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Dec 26, 2011

Obama Administration’s Support During 2011 for Biotech Yields Mixed Results

President had success with finalizing patent reform after decades of debate but still has to address other concerns like the budget.

Obama Administration’s Support During 2011 for Biotech Yields Mixed Results

President Obama has certainly taken steps to position himself as a champion of the biotech industry, but whether Congress follows suit and delivers is yet to be seen. [© XtravaganT - Fotolia.com]

  • As his re-election campaign kicks into high gear over the next several months, President Barack Obama and his administration can be expected to express fervent support for the biopharma industry and point to several accomplishments to that effect.

    A look at the results shows some progress. It remains to be seen, though, if any of the President’s accomplishments will produce the long-lasting change that the biotechnology and pharmaceutical industries have long sought from Washington.

    The enactment of patent reform marks a significant milestone for the biotech industry. On the other hand, however, the still pending budget for fiscal year 2012 and the lack of final details for biosimilar development is creating an air of uncertainty for the sector.

  • Patent Reform

    The most significant Obama administration accomplishment from a legislative standpoint was its enactment on September 16 of the Leahy-Smith America Invents Act of 2011. The biopharma industry’s top two trade groups—the Biotechnology Industry Organization (BIO) and Pharmaceutical Researchers and Manufacturers of America (PhRMA) —got behind the measure, which delivered the most sweeping overhaul of U.S. patent law in more than half a century.

    Chief among amendments is the change in how patents will be issued, from first-to-invent to first-to-file. First-to-file theoretically benefits whichever inventor or company is first to get their application in to the PTO by sparing them from litigation to resolve who was first to develop an invention. But in practice, biotech and pharma giants will benefit since they are more likely to be able to afford staffs of lawyers specializing in rushing patent applications, while start-up CEOs usually must juggle IP management with duties ranging from basic science to fundraising to facility oversight and commercialization.

  • Fiscal Budget

    The administration performance on legislation pertaining to the federal budget has met with fewer kudos from the biopharma sector. Last month, Obama enacted a $128.1 billion portion of the budget that included a 1.8% increase over FY 2011 for FDA, to $2.497 billion of discretionary funding.

    And last Friday, just before Christmas, he signed the roughly $1 trillion spending package for federal fiscal year 2012. It will increase spending for NIH by 1%, or $240 million, to $30.6 billion, after accounting for a 0.189% spending cut across all Labor-HHS programs. It’s a far cry from the $31.7 billion sought by the president and supported by the House of Representatives. The administration might argue that those small increases are no small feat given all the talk about the need to cut spending in order to end trillion-dollar deficits.

    “We definitely appreciate the efforts of the Labor-HHS committee chairmen Rep. Denny Rehberg (R-MT) and Sen. Tom Harkin (D-IA) to ensure that there was a small increase, especially in this extremely challenging fiscal environment, but we continue to lose ground when you factor in biomedical inflation,” Jon Retzlaff, managing director of science policy and government affairs for the American Association for Cancer Research (AACR), told GEN. “NIH is 15% below where it was over the past decade.”

  • Biosimilar Regulation

    President Obama also didn’t fare so well on the biosimilar front. He proposed to the unsuccessful Joint Select Committee on Deficit Reduction, or “supercommittee,” that the exclusivity period during which generic companies are barred from introducing biosimilar products be reduced from twelve to seven years.

    While the president trumpeted potential savings of $3.5 billion to Medicare and Medicaid over 10 years, some 50 members of Congress sided with industry groups. In defending the 12-year period, they said that the shorter period would hamstring innovation and even cause U.S. biotechs to flee overseas. They argued it takes 11.5 years for generic drug makers to produce biosimilars anyway.

  • Human Embryonic Stem Cells

    Also on the policy side, the Obama administration stepped up NIH’s endorsement of human embryonic stem cell (hESC) lines that are eligible for federal funding. Two such lines were approved on December 12—CA1 and CA2, both provided by Andras Nagy, Ph.D., senior investigator at Mount Sinai-Samuel Lunenfeld Research Institute—raising the total number of government-allowed hESC lines to 138. So far this year, NIH has endorsed 52 hESC lines, compared with 46 in 2010 and 40 in 2009.

    The administration scored a victory in the ongoing Sherley et al. v. Sebelius et al. court case concerning federal funding of research on hESCs. On July 27, Judge Royce C. Lamberth of the U.S. District Court for the District of Columbia sided with co-defendants HHS, HHS secretary Kathleen Sebelius, NIH, and NIH director Francis S. Collins, M.D., Ph.D., allowing federal money to continue to flow toward hESC research. Three months earlier, the U.S. Court of Appeals for the D.C. Circuit overturned a preliminary injunction issued by Lamberth that temporarily blocked federal funding of hESC research. The case is now before the D.C. Circuit, which is expected to issue a decision in 2012.

    Co-plaintiffs James L. Sherley, M.D., Ph.D., an adult stem cell researcher at Boston Biomedical Research Institute, and Theresa Deisher, Ph.D., managing member and R&D director of AVM Biotechnology, have argued that the hESC research permitted by NIH issued guidelines “inevitably creates a substantial risk—indeed, a virtual certainty—that more human embryos will be destroyed in order to derive more hESCs for research purposes.” That risk, they have contended, violates the Dickey-Wicker Amendment of 1996, which holds that it is illegal to use federal funds for research “in which a human embryo or embryos are destroyed, discarded, or knowingly subjected to risk of injury or death greater than that allowed for research on fetuses in utero.”

  • Leveraging Biotech in Politics

    President Obama’s administration has certainly taken steps to position itself as a champion of the biotech industry. During his January 25 State of the Union address, the president highlighted a 55-year-old mother of two who was pursuing a biotech degree at North Carolina’s Forsyth Technical Community College.

    Earlier this month the administration ended a public comment period for the proposed National Bioeconomy Blueprint. The administration received 134 submissions from biopharma companies, research institutions, universities, and individuals for topics that should be covered in the blueprint. President Obama has said that the final plan will emerge in January 2012.

    The Blueprint is intended to detail measures for applying biological research innovations toward national challenges that include health, food, energy, and the environment. It will go a long way to articulating a life science strategic plan for the nation. It will also add a significant legacy-building portion to Obama’s second-term agenda.

    How helpful do you think the Obama administration has been to the biopharma industry?


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