Archive for the ‘Pharmaceuticals’ Category

by Ashley Bender

Lobbying by corporate giants may have succeeded in swaying a powerful government agency from changing an outdated, expensive payment system that wastes taxpayer dollars on bloated corporate profits. And, while the industry did pay $8 million on its lobbying effort to prevent the changes, the annual future corporate return on the effort is projected to be as much as 100 times ($800 million) the lobbying cost.

The United States Government and Accountability Office found that Medicare overpaid dialysis treatment centers for services administered to seniors by between $650 and $800 million in 2011. Most of the overpayment went to two large corporations, DaVita HealthCare Partners Inc. and Fresenius Medical Care AG, which together control a majority of the dialysis center market.

To mitigate the gross overpayment to dialysis treatment centers, the Centers for Medicare and Medicaid Services (CMS) proposed to reduce future payment rates for expensive anemia drugs and other dialysis center services by a total of 9.4 percent for calendar year 2014. Reducing Medicare payments to dialysis centers Medicare would save an estimated $4.9 billion over the next ten years, according to the Congressional Budget Office. But the healthcare giants were able to convince more than 100 members of Congress to oppose the proposed CMS rule and suggest that the Obama administration either reverse the spending cuts or dramatically water down the spending cut proposal.

On Friday, November 22, CMS released a press statement acquiescing to the wishes and pressures of the health care corporate titans. In the end, CMS’ policies remain virtually unchanged. Rather than cutting reimbursement payments to dialysis centers by 9.4 percent, the payments will be kept essentially flat between the 2013 reimbursement rates and the 2104 reimbursement rates. Dialysis treatment centers will continue to be overpaid, and DaVita HealthCare Partners Inc. and Fresenius Medical Care AG will continue to reap hundreds of millions of excess taxpayer dollars.

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a photo of Rick Claypool, online director for Public Citizen's Congress WatchThe corporate right wing is unleashing one of its more tired ploys in an attempt to smear our campaign to stop corporations from secretly distorting elections via front groups and shell companies.

The ploy is to label a policy proposal as “too partisan,” regardless of how much broad bipartisan support it has.

Then repeat.

And then repeat (ad nauseam).

In this case, we’re talking about a Securities and Exchange Commission (SEC) rule to require corporations to disclose their political spending, a reform supported by 77 percent of Americans across the political spectrum, and 91 percent of recently surveyed business leaders.

Rep. Darrell Issa (R-Calif.), chair of the powerful House Oversight Committee, issued a missive calling on the SEC to ignore Public Citizen and the more than 600,000 people (many of whom are investors) who have called on the SEC to bring corporate dark money into the light.

The Issa missive specifically mentioned Public Citizen. Here are a few examples:

“… Public Citizen … is spearheading outside efforts to pressure the SEC to adopt a political disclosure rule.”

We can’t take all the credit, but thanks for noticing our hard work.

“… Public Citizen, a group with a history of calling for investigations of groups organized under section 501(c)(4) …”

Issa means 501(c)(4) groups like Karl Rove’s Crossroads GPS. Guilty as charged – with pride.

Public Citizen has a history of demanding that the IRS and the FEC investigate tax-exempt groups.”

To protect taxpayers by making sure our tax dollars don’t wind up subsidizing partisan corporate propaganda? Absolutely.

Issa’s intention seems to be to insinuate something unseemly about transparency about corporate political spending.

But the fact is that secret corporate spending is a tremendous problem for both the general public and for investors.

As a result of the U.S. Supreme Court’s reckless ruling in Citizens United v. Federal Election Commission, corporations can keep their political spending secret simply by funneling their political dollars through trade groups like the U.S. Chamber of Commerce and dark money outfits like Karl Rove’s Crossroads GPS.

Union members can look up filings with the Labor Department to find out how their labor organization is spending money in politics. Residents of areas being blasted with super PAC ads can conduct research to find out who is behind them.

Why should the likes of Walmart, Exxon Mobil, Bank of America and Monsanto be allowed to spend in secret?

We don’t think they should – and neither do most Americans.

The issue of transparency of corporate political spending is neither a partisan issue nor a special interest issue.

It is a public interest issue, and one we proudly support.

Want to be involved?

Join the more than 600,000 people who have called on the SEC to disclose corporate political spending.

Rick Claypool is online director for Public Citizen’s Congress Watch division. Follow him on Twitter at @RickClaypool.

BRCA gene

Co-authored by Adriana Benedict and Tiffany Jang

The U.S. Patent and Trademark Office (USPTO) and European Patent Office (EPO) have been granting patents on isolated human DNA since the early 1980s.  Many countries have followed their lead.

More than three decades later, the U.S. has become the first country to reject the patent eligibility of isolated DNA following last week’s Supreme Court ruling in Ass’n of Molecular Pathology v. Myriad Genetics.  Will its opinion have any global ripple effects?

The USPTO has promoted harmonization with its standards of patentability through training and technical assistance programs since 1985.  USPTO patent standards have spread in part due to a partnership established between the USPTO, EPO and Japanese Patent Office (JPO) in 1983.  As noted by the Australian Law Reform Commission, in 1988, these Trilateral Offices issued a joint statement explaining that

Purified natural products are not regarded as products of nature or discoveries because they do not in fact exist in nature in an isolated form. Rather, they are regarded for patent purposes as biologically active substances or chemical compounds and eligible for patenting on the same basis as other chemical compounds.

In response to some uncertainty regarding claim drafting for isolated DNA sequences, the USPTO Manual of Patent Examination and Procedures was updated in 1990 to provide clear guidelines to this effect. Similarly, the JPO’s Implementation Guidelines for Inventions in Specific Fields explicitly provides that isolated genes are patentable; and in the E.U., isolated DNA is patentable under Biotechnology Directive 98/44/EC (although patents on isolated DNA may only be issued in the E.U. if the inventor can show that the genetic sequence exhibits surprising or unexpected properties).  Importantly, the European Commission was influenced by the U.S.’s acceptance of gene patents in its deliberations leading up to the directive.  When it proposed the Biotechnology Directive in 1988, it noted:

[W]hereas the two leading nations in biotechnology, the United States of America and Japan, have been able continuously to adapt their patent protection according to the latest needs of industry, science and consumers, the Member States, representing comparable potential of intellectual manpower and capital, are immobilized by a not yet completed and . . . outdated legal framework.

Other countries have followed suit.  Isolated DNA sequences are patent eligible in Canada as biomolecules, and the Intellectual Property Office of Singapore recognizes patents on genes, in accordance with Howard Florey Institute [Relaxin].  In February of this year, the Federal Court of Australia held that isolated DNA is patentable under the Statute of Monopolies because it embodies a chemical compound, and thus is a “manner of manufacture,” rather than genetic information.

But the Supreme Court is forcing the USPTO to reverse course. In the long-awaited Myriad opinion, the U.S Supreme Court ruled late last week that isolated human DNA is not patentable subject matter because it is naturally ocurring, while complementary DNA (cDNA) is patentable subject matter because it is not naturally occurring. cDNA is a synthetic form of DNA that does not contain introns (nucleotide sequences that don’t encode for proteins), while isolated DNA is composed of exons (protein-coding nucleotide sequences) interspersed with introns.  Because both isolated DNA and cDNA have important research applications, the Supreme Court’s decision in Myriad will have an enormous impact on the future of biotechnology, biomedical research, and diagnostic and therapeutic efforts.

Prior to Myriad, the recognition of human genes as patentable subject matter meant that the owners of patents on isolated DNA could hold monopolies on the genetic information embodied in DNA sequences, raising the cost of access to this information for both patients and scientific researchers. This led to a concern that, among other things, exclusively licensed patents on isolated DNA stood in the way of patient access to secondary opinions confirming the results of genetic tests.  To address this concern, the America Invents Act had directed the USPTO to explore this challenge and propose possible solutions to it; the USPTO’s final report, however, was delayed more than a year and has yet to be released.   

Under common law precedent regarding 35 U.S.C. § 101’s definition of patentable subject matter, laws of nature, products of nature and abstract ideas cannot be patented in the U.S.  As explained in Mayo v. Prometheus, laws of nature constitute “the basic tools of scientific and technological work.”  In addition to playing a major role in the Supreme Court’s ruling in Mayo last year, the law of nature exception has a long history of Supreme Court precedent, including Mackay Radio & Telegraph Co. v. Radio Corp. of America, Funk Bros. Seed v. Kalo Inoculant, and Parker v. Flook.  Indeed, even in Diamond v. Chakrabarty, the case considered to have paved the way for gene patents, the Court expressly stated that “laws of nature, physical phenomena, and abstract ideas have been held not patentable.”  Prior to today’s ruling, it was the long-held practice of the U.S. Patent and Trademark Office (USPTO) to grant patents on isolated DNA. It had been widely believed that because human DNA does not exist in nature in isolated form, isolated DNA could be patented on the grounds that it is a product of human ingenuity.

Petitioners in Myriad challenged the legality of Myriad’s patents on BRCA1 and BRCA2 genes, mutations of which are known to be associated with heightened risk of breast and ovarian cancer. Myriad’s patents on isolated DNA had originally been struck down by the Southern District of New York in a ruling that was later reversed and subsequently affirmed after being remanded by the Supreme Court.  In a unanimous holding (with the exception of some minor concurrences by Justice Scalia on biological explanations), Justice Thomas explained that isolated human DNA is not patent eligible subject matter under § 101 because it constitutes a law of nature.  Specifically, the Court explained that:

  1. Myriad did not invent anything by isolating or locating the BRCA1 and BRCA2 genes, but rather identified what already exists in nature;
  2. the relevant “patent descriptions simply detail the ‘iterative process’ of discovery by which Myriad narrowed the possible locations for the gene sequences that it sought;
  3. the claims at issue cover the information contained in a genetic sequence rather than chemical compositions themselves; and
  4. deference to past USPTO practice was not persuasive in the absence of explicit statutory support for the patentability of isolated genes, which is absent from Title 35 of the U.S. Code.

In contrast, the Court explained that cDNA—with the exception of very short strands free from intervening introns—is patentable because it differs from naturally occurring DNA, which contains both introns and exons.

Myriad paves the way for increased competition in the provision of genetic tests for BRCA1 and BRCA2 mutations because Myriad will no longer have a monopoly on all research and diagnostic methods that use the isolated BRCA1 and BRCA2 nucleotide sequences.  On the coattails of the Court’s ruling, many diagnostic companies and research institutions such as Ambray Genetics and the University of Washington announced their intentions to incorporate BRCA1 and BRCA2 into their next-generation sequencing panels, significantly reducing the cost of BRCA1 and BRCA2 diagnostic testing.  Similarly, GeneDX has announced its plans to launch comprehensive genetic testing for hereditary cancers, and DNATraits has said that it will provide a test for $995, less than a third of the cost of Myriad’s test. There has also been speculation that whole genome sequencing will become easier without Myriad’s patents on isolated BRCA1 and BRCA2 sequences. However, Myriad will retain its monopoly over BRCA Analysis, the only test currently used worldwide for determining susceptibility to hereditary breast and ovarian cancer based on an analysis of BRCA1 and BRCA2 mutations.  Additionally, Myriad will retain a monopoly on all research that involves the cDNA of BRCA1 and BRCA2, which includes many research methods that use a probe to assay for gene expression.

Following in the footsteps of Mayo v. Prometheus and Bilski v. Kappos, Myriad is the third case since 2010 in which the Supreme Court has used subject matter eligibility to limit long-standing practice of the USPTO.  This apparent trend demonstrates the risk in exporting the maximum reach of U.S. law and practice at any given time via the USPTO and trade agreements negotiated by the office of the U.S.  What is clear for now, however, is that the Supreme Court is scaling back on the maximalist tendencies of U.S. patent policy, referred to by some as the global IP ratchet.

Will other countries once again follow suit?



Our Trans-Atlantic Call for Exclusion of Intellectual Property from EU-US Trade Talks

US trade policy is currently focused on the Trans-Pacific Partnership (TPP), for which President Obama hopes to complete negotiations by October. If the agreement is concluded according to plan, the TPP will include the United States, Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Malaysia, and Vietnam.  Japan is signaling its interest to join and Korea would possibly follow Japan. The treaty would remain open for other countries to join as well, so long as they meet the required standards.

Meanwhile, along the Atlantic, the US is preparing to launch negotiations for a Transatlantic Free Trade Agreement (TAFTA)—or what is being touted as the Transatlantic Trade and Investment Partnership (TTIP).

The establishment of a Trans-Atlantic partnership is not a new idea; the possibility of creating a Trans-Atlantic Free Trade area had been discussed occasionally in the past, especially during the 1970s and 1980s. However, informal discussions failed to solidify into something more concrete.

The United States and the European Union have both entered into economic partnership agreements across the globe, but never before with each other. In 2011, American and European politicians keen on “shaping globalization” (i.e. setting rules for the 21st century) outside the official global forums set up the High-Level Working Group on Growth and Jobs (HLWG) to assess the feasibility of a comprehensive transatlantic trade agreement.  The deal between the world’s two most important economic powers hopes to be a “game-changer.”

The BRICS countries — Brazil, Russia, India, South Africa and perhaps most notably China – have not been invited to either negotiation. It may be the case that these deals aim to better prepare the EU and the US for an upcoming economic battle with the BRICS and other emerging powers.  The BRICS countries have a combined GDP now equivalent to that of the EU or the US.  “This is about the weight of the western, free world in world economic and political affairs,” declared EU Trade Commissioner De Gucht.

The HLWG released its interim report in 2012 identifying policies and measures to increase EU-US trade and investment. The interim report noted that, “it would not be feasible in negotiations to seek to reconcile across the board differences in the IPR obligations that each typically includes in its comprehensive trade agreements.”

However, industry groups soon realized that the so-called Trans-Atlantic Free Trade Agreement presents a perfect opportunity to set “golden standards” for IP regulation and enforcement, which emerging markets like China and India could then be pushed to accept. Groups like PhRMA urged the EU and US to include IP to further strengthen the international regime. Eventually, the HLWG changed its position and is now recommending the inclusion of an IP chapter, although a “limited” one. The Final Report issued by the HLWG recommends that TAFTA negotiations “address a limited number of significant IPR issues of interest to either side, without prejudice to the outcome.”

It is not clear what the HLWG is trying to say. The US and EU regimes are not alike. Geographical indications, for instance, continue to create a transatlantic trade conflict between the US and EU. They have fundamentally different philosophies on the issue.  The EU is committed to enhancing its vast gastronomic heritage of excellence, and pushes for more restrictive rules. The US wants to maintain the status quo to help giant companies like Kraft sell items like “parmesan” cheese around the world.

Any attempt to boost patent or copyright rules in favor of rights holders and against the interests of consumers would be a significant mistake and invite major public resistance. The defeat of ACTA in the EU and the overnight death of SOPA in the US were no accidents. They should serve as a stark reminder to policymakers on either side of the Atlantic.

It goes without saying we will not hold back from raising our voices once again in defense of our fundamental rights to free speech and health, and to uphold the benefits of an open knowledge economy.

To read the declaration of  transatlantic coalition of 45 consumer, public health and Internet freedom groups, visit

The now widely publicized outbreak of life-threatening fungal meningitis in back-pain patients linked to steroid injections prepared by a compounding pharmacy highlights the failure of the Food and Drug Administration’s (FDA’s) regulatory oversight of drugs prepared and sold by such pharmacies. What is particularly tragic for the families of those who have been sickened or killed by the tainted drug is that this situation was completely avoidable.

The steroid injections, distributed by the New England Compounding Center in Framingham, Mass., have been linked to at least 119 infections in 10 states, and as many as 13,000 people have been exposed. The contaminated injections have been recalled, along with all other products distributed by the New England Compounding Center.

The large-scale production of a drug — in this case, a drug that is intended to be sterile and injected into patients — appears to have crossed the line from the traditionally narrow role filled by local compounding pharmacies into one that clearly involves drug manufacturing and the release of products into interstate commerce.

Indeed, prior warning letters from the FDA to the New England Compounding Center and other compounding pharmacies appear to indicate that the agency considered these pharmacies to be engaged in drug manufacturing. The pharmacies were therefore considered subject to the safety and effectiveness standards required for approval of new drugs, as well as the rigorous manufacturing standards designed to ensure that drugs are sterile and uncontaminated with such germs as bacteria or fungi before being sold and distributed.

However, the FDA failed to take action to ensure that the New England Compounding Center adhered to these drug standards, which are essential for protecting the health of patients. By not aggressively enforcing regulations related to drug manufacturing by compounding pharmacies, the FDA has perpetuated a double standard: Traditional drug manufacturers must adhere to rigorous drug-safety standards intended, for example, to prevent the contamination of their products. But so-called compounding pharmacies engaging in large-scale drug production do not. This double standard has resulted in the unfolding public health catastrophe involving hundreds and potentially thousands of patients who received steroid injections for back pain.

Congress should conduct an investigation into this tragic situation and hold oversight hearings as soon as possible. If current statutes and regulations provided the FDA with authority to prevent this disaster, senior FDA officials should be held accountable. If holes in the agency’s existing legal authority are identified, Congress should act immediately to pass legislation to remedy the situation.

Dr. Michael Carome, Deputy Director of Public Citizen’s Health Research Group

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