By Andrew Edwards

Staff Writer

The Pharmaceutical Research and Manufacturers of America recently announced it would relinquish its support for the health-care legislation if Congress were to reduce the proposed twelve-year monopoly on new biological drugs. During this twelve-year period, drug companies are al-lowed to be the exclusive seller of the new biological drugs they create. By charging high prices for new drugs, companies can use this period of monopoly to recover expenses incurred during the research and development of new drugs. The pharmaceutical industry’s trade group includes the chief executives of the leading pharmaceutical companies on its board, including Pfizer, Merck, and Bristol-Myers.

The drug industry was the first to back reform and its sup-port has helped move legislation through Congress. The current support of the pharmaceutical industry is a sharp contrast to the mid-1990s, when drug company executives opposed President Clinton’s health-care plan. An important reason for their support is that, unlike the Clinton legislation, the currently proposed legislation does not include provisions that allow importation of brand-name medicines or that provide a public option for government-run insurance. Drug companies have promised $80 billion in rebates over ten years to assist with the cost of insuring more Americans. A portion of this money will be used to discount brand-name drugs for seniors not covered by Medicare. The gap in Medicare prescription drug coverage is referred to as the “doughnut hole.” The Medicare doughnut hole is the medical treatment that Medicare beneficiaries are financially responsible to cover. This occurs when their costs exceed the prescription drug cover-age level and are less than the catastrophic coverage level. Recently, there has been pressure in the House and Senate to fully cover the doughnut hole, thereby pressuring drug makers to increase their overhaul concessions.

The other major purpose of the contribution is to help off-set the cost of providing subsidies to the uninsured. Pro-posed health reform increases government costs and contributions from pharmaceutical companies are seen as a way to partially offset new costs. Drug companies are hoping the health overhaul will increase their market due to the fact that more Americans will be insured and can therefore afford prescription drugs.

The pharmaceutical industry backed reform early on in the hope that they would be able to influence the intent of the legislation. The industry trade group believes that twelve-year protection for new biological medicines is necessary to promote future drug innovations. They argue that without proper patent protection firms would not be willing to spend vast sums on research necessary for creating new drugs. The industry trade group, which has long cooperated with pro-posed legislation and made some initial concessions, has announced that it can no longer support the bill if it includes a reduction of data protection on biological drugs.