Reports: Obama’s Proposed 2014 Budget Favours Patent Office, R&D, Generic Drugs

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US President Barack Obama yesterday released his proposed budget for fiscal year 2014, and according to early reports it would give the US Patent and Trademark Office (USPTO) control over its revenues, and would be mixed for the biopharmaceutical industry while taking several steps to boost generic medicines.

The overall budget asks for US$3.77 trillion. It is sent to Congress for modification and approval before the fiscal year starts on 1 October.

The Intellectual Property Owners Association reported that the proposed budget includes authorisation for the USPTO to spend up to US$ 3.071 billion, with access to all user fees it collects in 2014. Keeping its fees was a contentious issue in the past. IPO said the budget states that the USPTO will continue “aggressive” patent pendency efforts.

One news report said that the proposed budget would: ban “pay-to-delay” agreements that delay generic drugs’ entry onto the market; reduce the period of exclusivity for biologics from 12 years to 7 years, as well as prevent evergreening of biologics; and refine the definition of branded drugs while excluding generic drugs from certain calculations on branded drugs. In addition, the budget would promote generic medicines for low-income beneficiaries through differences in co-payments. The total savings from these measures was calculated at some $30 billion.

Another news report said the budget would give benefits to small biotech companies, would institutionalise an R&D tax credit, and increase funds to the Food and Drug Administration (though with a $15 million decrease in budget authority for its drug, biologics and medical device programs).

The proposal also would increase overseas inspections of foreign drugmakers and clinical trial sites, such as in China, and includes “reforms that would prevent multinational drugmakers from shifting profits overseas in an effort to avoid US taxes,” the report said.

And according to the New America Foundation, the budget would add $66 million to reach a total of $215 million for a schools programme aimed at innovation. Almost all of the increase would go to a programme called Advanced Research Projects in Agency Education (ARPA-ED) modeled after similar efforts in the Departments of Defense and Energy.

The White House Office of Science and Technology Policy reported that overall funding for R&D would increase by more than one per cent, to more than $140 billion.

The Commerce Department (including USPTO) budget proposal is here [pdf].

The full White House budget is available here.

William New may be reached at

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