Follow-on biologics legislation will be crafted and brokered in the House by new Energy and Commerce Committee Chairman, Henry Waxman. The California Democrat won a vote of the House Democratic Caucus to unseat longstanding Chairman John Dingell (D-Mich.) on Nov. 20.

The new power broker

Waxman will serve as the primary power broker on health-related legislative initiatives without impediment going forward. Dingell often served as a more moderate force in the House to deflect some of Waxman's more contentious legislative proposals. "I am honored by the vote of the Democratic Caucus. We are at a unique moment and have an opportunity that comes only once in a generation. I will work with all parts of our Caucus and across the aisle to deliver the change that the American public expects us to deliver," Waxman said. "I have worked with Chairman John Dingell for 34 years. He has been a true legislative champion. I will always admire and respect him and his many legislative accomplishments."

Waxman's position as chairman of the House Committee on Oversight and Government Reform became less attractive as Democrats increased their gains in the House and now have a Democrat headed to the White House with President-elect Barack Obama.

Edolphus Towns, D-N.Y., Carolyn Maloney, D-N.Y., and Elijah Cummings, D-Md., are seen as the favorites to fill the vacancy left by Waxman. Towns is next in line by seniority rules, followed by Maloney; however, there is some momentum behind Cummings due to his aggressive style during hearings.

With all of the buzz in Washington around health reform, the ascension of Waxman to head up the Commerce panel may be a pivotal development for 2009 and have the most immediate impact on the biotech and pharmaceutical industries.

There are three major health-related issues that Waxman has been focused on which could be moved into legislation relatively quickly: follow-on biologics, Medicare Part D rebates for Medicare/Medicaid dual eligibles, and tobacco regulation by FDA.

Follow-on biologics and market exclusivity

Maybe most important of the three, Waxman will reprise his role in writing the 1984 Hatch-Waxman rules which created the modern generic drug industry by doing the same for biologics 25 years later.

In February 2007, Waxman introduced the generic-friendly Access to Life-Saving Medicines Act, H.R. 1038, which would create an abbreviated pathway for follow-on biotech drugs. The bill includes provisions that would:

1) allow FDA to make the determination whether clinical trials were necessary for a biosimilar application;

2) allow FDA to determine whether a follow-on was interchangeable with an innovator product;

3) not give innovator/reference products any predetermined market exclusivity.

Market exclusivity has been the thorniest issue in the follow-on biologics debate.

A compromise Senate bill, the Biologics Price Competition and Innovation Act, S. 1695, sponsored by HELP Committee Chairman Ted Kennedy, D-Mass., would have given innovators 12 years of market exclusivity, meaning copycats could not reference an innovator product in an application to FDA for at least 12 years.

Some experts following the issue in Washington say six to eight years of market exclusivity is more realistic under the current political conditions, similar to the Orphan Drug Act which provides innovators with seven years of market exclusivity.

Nevertheless, Kennedy has a strong biotech constituency with many of the largest companies, including Genzyme and Biogen Idec, calling Massachusetts home. He could act as a buffer to a more aggressive Waxman proposal.

Part D rebates for duals

Medicare Part D rebates is another area where Waxman is likely to exercise his new legislative authority.

Waxman and his senior staff have been drafting legislation for some time to rebates for drugs paid under the Part D program used by dual-eligible beneficiaries in line with higher federally-mandated rebates states receive under for Medicaid ("¹ Paying for Protection," The RPM Report, August 2008).

A July 24 report by Waxman's staff concluded that drug manufacturers were getting an extra $3.5 billion a year because of the rebate spread.

A recent white paper on health care reform introduced by Senate Finance Committee Chairman Max Baucus, D-Mont., includes the dual-eligible rebate technical fix as part of potential reforms for the next legislative session. Inclusion of provision indicates the proposal has support among more moderate Democrats.

Tobacco coming under FDA's watch?

Regulation of tobacco by FDA gains momentum with Waxman at the Commerce helm. Waxman convened the now-famous hearing of tobacco company CEOs in the 1990s to hold their feet to the fire for covering up the hazards of using those products and demonstrate how cigarettes were marketed to younger individuals.

The potential adverse impact to the drug industry of bringing tobacco under FDA's regulatory purview is that it would further stretch an already under-resourced agency even thinner.

An indication of where regulating tobacco stands is the role of a former Waxman staffer on the HHS transition team.

Bill Corr, now executive director of the Campaign for Tobacco-Free Kids, a non-profit national advocacy organization focused on reducing tobacco use among children and adults, is an HHS transition review team leader.

Corr served 12 years as counsel to the House Subcommittee on Health and the Environment under Waxman. He also served as HHS chief of staff under then-Secretary Donna Shalala.

The last time tobacco regulation was an issue, David Kessler was FDA commissioner. It may take another reform-minded commissioner to work with Congress and manage a regulatory shift of that size.

Pallone up, Stupak down

Waxman and Dingell weren't the only winners and losers in the Commerce fight. Frank Pallone, D-N.J., chairman of the Energy and Commerce Subcommittee for Health, publicly endorsed Waxman in his stand-off with Dingell and could get an elevated role as a reward.

On the other hand, Subcommittee for Oversight Chairman Bart Stupak, D-Mich., a vocal drug industry critic, was a leader of Dingell's whip team to re-elect the Michigan Democrat and could suffer fallout from his vocal criticism of Waxman's move.

Under House rules, following the election of the chairman of a committee, there is another vote for chairmanships of the subcommittees that go by seniority. Under that scenario, Dingell would get first pick of the subcommittees and could go after Pallone's position or the Energy and Quality subcommittee.

However, Waxman is understood to not have committed to the standard rules of designating subcommittees and could move to change them.

- Ramsey Baghdadi (r.baghdadi@elsevier.com)

Rep. Waxman Can Move Follow-On Biologics In New Role As Energy and Commerce Chairman

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