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Originally published Saturday, June 23, 2012 at 7:43 PM

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Biotech industry finds a friend in Jay Inslee

Democrat Jay Inslee was a key advocate for the biotech industry as Congress fought over a provision in the 2010 federal health-care law that regulates how quickly generic versions of costly new biotech drugs can be sold.

Seattle Times staff reporters

Editor's note

This is the first of an occasional series of stories this election season examining the records of Washington's top candidates for governor, Jay Inslee and Rob McKenna.

What are biologic drugs?

Biologics, unlike conventional chemical-based drugs, are made with living cells such as animal proteins. They also are much more complex and expensive than conventional drugs.

Many of these drugs, such as Enbrel for rheumatoid arthritis and Aranesp for anemia in people with chronic kidney failure, are given by injection.

Biologics accounted for 23 percent of the $320 billion that Americans spent on prescription drugs in 2011.

Source: IMS Health

and Seattle Times research

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The difference in cost between proprietary pharmaceuticals and their generic eqivalent... MORE
Just another reason to not vote for this idiot. MORE
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In the run-up to passage of the national health-care law in 2010, Congress was fighting over an obscure provision with billions of dollars at stake: how quickly to allow generic versions of costly new biotech drugs.

The biotech industry mounted an intense lobbying effort to delay copycat competitors. And the drugmakers found a champion in the Democratic congressman from Bainbridge Island — Jay Inslee.

Inslee, now running for state governor, was a key sponsor of a provision tucked deep in the health-care law that shields the biotech drugs, known as biologics, for 12 years from competition by cheaper generics.

Consumer advocates, retiree groups and the Obama administration have panned the 12-year protection as a giveaway to the drug industry that will add billions of dollars to the nation's medical costs.

But Inslee and other biotech supporters say the protection is vital to keep investment flowing to research on new drugs for cancer, arthritis and other diseases.

It also had political benefits. As Inslee championed their cause, drugmakers and biotech interests became his top campaign contributors.

During his final House re-election campaign in 2010, biotech and pharmaceutical companies and related interests accounted for $132,734, or more than 11 percent, of Inslee's $1.18 million fundraising total, according to a Seattle Times analysis.

Inlsee received more money from pharmaceutical and health-products firms than from any other industry, the Center for Responsive Politics says.

One company, Amgen, the world's largest biotech firm, became the single biggest source of Inslee's campaign cash. Its political-action committee (PAC) and executives from California and Washington, D.C., gave more to him than to any other lawmaker in the House or Senate.

In the middle of the biologics debate, meanwhile, one of Inslee's top staffers left to lobby for Amgen and other drugmakers.

Inslee said he's proud of his alliance with biotech, which employs some 20,000 people in Washington, including hundreds at Amgen's research and development offices in Seattle. He likened his work to a congressman from Iowa backing the corn industry.

"What we sell is innovation. I am not the candidate supported by the oil and gas industry. That's another candidate in the race," he said.

As he runs for governor against Republican Attorney General Rob McKenna, Inslee remains an upbeat evangelist for biotech.

If elected, he has pledged to aid the industry with tax breaks and a new biotech adviser in the governor's office.

Long history

Though frequently known more for his work on clean energy and global warming during his 15 years in Congress, Inslee has worked long on biotech issues.

Before resigning from Congress in March, he served on the House Energy and Commerce Committee, which oversees the Food and Drug Administration (FDA), with a key perch to shape the biologic-drug debate.

In that role, Inslee was an early and aggressive proponent of protecting biotech drugs from generic competition.

In September 2006, Rep. Henry Waxman, the powerful California Democrat who then chaired the Energy and Commerce panel, made the first proposal to create an approval process for generic versions of biologics, known as biosimilars.

Waxman had co-authored the 1984 Hatch-Waxman Act, which allowed generic versions of conventional chemical-based drugs to be sold five years after the name-brand version.

Waxman's 2006 legislation, and a companion version introduced by Sen. Charles Schumer, D-N.Y., included no explicit period of exclusivity for brand-name biologics to block out imitators. One industry analyst wrote that the bills "would provide manufacturers of (biosimilars) with virtually everything they could wish for."

The following year, Inslee staked out a far different position: to give biotech drugs 14 years of exclusivity and erect other barriers to make it harder for generics to win FDA approval.

Five competing versions of biosimilars bills followed in the House and the Senate during the next two years, unleashing a flood of lobbyists from both sides of the issue on Capitol Hill.

Eventually, Inslee joined with Reps. Anna Eshoo, D-Calif., and Joe Barton, R-Texas, in proposing legislation to give 12 years of exclusivity for biologics.

Waxman, who earlier had proposed no exclusivity period, countered with five years.

Congress ultimately sided with Inslee in granting 12 years of protection, dismissing a Federal Trade Commission (FTC) report that concluded it was "unnecessary" to maintain robust biologic-drug development.

The disputed biologics provision wound up incorporated on page 750 of the Patient Protection and Affordable Care Act signed into law by President Obama two years ago.

Critics say that was a costly mistake.

"This legislation means that we're going to be facing severe monopoly pricing and price gouging on an increasing share of the pharmaceutical market for a long time to come," said Robert Weissman, president of the nonprofit group Public Citizen. "The fact that you've got a hometown company is no reason to put the screws to consumers and the government, which pays for this stuff."

The Obama administration has also objected, proposing to reduce the biologics-exclusivity protection to seven years. That would save the federal government more than $4 billion in Medicare and Medicaid costs over the next decade, the administration says.

But biotech manufacturers and their backers say Inslee was right to give the lengthy protection to biologics, which are more complicated and expensive to develop than traditional drugs.

"If the public wants the drugs at all, if they want anybody to develop them, there has to be the ability to attract investment," said Chris Rivera, president of the Washington Biotechnology & Biomedical Association.

Rivera, who has worked 25 years in the biotech industry, said that the business is highly risky and that it takes an average of 10 years and $1 billion to get a new drug to market.

Flow of money

Inslee's work on behalf of the drugmakers brought an increasing flow of drug-industry money to his re-election campaign.

Giving to Inslee by biotech and pharmaceutical companies jumped nearly 72 percent from his 2008 campaign to his 2010 re-election run, according to The Seattle Times analysis.

Amgen became Inslee's top campaign backer, knocking off Microsoft as his biggest corporate sponsor. For the 2010 election, Amgen's PAC and executives gave $57,800 in contributions to Inslee's campaign and to his leadership PAC — more than to anyone else in Congress, according to an analysis by the Center for Responsive Politics.

Amgen, based in Thousand Oaks, Calif., has strong Northwest ties: Its top-selling arthritis drug, Enbrel, was developed by Immunex of Seattle, which was acquired by Amgen in 2002. The $15.6 billion company has 720 full-time workers in Washington state, most at its Helix research-and-development campus on Elliott Bay.

Amgen's PAC gave the maximum $10,000 each to Inslee's campaign and to his leadership PAC. But the bulk of Amgen's money came from individual donations from its executives.

Three-quarters of the individual donations came on one day, Feb. 17, 2010. That's when 31 Amgen executives, including then-Chief Executive Officer Kevin Sharer, gave a total of $29,550 to Inslee. Two other Amgen executives gave $500 each the day before.

Inslee said he was proud to attend a fundraiser and tour of the company's headquarters. "Look, these are people who are saving lives. I like to be allied to those who are saving lives," he said.

Kelley Davenport, an Amgen spokeswoman in Washington, D.C., declined to make executives available for interviews, or say precisely why they gave so much to Inslee.

"Simple explanation is political engagement — contributing to members of Congress and candidates, like Jay Inslee, who are generally supportive of important issues such as patient access and innovation preservation," Davenport said in an email.

Few companies were more visible on Capitol Hill than Amgen in pushing for protection for biotech drugs. Between 2006 and 2010, Amgen spent $59.3 million on lobbying in Washington, D.C., on various health-care issues.

Among Amgen's hired lobbyists was Nick Shipley, who while working as Inslee's legislative director helped craft his 2007 bill giving biologics 14 years of protection.

Shipley joined the Washington, D.C., health-care consulting firm The McManus Group in 2009 and has lobbied Congress on issues including protection for biologics.

Inslee said it wasn't Shipley or any campaign contributions that shaped his views. Instead, he said, it was the cancer researchers he's met over the years and the patients who have benefited from their work.

Congress shouldn't risk pinching off incentives to develop new drugs because of "bean counters" worried about higher drug costs, he said.

"The choice is whether or not you are going to have some of these lifesaving medications. came down on the side of having more lifesaving medications."

Data analysis by Seattle Times staff reporter Justin Mayo.

Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com. On Twitter @Jim_Brunner. Kyung Song: 202-662-7455 or ksong@seattletimes.com

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