Biotech Legislative Agenda: Healthcare, Energy, Patents And Capital

The United States Congress and US biotechnology industry are currently focused on healthcare reform, but biotech is also looking to the future at energy reform, patent reform and other intellectual property-related legislative priorities still on its agenda.

Biotechnology Industry Organization President Jim Greenwood recently told reporters that healthcare reform must ensure affordability and accessibility, as well as an innovation-friendly environment. A 12-year date exclusivity window for biologic drugs is currently included in several healthcare reform bills. That is the time biotech wants before generic firms can start producing similar drugs, or biosimilars.

The Pharmaceutical Research and Manufacturers of America (PhRMA) claims that in the last five years, its companies have invested nearly $284 billion in research and development of new medicines, and that it takes an average of 10 to 15 years and $1.3 billion to develop just one new drug.

A group of 10 state governors on 29 September wrote [pdf] to congressional leaders urging them to maintain the 12 years.

“We’re going to make sure that provision stays in the health care bill as it moves forward,” Greenwood said.

Consumer groups and the Generic Pharmaceutical Association are hoping the 12 years is reduced through floor amendments before the bill’s final passage. They argue the long period facilitates innovator companies’ monopolies, and with less generic competition, healthcare costs will rise even more.

“Medicare and other federal programs will find their budgets increasingly strained by growing biologic drug costs,” Essential Action wrote in a briefing paper. “Employers will continue to struggle to provide affordable health insurance to their employees. Americans with insurance will find it even more difficult to pay for their already sky-high prescription drug co-payments. And the uninsured may have to go without crucial lifesaving biologics.”

US Health and Human Services Secretary Kathleen Sebelius told the Generic Pharmaceutical Association (GPhA) this month that the Obama administration is committed to pushing only seven years’ exclusivity, and that it opposes evergreening, when a product receives more patent protection for slight changes to its makeup.

Patent Reform

There has been no major action on patent reform in recent months. A letter from the Obama administration – perhaps from new US Patent and Trademark Director David Kappos – to Congress outlining principles for patent reform is expected soon.

[Update: the letter was issued on 5 October, available from the Judiciary Committee here. Bill sponsor Sen. Patrick Leahy (Vermont Democrat), Senate Judiciary Committee chairman, said with the administration’s support, he hopes to schedule Senate debate before year’s end.]

Kappos said last month that patent reform is one of the “highest priorities” for him and Commerce Secretary Gary Locke. “You can expect we will be strongly in favour of reform now,” Kappos said. “The time is now to get patent reform done.”

Five members of the Senate Republican High Tech Task Force on 30 September sent a letter [pdf] to Senate Judiciary Chairman Patrick Leahy (Vermont Democrat), and Ranking Republican Jeff Sessions of Alabama asking them not to weaken patent protections in S. 515, particularly on issues such as patent quality, how courts should calculate infringement damages, wilful infringement, and choice of venue for lawsuits. This letter was cheered by groups such as the Patent Fairness Coalition.

Biotech groups and companies like Amgen hope the Senate Judiciary Committee will pass something this autumn like the (senators) Feinstein-Specter compromise as the final bill, which included “gatekeeper” language that guides how damages are awarded. Talks continue with Republicans on post-grant review and some other technical tweaks.

“We hope Congress is able to pass a patent reform bill that preserves the incentives to innovate that have allowed the US biotechnology industry to bring life-saving cures and treatments to patients,” said Amgen spokeswoman Emma Hurley.

Energy Reform

Democratic Sens. Barbara Boxer of California and John Kerry of Massachusetts last week introduced their “Clean Energy Jobs and American Power Act,” which mandates by 2020 to curb the nation’s greenhouse gas emissions by 20 percent from 2005 levels. The House passed its bill, HR 2454, in June.

“We’re convinced that if we’re going to significantly reduce greenhouse gases in the decades to come that biotech has the answers and approaches to do that,” Greenwood said. “You’re not going to get to a lesser carbon, lower carbon basis for the long run unless we use cellulosic ethanol, unless we use algae, unless we use other additional approaches to energy that we think will only come from, or largely come from, the world of biotechnology.”

Biotech’s Economic Crisis; Innovation/Global Health

With the downswing in the economy has also come a downswing in funding for the biotech sector. Biologic drug industry sources say that about 80 percent of the biotech sector is still not profitable and it highly relies on venture capital. There hasn’t been a significant biotech IPO in two years, and some predictions say up to 250 publicly traded biotech firms could go under by the end of this year. Although there has been some thawing of the capital markets and money raised for clinical trials for cancer and osteoporosis drugs, among some others, the 12-year exclusivity period is one large incentive that could spur more investment in biotech drugs, industry argues.

BIO Ventures for Global Health (BVGH), a non-profit that works with the biotechnology industry to create new medicines for neglected diseases in the developing world, is watching how various proposals, including biologics, will affect global health.

Another issue BVGH is concerned with is priority review vouchers (PRVs). Congress granted the Food and Drug Administration authority to issue PRVs to encourage investment in the development of drugs and vaccines. It essentially gives PRV-receiving companies faster review for possible treatment of drugs like malaria, tuberculosis and leprosy. But there are two main sticking points to effective implementation. One is the transfer of vouchers from company to company; the FDA currently says only one transfer can occur. Another problem is that the FDA will not issue a PRV for a product that uses a previously licensed component for a new version of a drug.

“That’s a real issue for a lot of these drugs because of drug resistance,” explained BVGH interim CEO Melinda Moree.

Drug companies like GlaxoSmithKline have also advocated voluntary patent pools to spur development of new treatments for the poorest parts of the globe. GSK earlier this year vowed to contribute patents for technologies that could help treat certain diseases. Massachusetts-based Alnylam. Pharmaceuticals became the next company to contribute more than 1,500 issued or pending patents on its RNA interference (RNAi) technology; another major drug company may soon join the pool. Doctors Without Borders (Médicins Sans Frontières) on 30 September urged nine of the world’s largest drug companies to pool their patents on certain HIV drugs.

“This has the potential to grow and really become something,” Moree said. “By these groups putting their patents out there, it really clears the way for people to think of new ways of doing work.”

On the international front, BIO also applauded the Obama administration’s new initiative (video here) to increase global food supplied by 50 percent over the next 20 years with the help of new technologies and infrastructure. BIO says agricultural biotechnology has an important role to play to help farmers grow food more sustainably and enhance the nutritional content of foods.