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BIO Here and now


While patent reform may finally be coming, no one will take anything for granted until it’s signed and sealed. In the meantime though, the biotechnology industry is living with the ramifications of the last major legislative reform in the US: healthcare. Since the legislation passed in March of last year, the US Food and Drugs Administration (FDA) has been preparing guidance so that companies will be able to make applications for biosimilars. Greenwood says: “Many companies have announced their intention to get into this space, and many of those are innovative companies.” Innovator companies such as Amgen, Inc., Biogen and Merck & Co have indicated in media statements that they are considering entering the biosimilars market to compete against other biologic companies.


Alongside this, the political discourse continues to focus on how to trim the federal budget and reduce the deficit. One of President Obama’s specific suggestions in that regard was to change the data exclusivity protection term for biosimilars from 12 (as decided in the heathcare reforms) to seven years, Greenwood says. “Tat was interesting to us because, although it’s not likely to happen, it shows that not everyone in the Administration has conceded the point yet.” Alongside this, the Administration is negotiating a pacific trade agreement, and one of the key questions is whether that agreement should follow current US law. “Tere’s apparently some hesitancy,” Greenwood says.


While it is probably too early to fully assess the impact of healthcare reform on the biotech industry in the US, Greenwood is yet to be convinced that it’s been positive overall. “So far, it’s fair to say, we’ve mostly seen the costs to the industry [a new tax to help pay for wider access to healthcare], and not the benefits, but we were very pleased with the outcome on biosimilars, and we were also able to include in that bill the therapeutic project program…which has meant about 3,000 small biotech companies in the US received grants from the US Treasury of about $250000 each per project, and has been very helpful to help these companies limp through the recession.”


In recovery


Like almost every industry, biotech and life sciences


took a hit during the economic


downturn. And it’s clear that the road to recovery will be long and arduous. “It’s a mixed story,” Greenwood says. “Te stock performance of the industry has been very good, and the stocks over the course of this year so far are up about


15 percent, which is really better than almost any other sector. But some of that’s been the result of a few companies getting very good data and getting product approval.”


Additionally, the initial public offering (IPO) window has opened, with eight US biotech IPOs so far in 2011. “When you add that to the European and Chinese IPOs, there have been something like 20 globally. Tat’s good news, but most of them have not raised what they expected to from the IPOs,” Greenwood says. “Venture capital funding has been somewhat flat; better than last year, but not as good as it was prior to the recession in 2007.” He adds: “Generally speaking, things are getting marginally better, but like the US economy as a whole, and like the world economy, we have a good way to go yet.”


Medicare functions. Right now, Medicare is a straightforward reimbursement system. What the Republicans propose is to change that…to a premium support system where the government effectively subsidises Medicare beneficiaries so they can buy public insurance. Te biggest threat really is that this could lead to downward pressure on reimbursement.”


He also points to the FDA’s continuing risk aversion as a potential threat to the industry. “It’s difficult to get products approved,” he says. “Obesity is a good example. Tree products in a row were turned down for approval at the FDA due to cardiovascular issues. Until the FDA can make better risk/benefit calculations, it is going to remain a difficulty.”


See you in court


“ SO FAR, IT'S FAIR TO SAY, WE'VE MOSTLY SEEN THE COSTS TO THE INDUSTRY [A NEW TAX TO HELP PAY FOR WIDER ACCESS TO HEALTHCARE], AND NOT THE BENEFITS, BUT WE WERE VERY PLEASED WITH THE OUTCOME ON BIOSIMILARS, AND WE WERE ALSO ABLE TO INCLUDE IN THAT BILL THE THERAPEUTIC PROJECT PROGRAM…WHICH HAS MEANT ABOUT 3,000 SMALL BIOTECH COMPANIES IN THE US RECEIVED GRANTS FROM THE US TREASURY OF ABOUT $250000 EACH PER PROJECT, AND HAS BEEN VERY HELPFUL TO HELP THESE COMPANIES LIMP THROUGH THE RECESSION.”


Of course, the economy is only one of a range of factors that the industry needs to consider, even though many of the other risks have their roots in economic nervousness. “Te biggest risk we face right now is that, in an effort to achieve very deep spending cuts, both Republicans and Democrats are looking at healthcare entitlement programmes,” Greenwood says. “Tere’s a big battle now because the House Republicans propose


to fundamentally change 12 Life Sciences Intellectual Property Review 2011 the way


It is one thing to fight the biotech fight through lobbying and policy statements—and indeed, BIO seems to be doing a good job of that—but that can only be part of the strategy. Whatever the legislation, it is up to the courts to interpret it, and in the IP arena, court cases that are ostensibly about specific issues in particular industries can have wide-ranging and sometimes unforeseen implications for biotech and life sciences companies.


BIO remains active before the courts, engaging with cases from the obviously biotech-related— the Myriad gene patent case is currently awaiting determination from the appellate court—to the tangentially influential—Akamai v Limelight, which deals with how process claims can be infringed. “As oſten happens, legal developments are driven from other sectors, but could have impacts on us,” Greenwood says. “Generally, our members’ interests are aligned in cases that relate to the enforceability of patents, and the standards under which cases are decided. Sometimes, of course, we do have diversities of opinion that can make it harder to take the case.”


Looking inwards


As the US biotechnology industry continues to evolve, and alongside it


the patent system


and relevant jurisprudence, BIO needs to keep pace; that means looking at its own approach. To that end, the organisation engaged Dr Elias Zerhouni, a former director of the National Institutes of Health, to take a look at its thinking and, in Greenwood’s words, “capture every big idea”. Te Zerhouni Group is due to produce a comprehensive agenda soon that will implicate legislative initiatives and the way BIO functions as an industry body. It has engaged with everyone from biotech CEOs, to venture capitalists, to lawmakers and regulators. Tere’s plenty to do.


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