Despite escalating criticism of exorbitant prices for new drugs and biotech therapies, coupled with demands for access to
cheap imports, policymakers continue to support the development of new biomedical products, especially those that combat life-threatening
diseases and terrorist threats. The need to maintain incentives for biotech innovation, while addressing such hot-button issues
such as follow-on generics and Medicare reimbursement, will challenge Rep. James Greenwood (R-Pa) as he becomes the head of
BIO (see "Greenwood to Lead BIO").
Promoting CountermeasuresOne main goal of the Bush administration is to encourage private sector development of new vaccines and treatments to protect
against biological warfare. After almost two years of disputes and delay, Congress approved Project BioShield in July, and
President Bush signed the bill soon after. The legislation provides $5.6 billion over 10 years to stockpile vaccines and other
countermeasures to biological and chemical warfare. The bill also permits the National Institutes of Health (NIH) to expedite
approval of grants for countermeasure R&D, gives FDA authority to allow emergency use of not-yet-approved treatments, and
encourages speedy FDA approval of these products. FDA is urging manufacturers with investigational new drugs (INDs) that may
be bioterror countermeasures to come in for "pre-pre-IND" meetings to ensure that researchers conduct necessary analyses in
While the bill was delayed for months due to a dispute over budget control, officials at the departments of Health and Human
Services (HHS) and Homeland Security (DHS) have been negotiating preliminary agreements with manufacturers for new countermeasures.
One major project will provide $700 million to purchase 75 million doses of an improved anthrax vaccine made with recombinant
technology, high-volume fermentation, and modern protein purification methods. A related initiative seeks to acquire antitoxin
treatments for inhalation anthrax disease, including monoclonal anti-PA antibodies, polyclonal anti-anthrax antibodies, and
human immunoglobulin. HHS also is seeking antidotes and other products to treat and protect against smallpox, botulism, plague,
Ebola virus, and radiation from "dirty bombs."
Missing ProtectionsAlthough the legislation offers incentives for manufacturers developing these products, it has a serious shortcoming from
industry's perspective: it fails to include liability protections for companies if bioterror vaccines or drugs cause adverse
events. And because the federal government is the main customer for countermeasures, manufacturers expressed concerns about
regulated prices and lower return on investment in this field. Big pharma companies are generally delaying major investment
in bioterror contracts, leaving the field to smaller biotech manufacturers.
Legislators and industry are discussing a BioShield II bill to provide liability protection for manufacturers and additional
incentives for product development. Sens. Joseph Lieberman (D-Conn) and Orrin Hatch (R-Utah) expect hearings this fall on
new tax and patent provisions, such as a proposal to offer companies that develop countermeasures "wild card" patent extensions
— the opportunity to apply a two-year patent extension to an unrelated patent. Lieberman also suggested adding incentives
for developing new antibiotics, and other critical treatment categories may be included in the next bill.
Development of counter-terrorism treatments also may become a campaign issue. In June, Democratic presidential nominee Sen.
John Kerry (D-Mass) called for building a "medical arsenal of democracy" by speeding the transition from basic discovery to
clinical trials for new drugs and vaccines. Kerry has accused the Bush administration of failing to address weaknesses in
the nation's bioterrorism defenses, but his proposals for responding to biological threats appear similar to the president's.