By Kim Coghill

Washington Editor

WASHINGTON ¿ Biotechnology companies developing countermeasures for bioterrorism stand to gain if any one of three pieces of legislation introduced in Congress during December meets approval.

Two bills have been introduced in the Senate, while a third, sponsored by Reps. Billy Tauzin (R-La.) and John Dingell (D-Mich.), passed in a 418-to-2 vote in the House.

The House bill (HR 3448), known as ¿The Public Health Security and Bioterrorism Response Act of 2001,¿ authorizes more than $1 billion in grants to states or local governments for planning and preparedness activities, including developing drugs, therapies or vaccines to fight bioterrorism or other public health emergencies.

While the Washington-based Biotechnology Industry Organization (BIO) said the Tauzin-Dingell legislation leans in the right direction for drug developers, BIO is particularly excited about a bill introduced by Sen. Joe Lieberman (D-Conn.).

¿The specific purpose of the Lieberman bill is to remove the obstacles for biotech companies that want to step up to the plate and produce products that are countermeasures,¿ Michael Werner, BIO¿s vice president for bioethics, told BioWorld Today. ¿The advantage of the Lieberman bill over the Kennedy-Frist bill [introduced in the Senate earlier this month] or the bill that passed in the House [Tauzin-Dingell], is that it has provisions that indemnify companies in litigation and the other bills don¿t have that.¿

Specifically, the Lieberman bill provides for protections against liability for any company that successfully develops a countermeasure.

For companies and investors wary of entering the countermeasure business because there¿s no established or predictable market, the legislation contains a provision authorizing the government to purchase drugs at a pre-established price in a predetermined amount.

On the tax front, biotechnology companies with less than $750 million in paid-in capital would be eligible for one of three incentives: the company could receive a refund for net operating losses to fund the research; the company would be eligible to establish a research and development limited partnership to conduct research that extends all business deductions and credits to the partners; or the company would be eligible to issue a special class of stock for the entity to conduct the research. Investors would be entitled to a zero capital gains tax rate on any gains realized on the stock.

¿There have been bills over the years that were designed to encourage investment in biotechnology or to help the companies,¿ Werner said. ¿What Sept. 11 did was, in many ways it kind of became the catalyst and made people recognize that No. 1, we face a threat, and No. 2, the biotech industry is a permanent part of the public health infrastructure and that there are ways the government and industry can partner to try to respond to or prevent the threat. The Lieberman bill is an example of that.¿

But once Congress begins debating the issue, Werner is quick to point out that final legislation could end up resembling any number of possibilities.

One such possibility is the Kennedy-Frist bill, authored by Sens. Edward Kennedy (D-Mass.) and Bill Frist (R-Tenn.). The ¿Bioterrorism Preparedness Act of 2001¿ provides federal assistance to state and local governments to help them prepare for a biological attack; increases incentives for rapid development and manufacture of therapies, vaccines and medical supplies; and contains provisions to enhance safety of the food supply and to improve emergency responsiveness at the state and local level.

The Kennedy-Frist and Lieberman bills could be voted on this week or carried over until January.

Regardless of what happens in the Senate, the Tauzin-Dingell bill already has some powerful support. President George Bush released a prepared statement saying, ¿Their legislation includes many of my priorities, including proposals to expand the pharmaceutical stockpile, increase our supply of smallpox vaccines, strengthen state and local preparedness, and improve the safety of our food supply.¿

Bush said he looks forward to reaching a ¿bipartisan consensus¿ on the bioterrorism legislation.

Aside from the $1 billion in state and local grants, the Tauzin-Dingell bill gives the Centers for Disease Control and Prevention $450 million to upgrade its capacity to deal with public health threats, and as mentioned by Bush, it authorizes more than $1 billion for the secretary of Health and Human Services to expand stockpiles of medicines and other supplies (including the smallpox vaccine).

It also establishes a national database of dangerous pathogens and imposes new registration requirements on all possessors of the 36 most deadly biological agents and toxins and mandates new safety and security requirements.

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