Friday, February 29, 2008

How $5 million in lobbying can cost taxpayers $19 million, and heart patients $1 billion

Timothy Carney reports:
The narrowly tailored provision, first added to the bill by Sen. Edward Kennedy, D-Mass., is the fruit of an impressive $4.6 million lobbying campaign featuring an all-star cast of former lawmakers and government officials from both parties.

Medicines Company, or MDCO, a pharmaceutical maker, has dispatched this full-court lobbying press in hopes of extending by 56 months its patent on a heart medication, preventing competition from generics in that period and boosting company earnings by $1 billion. To this end, the company’s lobbyists have crafted a change to patent law that would apply, in fact, only to MDCO.

The story line begins Dec. 15, 2000, when the Food and Drug Administration approved sale of Angiomax, the prescription heart medication on which MDCO held the patent. Because the FDA approval process took some time, MDCO was entitled to a 56-month extension of its Angiomax patent past the March 2010 expiration. However, MDCO didn’t apply for this extension until Feb. 14, 2001, 61 days after FDA approval, and thus one day past the deadline clearly set in law for such applications.

This meant generic versions of Angiomax would hit shelves in 2010 rather than in 2014 — good news for Angiomax patients and generic drugmakers, but bad news for MDCO. That one-day tardiness cost the company an estimated $500 million to $1 billion. MDCO begged for forgiveness, but the law doesn’t grant the U.S. Patent and Trademark Office any flexibility when it comes to this deadline.

Rather than forgo half a billion dollars, MDCO did what any company in its position would do — it started lobbying Congress to change the law. MDCO, however, assembled an unusually impressive lineup of lobbyists. The company hired at least eight lobbying firms and retained the biggest names available.
(via John Carney)

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