BioWorld Today Columnist
After spending 31 years in Washington, BIO's first president is happily ensconced in Ketchum, Idaho. I wouldn't describe Carl Feldbaum's current state as "retired," though he has attained the title of "president emeritus" of BIO.
I caught up with him last week, before BIO's Annual International Convention kicked off in Philadelphia. Since BIO's formation as an effective lobbying group in 1993, the meeting has been an ever-expanding opportunity for established and novice biotech aficionados to meet and greet.
I have vivid memories of the very first BIO convention, held in North Carolina. Two small trade associations, the Association of Biotechnology Companies and the Industrial Biotechnology Association, finally had been brought together after years of being mechanisms for Amgen and Genetics Institute to fight patent battles over erythropoietin.
As then-editor in chief of BioWorld, I listened to congressional aides and members of the president's Council on Competitiveness complain bitterly that they could not get either of those two groups to provide useful guidance on legislative actions that might support the still-emerging young industry.
The legislature was hearing plenty from groups concerned about genetic engineering of bacteria, crops and animal cells, with Jeremy Rifkin's Foundation on Economic Trends leading the anti-biotech movement. Aides had all read the attention-grabbing "Bitter Harvest" report condemning ag-biotech as a cynical tool for big chemical companies to prosper while poisoning the world.
By not engaging directly in the political debate, the fledgling biotech industry was risking legislative rulings without its input.
That all changed when Feldbaum took the helm of a united trade association. His years inside the Beltway gave him the political acumen to shape BIO into a supreme lobbying machine just in time to participate in the 1994 debate on the Clinton health care reform plan.
A key component of that plan was a focus on the prescription drug industry as villains, with price control as an important aspect of reform to make and keep health care affordable for all. BIO took a strong stand against drug price controls, and successfully convinced the D.C. crowd that the biotech industry was distinct and different from big pharma.
Hmmmm, that sounds really familiar. Here we are, a decade later, and a very similar argument is under way.
The ante has been upped considerably by important drugs being pulled off the market and a seemingly constant barrage of charges that big pharma companies have been hiding clinical data and using marketing and advertising unethically, coupled with studies showing Americans distrust pharma companies and are being bankrupted by medical problems (even when insured). Politicians all over the U.S. are drawing vivid pictures of drug companies forcing old ladies to take long bus rides to Canada to get their medicine.
Can BIO Do The Trick Again?
I went back to Feldbaum, now out of the Beltway but clearly still involved with biotech. Feldbaum serves on the board of Connetics Corp., of Palo Alto, Calif., and Actellion Ltd., of Basel, Switzerland, and is on the boards of two non-profit spinouts from BIO - the Biotechnology Institute, an educational foundation devoted to training and educating teachers and students, and BioVentures for Global Health, which wants to help the industry address neglected diseases in the developing world. He also works with BioIdaho, a state affiliate of BIO that is looking for ways to use biotech as an economic development tool.
Regarding the current challenging environment, he still believes that biotech is seen as distinct from its big pharma brethren.
"It's hard to argue that the current public perception of the pharmaceutical industry is not low. But when you say biopharma - don't push that too hard. The current low standing of the pharmaceutical industry has not yet rubbed off on what people perceive as the biotech industry. Certain biotech companies have economically entered big pharma realm, but they still have a distinct identity and are not carrying as much baggage."
Feldbaum doesn't see that as a permanent state of Teflon. "There is a danger of that baggage being transferred to the biotech sector. I think biotech has to do a number of things to anticipate the threat of losing public support and the implications of that. First, the value proposition of our drugs need to be explained ever more thoroughly - not just the initial price, but the value to patient, their families, to the work force of prolonging life and improving quality of life.
"Second, we need to continue as the thought leader and convener of disparate groups who at some point may challenge this value proposition. Women and minority health groups, religious groups - biotech needs to take a much broader approach and make contact with the wider spectrum of society that votes and speaks out, affects politicians.
"My sense watching the pharmaceutical industry operate was that it fairly narrowly devoted lobbying efforts to protecting its sales. It did that reasonably well with Congress. But in the meantime, public support dwindled among the patients. Ultimately, that has come back to haunt them.
"We need to take a lesson from that strategic error. BIO is headed in the right direction, devoting more resources to Congress and FDA. We must continue to cast our net widely so that key constituent groups don't turn against the industry.
"Bioventures for Global Health, for example, devotes resources to underserved areas of the globe. If we are able to contribute to cures for malaria, TB, other key infectious diseases, that will lead to real support, and firmer political support, as well.
"The stem cell controversy indicated there is a more significant groundswell of potential grassroots support for research than many had imagined - not just in California, but elsewhere. Finding the appropriate way to turn that groundswell into more stable support is something the industry needs to do in the next immediate years.
"The value proposition of your product is critical. Mark McClellan [administrator at Centers for Medicare & Medicaid Services] is up to his eyeballs in working through a new calculus of benefit vs. cost. McClellan is an activist, a formidable force. Companies will have to work with him. It won't be enough to say, We need absolute freedom on reimbursement issues because our research is expensive.'
"One of the broad political themes in the U.S. today is an underlying disrespect and some disillusionment with the behavior of corporations. We've seen in the legislative realm how the Enrons and ImClones have led us to outcomes that are expensive for young companies - Sarbanes Oxley, for example.
"So far, the biotech industry has not shouldered the brunt of that disillusionment. We are still seen as innovative job creators, useful to society. Certainly as more products come through the pipeline, pricing issues will come to the fore and we need to be prepared to respond.
"In the near-term, I don't believe Soviet-style drug pricing will happen. I am optimistic that we will create a modus vivendi [a temporary agreement between contending parties pending a final settlement] with CMS and other payors that will work for some period of time, maybe years, before a new balance gets struck. That's the legitimate dynamic between government and industry. This process was already starting when I left Washington. While I am optimistic that the modus vivendi will allow the biotech industry to develop drugs and prosper, not everybody will be pleased and the threat of drug pricing is always there.
"People don't want to lose this sector. It's important in terms of products and jobs. It will take many elements to continue to maintain the high level of public and political support we've had so far. We've seen the ethical issues come into the forefront with stem cell issues. One of my big concerns is that it's hard to control what happens off-shore [such as embryonic stem cell treatments not fully developed under rigorous regulation]. The whole cloning/stem cell controversy has acted as a bellwether to let biotech know these are issues that affect the perception of our industry and our ability to develop the science."
Feldbaum is confident that BIO and its member companies are moving proactively into the new phase of political and societal development. We will be watching.
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