very good start."
FDA acts to halt suits
By ROBERT PEAR, New York Times
First published: Sunday, July 25, 2004
WASHINGTON -- The Bush administration has been going to court to block
lawsuits by consumers who say they have been injured by prescription drugs
and medical devices.
The administration contends that consumers cannot recover damages for such
injuries if the products have been approved by the Food and Drug
Administration. In court papers, the Justice Department acknowledges that
this position reflects a "change in governmental policy," and it has
persuaded some judges to accept its arguments, most recently scoring a
victory in the federal appeals court in Philadelphia.
Allowing consumers to sue manufacturers would "undermine public health" and
interfere with federal regulation of drugs and devices, by encouraging "lay
judges and juries to second-guess" experts at the FDA, the government said
in siding with the maker of a heart pump sued by the widow of a
Pennsylvania man. Moreover, it said, if such lawsuits succeed, some good
products may be removed from the market, depriving patients of beneficial
treatments.
In 2002, at a legal symposium, the Bush administration outlined plans for
"FDA involvement in product liability lawsuits," and it has been
methodically pursuing that strategy.
The administration's participation in the cases is consistent with
President Bush's position on tort reform.
Bush often attacks trial lawyers, saying their lawsuits impose a huge
burden on the economy and drive up health costs. The Democrats' vice-
presidential candidate, Sen. John Edwards, a longtime plaintiffs' lawyer,
says his proudest accomplishment in Washington was to help win Senate
passage of a bill defining patients' rights, including the right to sue.
(The bill never became law.)
Jay P. Lefkowitz, former director of Bush's Domestic Policy Council, said
the FDA's litigation strategy embodied "good health policy and good tort
reform."
But Rep. Maurice D. Hinchey, D-Saugerties, said the administration had
"taken the FDA in a radical new direction, seeking to protect drug
companies instead of the public." Hinchey recently persuaded the House to
cut $500,000 from the budget of the agency's chief counsel as a penalty for
its aggressive opposition to consumer lawsuits.
In the Pennsylvania ruling, issued Tuesday, the appeals court threw out a
lawsuit filed by Barbara E. Horn, who said her husband had died because of
defects in the design and manufacture of his heart pump. The Bush
administration argued that federal law barred such claims because the
device had been produced according to federal specifications. In its
briefs, the administration conceded that "the views stated here differ from
the views that the government advanced in 1997," in the U.S. Supreme Court.
At that time, the government said that FDA approval of a medical device set
the minimum standard, and that states could provide "additional protection
to consumers." Now the Bush administration argues that the agency's
approval of a device "sets a ceiling as well as a floor."
The administration said its position, holding that individual consumers
have no right to sue, actually benefited consumers.
The threat of lawsuits, it said, "can harm the public health" by
encouraging manufacturers to withdraw products from the market or to issue
new warnings that overemphasize the risks and lead to "underutilization of
beneficial treatments."
Allison M. Zieve, a lawyer at the Public Citizen Litigation Group who
represented the plaintiff in the Pennsylvania case, said, "The government
has done an about-face on this issue." If courts accept the
administration's position, Zieve said, it would amount to a backdoor type
of "tort reform" that would shield manufacturers from damage suits.
Patients and their families said they felt betrayed.
Kimberley K. Witczak of Minneapolis said her husband, Timothy, 37,
committed suicide last year after taking the antidepressant drug Zoloft for
five weeks. "I do not believe in frivolous lawsuits," Witczak said, "but
it's ridiculous that the government is filing legal briefs on the side of
drug companies when it's supposed to be protecting the public. My husband
would be alive today if he had received adequate warnings about the risk of
self-harm." Witczak sued Pfizer, the maker of Zoloft, in May. The
government has not intervened in her case.
Thomas W. Woodward of North Wales, Pa., whose 17-year-old daughter
committed suicide last year after taking Zoloft for a week, said, "I've
been sickened to see the government taking the side of pharmaceutical
companies in court." Woodward has not filed a suit.
Hinchey said that FDA lawyers, led by the agency's chief counsel, Daniel E.
Troy, had "repeatedly interceded in civil suits on behalf of drug and
medical device manufacturers."
Witczak, Woodward and Hinchey said Troy had a potential conflict of
interest because Pfizer was one of his clients when he was a lawyer in
private practice.
Troy refused to discuss the agency's legal arguments or the criticism of
his role. Dr. Lester M. Crawford, the acting commissioner of food and
drugs, said Troy had "complied with the ethical requirement to recuse
himself from any matter involving a past client for a year" after he joined
the government in August 2001.
In its court filings, the Bush administration argues that private lawsuits
threaten to disrupt a comprehensive nationwide system of drug regulation,
and that federal standards pre-empt requirements established by state
judges and legislators. In effect, the administration says, if a local
judge or jury finds that a drug or device is unsafe, it is in direct
conflict with the conclusion reached by the FDA after years of rigorous
testing and evaluation.
Five of Troy's predecessors sent a letter to Congress dated July 15
endorsing his position. The government occasionally filed such briefs in
the last 25 years, they said, but "there is a greater need for FDA
intervention today because plaintiffs are intruding more heavily on FDA's
primary jurisdiction than ever before."
Some judges and legal experts disagree. Erwin Chemerinsky, a constitutional
scholar at the University of Southern California Law School, said, "The
Supreme Court has expressly ruled that FDA regulation does not pre-empt
state law and local regulation" in all cases.
In a Tennessee case involving a cardiac pacemaker, the Bush administration
told a state trial court, "It is inappropriate for a jury to second-guess
FDA's scientific judgment on a matter that is within FDA's particular
expertise."
If juries in different states reach different conclusions about the risks
and benefits of a medical device, they will cause "chaos for the regulated
industry and FDA," the administration said.
All Times Union materials copyright 1996-2004, Capital Newspapers Division
of The Hearst Corporation, Albany, N.Y.
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