Scott Brown’s meteoric rise this month owes partly to the fact that once Americans got to see how the sausage was made in Obamacare, they lost their appetite for “reform.” The famous union carve-outs, special favors to wavering senators, White House deals with drug lobbyists — these things seemed beyond the bounds of the political wheeling and dealing that often accompanies complex pieces of legislation.
If the Democrats keep pressing their health plan, they will have to persuade the public to swallow another nasty nugget. It’s a provision crafted to benefit one well-connected drug company by keeping generic competitors off the market for an additional 4 1/2 years, and it would cost patients and hospitals $1 billion.
The provision would benefit the Medicines Co., which was shrewd in its choice of lobbyists. Whether or not the White House’s deals with Congress ever become law, the MDCO provision will shine as an emblem of the special interest pleading that has marked health care “reform.”
The story starts in March 1993, when the U.S. Patent and Trademark Office approved Patent No. 5,196,404, for an anti-coagulant drug that could prevent a second heart attack. On Dec. 15, 2000, the Food and Drug Administration approved the drug, which would be marketed by MDCO as Angiomax. Under the 1984 Hatch-Waxman Act, MDCO was entitled to extend the Angiomax patent — forestalling generic competition — to make up for time lost during the FDA approval process.
But MDCO’s lawyers from the patent law firm Fish & Neave filed the required paperwork on Feb. 14, 2001 — 61 days after FDA approval, and thus one day past the deadline. The USPTO rejected the application for being late.
As a result, the patent for Angiomax is set to expire in September, meaning generic versions of the drug would be available. Had MDCO’s attorneys filed the paperwork on time, generics would be kept off the market until 2014.
The company estimated that the clerical error would cost it $1 billion in profits, which would wind up as savings to hospitals, patients and generic companies. In response, MDCO began lobbying up in 2002, hiring 20 new lobbying firms with a lineup of heavy hitters including former House floor leaders Dick Gephardt, D-Mo., and Dick Armey, R-Texas. MDCO’s lobbyists in 2005 drafted a retroactive provision to require the USPTO to accept accidentally late filings. MDCO even offered to pay a fine. Regarding an earlier version of the bill, then-USPTO Director Jon Dudas testified that the measure would apply to exactly one drug application: Angiomax.
The 2009 version of the bill left no doubt as to its purpose. It specified that it applied to “a drug that is intended for use in humans that is in the anticoagulant class of drugs” — in one word, Angiomax.
Sen. Ted Kennedy was the champion of this fix, which had failed in both the 109th and 110th Congress, thanks in part to a lobbying counterattack by generic drug makers eager to profit from MDCO’s unforced error and start selling generic versions of Angiomax this spring. Interestingly, Fish & Neave, the patent firm that dropped the ball in 2001, has been bought up — with all its liability, presumably — by Ropes & Gray, the law firm that defended Kennedy after he caused Mary Jo Kopechne’s death at Chappaquiddick in 1969.
MDCO paid its lead lobbying firm, DLA Piper, $1.53 million for lobbying in 2008 and $1.19 million in the first nine months of 2009.
During the summer liberals flagged this lucrative contract as proof of some of the right-wing-corporate conspiracy against reform. MSNBC host Rachel Maddow pointed out that Armey was on the MDCO account even while his activist group, FreedomWorks, was organizing summer town hall opposition to Obamacare. The image Maddow tried to paint — drug lobbyists secretly undermining “reform” — fit perfectly into the White House narrative of “reformers” vs. industry. But MDCO promptly responded that it wasn’t opposing the health bill.
Now, according to my sources, we see that MDCO, like the drug industry broadly, is “pro-reform,” and that for MDCO, “reform” means a $1 billion windfall at the expense of hospitals and patients.
If a health care bill becomes law and contains the Angiomax provision, it would be a fitting coda. This “reform” has ridden on White House deals between drug lobbyists and massive carve-outs for labor unions. Health care “reform” has proved itself to be a special interest feeding frenzy driven by lobbyists. A billion-dollar gift to a politically connected drug maker is par for the course.
Timothy P. Carney, The Examiner’s lobbying editor, can be reached at [email protected]. He writes an op-ed column that appears on Friday.
