By Lisa Seachrist
Washington Editor
The biotechnology industry enjoyed significant financial and legislative success in 1999. While biotech stocks heated up, the industry¿s influence in Washington delivered significant legislative victories in the waning days of 1999.
For one, the research and development tax credit was renewed for 5 years the longest extension of the credit since it was established in 1981. The industry¿s increasing influence has led the Biotechnology Industry Organization (BIO) to consider a more active role in politics, perhaps even forming a political action committee.
¿We don¿t need to use money to gain access,¿ said Carl Feldbaum, president of BIO. ¿We¿ve been fortunate that the drama surrounding biotech issues draws them in. We may consider raising political money for some of our champions. At some point, you really had to refuse to help them.¿
Feldbaum said the plan wasn¿t set in stone, but it was something BIO had started to consider as it has grown. In any event, the issues facing the industry in 1999 from patent reform to a prescription drug benefit for Medicare beneficiaries bespoke of an industry that had started to deliver on its promises.
Patent Reform Makes The Grade
The 11th-hour passage of patent reform was the most surprising legislative victory for the biotechnology industry in 1999. The legislation, which was slipped into the Omnibus Spending Bill, established a means of restoring patent term for delays at the U.S. Patent and Trademark Office (PTO).
Ever since the enactment of the General Agreements on Tariffs and Trade (GATT) in 1994, U.S. patents provided 20 years of exclusivity for inventors from the date they filed their patent at PTO. Previously, inventors received 17 years of exclusivity from the date the patent was issued. The move prevented ¿submarine¿ patents and actually extended patent term for some inventors. While the typical patent is issued 18 months from the date it is filed, complex and often-contested biotechnology patents can take as long as a decade to be issued. The entire time the patent is being considered by PTO, the patent term is ticking away.
¿The patents that were at greatest jeopardy are the most valuable ones [because they are the most likely to be contested],¿ said Chuck Ludlam, vice president of government relations at BIO. ¿Some of these patents wind up with only five or 10 years of patent term left. This bill is vital for the breakthrough patents.¿
The 104th and the 105th Congresses attempted to rectify the patent term problem, but the efforts fell to heated partisan rancor. In the 105th Congress, the House passed patent reform legislation by the narrowest of margins, only to see the effort stall in the Senate, where Majority Leader Trent Lott (R-Miss.) failed to bring similar legislation to the Senate floor despite a near-unanimous endorsement from the Senate Judiciary Committee.
In August, it appeared the legislation had gained critical momentum when the House voted 376 to 43 to pass a bill to restore patent term on a day-for-day basis. In November, the Senate Judiciary Committee unanimously endorsed a similar bill. Once again, the bill stalled when Sen. Richard Shelby (R-Ala.) and Sen. Kit Bond (R-Mo.) opposed the bill and threatened filibuster, and Lott refused to bring the matter to the full Senate.
It was at the time BIO and other key supporters of the legislation did an end run around their Senate critics and lobbied to have the bill attached to the final spending bill via a satellite telecommunications bill.
¿That was a very long-odds political shot, but it worked at last,¿ Feldbaum said. ¿It really took a lot of last-minute persistent lobbying from a number of interested parties.¿
With patent term restoration guaranteed for delays at the patent office, Ludlam said the industry was now looking to get day-for-day restoration of patent term for delays at FDA.
Congress Fails To Act On Medical Privacy
In August, Congress missed a self-imposed deadline embodied in the Health Insurance Portability and Accountability Act (HIPAA) of 1996. Both the House and Senate conducted a series of hearings on medical privacy during the early part of the year, but the legislation eventually became bogged down over the right to private action should someone misuse medical information and a juvenile rights provision that many pro-life supporters viewed as an untenable pro-choice slant. As a result of failing to pass medical records privacy legislation before Aug. 21, 1999, HIPAA compelled the Clinton administration to promulgate regulations to protect the privacy of electronic medical records.
¿Now let me say something that is now well known,¿ Clinton said in October 1999 when he released his plan. ¿I am taking this action today because Congress has failed to act, and because a few years ago Congress explicitly gave me the authority to step in if they were unable to deal with this issue. After three full years there wasn¿t a bill passed in either chamber.¿
The regulations released in October would allow patients to review and correct their medical records. Access by and large would require patient consent and be limited to the minimum necessary rather than an entire medical record. Hampered by restrictions written into HIPAA, the administration¿s plan addresses only electronic medical records. As a result, Clinton urged Congress to pass more comprehensive legislation anyway.
¿I ask congressional leaders, please protect America¿s families from new abuses of their privacy,¿ Clinton said. ¿You owe the American people a comprehensive medical privacy law.¿
Michael Werner, bioethics counsel and director of federal government relations for BIO, said Congress appeared likely to act, if not this year, perhaps with the next Congress.
¿There was a lot of action in committee last year, so there will probably be a lot of jockeying and negotiating to reach an agreement,¿ Werner said.
Whatever agreement the legislators eventually come to, both BIO and the Pharmaceutical Research and Manufacturers of America (PhRMA) are concerned the privacy protections clearly recognize the needs of researchers to have access to medical records in order to conduct critical research. Epidemiologists and other medical researchers often study existing databases where patient information has been made anonymous in order to protect patient identities. Typically, there is an encrypted identifier used to obtain additional information about the patient.
The Clinton proposal requires all researchers using identifiable patient information to obtain either the consent of the individuals or receive an Institutional Review Board (IRB) OK to do the research without such consent. Depending on the definition of identifiable information, such measures may make some genetic and epidemiologic studies too costly to conduct.
¿The whole issue that medical information shouldn¿t be misused is something we wholeheartedly support,¿ Werner said. ¿But, we need to balance the needs for privacy with the need for researchers to get access to medical information to develop new drugs and therapies.¿
NBAC¿s Tissue Regulations Unfriendly To Research
The industry and many academic researchers are working to ensure the definitions of identifiable information the administration adopts aren¿t as restrictive as the recommendations from the National Bioethics Advisory Commission (NBAC). In August 1999, the commission completed one of its chartered goals by submitting recommendations on how to ethically conduct research on the vast troves of tissue samples that have been stored in this country over the last century.
The commission outlined a plan for modifying the ¿Common Rule¿ overseeing federally funded biomedical research to consider both coded samples and identified samples as research on human subjects requiring full informed consent and review by institutional ethics boards. NBAC considers coded samples to be the same as samples with names and addresses on them because the code is traceable. As a result, research using such materials would require IRB review and informed consent.
¿The definition of what¿s identifiable is the crux of the issue,¿ said Gillian Woollett, associate vice president for biologics and biotechnology at PhRMA. ¿We would argue that you need to put a tremendous amount of responsibility on the keyholder, not the researcher receiving the coded samples. It doesn¿t much matter whether a key exists if you don¿t have the key.¿
NBAC recommended several procedures that would allow IRBs to waive informed consent provisions when collecting such consent isn¿t practicable. However, the chore of undergoing IRB review, no matter how expedited, in order to obtain a waiver for additional informed consent may be enough to discourage public-private partnerships, Woollett said.
In its recommendations, NBAC suggested the principles guiding its report be adopted by lawmakers and regulators considering medical records privacy. It remains to be seen how the Clinton administration will interpret what constitutes identifiable information.
Medicare Prescription Drug Benefit Gains Momentum
Following the failure of the National Bipartisan Commission on the Future of Medicare to reach consensus on comprehensive Medicare reform in March 1999, legislators came up with a number of proposals to provide a prescription drug benefit to seniors within Medicare. Some measures are admittedly stopgaps to lessen the pain of paying for prescription drugs; others target comprehensive reform.
Rep. Tom Allen (D-Maine) started the debate by introducing a measure that would allow pharmacies to purchase drugs for Medicare beneficiaries under the federal schedule rate, which mandates at least a 24 percent discount on drugs. Both BIO and PhRMA oppose this proposal because it is, in effect, a price control.
¿For the near-poor seniors who aren¿t covered by Medigap policies, a 24 percent to 30 percent discount on a drug that costs $100 a month won¿t solve the problem,¿ said Jeff Trewhitt, media spokesman for PhRMA. ¿That still is too much money for them to pay.¿
Sens. Olympia Snowe (R-Maine) and Ron Wyden (D-Ore.) introduced legislation that would provide a prescription drug benefit for Medicare-eligible seniors by relying on price supports for purchasing private sector drug-benefit insurance. The proposal would supplant the supplemental Medigap policies.
President Clinton announced a plan in June to provide a prescription drug benefit into the Medicare program by establishing a competitive bidding process for the right to supply prescription drugs to Medicare beneficiaries. The plan would divide the nation into regions, which would be auctioned off to pharmacy benefit managers. PhRMA objects to the winner-take-all nature of the proposal.
Finally, Sens. John Breaux (D-La.) and Bill Frist (R-Tenn.) introduced legislation in November proposing a comprehensive reform of Medicare called the Medicare Preservation and Improvement Act of 1999. The proposal would establish a competitive premium system for Medicare insurance based on the Federal Employees Health Benefits Plan. Under the plan, Medicare beneficiaries would have a choice of insurance plans and the offerings of those plans would be overseen by a Medicare Board. The bill would provide premium supports to low-income seniors.
With the president including a prescription drug benefit in his FY2001 budget and, in his State of the Union address, challenging Congress to pass such a benefit, it will be a hotly debated issue in 2000. However, election-year politics may ultimately stymie such efforts as Republicans try to win the White House and the Democrats try to win Congress.
¿I believe in the political context of this year, we are going to find intense pressure for passage of some prescription drug benefit,¿ Feldbaum said. ¿The odds are, despite the pronouncements by both parties, it will be the political factors that prevail this year. It¿s quite likely at least one party will see some advantage to slowing the momentum and blaming the other party.¿
Nevertheless, Feldbaum said stakeholders have to go into the debate with the conviction that the prescription drug benefit will happen. In that case, BIO supports a stop-loss provision that would set an out-of-pocket limit for drug expenditures for patients who are heavy users of expensive therapeutics such as biotech products.
¿If we had our druthers, which we don¿t, we¿d prefer to see a prescription drug benefit in the context of comprehensive Medicare reform,¿ Feldbaum said. ¿But this train is likely to be coming down real fast and we need to be ready.¿
Human Stem Cells Provide Ethical Dilemma
Whereas sheep clone ¿Dolly¿ and efforts to clone human beings occupied the ethical debate in Washington for the past several years, a potential research and therapeutic tool for scientists hoping to use genomic discoveries to treat a host of diseases took center stage for most of this past year. With the discovery of human embryonic stem cells, the National Institutes of Health, Congress and NBAC debated whether the federal government could ethically fund research using human embryonic stem (ES) cells. Derived from ethically difficult sources ¿leftover¿ embryos from in vitro fertilization procedures and aborted fetuses the cells offer the potential for wide-ranging cellular and gene therapies because they can become any differentiated cell in the body.
Several House and Senate hearings were held on the potential of these cells as well as the ethics of using the cells, and NBAC was called in to make recommendations on the ethical use of these cells. In January, NIH Director Harold Varmus told NBAC that despite an appropriations rider banning the use of federal funds for human embryo research, the agency could underwrite the use of human embryonic stem cells in biomedical research because those cells weren¿t capable of becoming a human being when implanted into a woman¿s womb.
In September 1999, NBAC delivered a report advocating federal funds for the use of ES cells. However, it went one step further by also endorsing federal funding of the derivation of these cells. The commissioners concluded in their report, titled Ethical Issues in Human Stem Cell Research, ¿Although some may view the derivation and use for [embryonic stem] cells as ethically distinct activities, we do not believe these differences are significant from the point of view of eligibility for federal funding. That is, we believe that it is ethically acceptable for the federal government to finance research that both derives cell lines from embryos remaining after infertility treatment and that uses those cell lines.¿
Later in September, NIH released guidelines advocating federal funding for the use, but not the derivation of those cells.
¿If NBAC had said the use of ES cells were a bad thing, that would have been a killer for federal funding of research using ES cells,¿ Werner said. ¿But, the position helped even though the administration distanced itself from the report. The NBAC report allowed the administration to adopt a moderate¿ position.¿
In addition to endorsements from federally appointed bodies, Werner pointed out patient advocacy groups really prevented opponents of ES cell research from mounting a legislative ban on federal funds for the research. ¿Support from patient groups for this research was so overwhelming that a serious challenge to funding the effort simply didn¿t materialize,¿ Werner said.
Ag-Biotech Raises Concerns In United States
Opposition did materialize for the use of biotechnology in agricultural products. Unlike their European counterparts, American consumers had largely accepted the use of biotechnology in crops. However, that unquestioning embrace of technology may be coming to an end as a number of consumer groups and members of Congress have begun to call for the labeling of genetically engineered foodstuffs and stronger oversight of agricultural biotechnology.
Rep. Dennis Kucinich (D-Ohio) introduced legislation requiring labels for all genetically modified foods. And the FDA had a series of public hearings on bioengineered foods, where a number of consumer advocates raised concerns the engineered products may not be safe for human consumption.
While the agency officials made no commitment to any specific action, their questions to panelists at the hearings on making the regulatory process mandatory and the prospect of having food labels indicated these actions may be under consideration.
¿The whole ag side of the industry is very important to the biotech industry as a whole,¿ said Feldbaum. ¿If these misconceptions about agricultural biotechnology are allowed to fester, it will result in bad science.¿
Gene Therapy Death Raises Ethical Questions
In September 1999, an 18-year-old gene therapy patient died as a result of participating in a Phase I gene therapy study. The patient, Jesse Gelsinger, suffered from a rare genetic liver disorder called ornithine transcarbamylase deficiency, which prevented his body from processing the nitrogen found in food proteins and resulting in a buildup of ammonia in his bloodstream. Researchers at the University of Pennsylvania had injected an adenovirus-based gene therapy vector directly into Gelsinger¿s liver in an attempt to see if they could safely deliver the gene therapy agent and transiently increase his ability to eliminate ammonia from his system.
A review of his death showed the Penn team allegedly had inadequately informed Gelsinger and his family about the risks associated with the procedure, failed to adequately inform FDA and NIH about adverse events associated with the trial and failed to report some animal deaths. The FDA placed all of Penn gene therapy trials on clinical hold and is still in the process of determining what punitive measures, if any, it will take related to the protocol violations discovered at Penn.
While defining adequate informed consent for clinical trials remains an ongoing issue for all researchers conducting clinical trials, the Penn situation also has highlighted confusion over adverse-event reporting requirements for gene therapy trials.
FDA has regulatory authority over all investigational new drugs (INDs), including gene therapy, whether the trials are sponsored by the private or public sector. The agency requires all serious and unexpected adverse events be reported to the agency within 15 days. If the adverse events are also life-threatening, the time clock shortens to seven days. Those serious adverse events expected as a result of treatment with a particular drug or biologic or expected as a result of the disease are reported annually to the agency.
NIH, on the other hand, requires all investigators receiving any type of federal research funding to report immediately to NIH any serious adverse events regardless of whether it was expected or not. Amy Patterson, director of the Office of Biotechnology Activities at NIH, said researchers hadn¿t been following those NIH guidelines.
In the wake of these findings, some are suggesting the Recombinant DNA Advisory Committee, or RAC, return to its role of approving all gene therapy protocols. Currently, the RAC reviews only novel protocols, but the body also is supposed to receive the adverse events reports.
¿The sheer confusion over what the rules are have already had a chilling effect on the field,¿ Woollett said. ¿There are a lot of companies that will reassess whether they want to pursue gene therapy at all.¿
BIO has suggested FDA and NIH harmonize their reporting requirements and the industry will voluntarily deliver the information to FDA and the RAC at the same time. PhRMA isn¿t in agreement with that plan.
A Look To The Future
Woollett sees a regulatory issue with pharmacogenomics looming in the future. Because the technology will base drug choices on the particular genetic makeup of an individual, employing such a strategy will require a diagnostic test in conjunction with prescribing a drug.
¿It¿s a very interesting question,¿ Woollett said. ¿You have a diagnostic in parallel with a drug. Do you have cross-regulation? How this industry is going to be regulated is going to be a very big issue.¿
Such issues could be taken up in revisions to the Food and Drug Administration Modernization Act of 1997. Feldbaum said the industry is trying to assess whether it should try to make changes to the law while negotiating the third iteration of the Prescription Drug User Fee Act.
¿There really is a fair amount of satisfaction with FDAMA, so this is something we won¿t push if it isn¿t necessary,¿ Feldbaum said.
Whatever 2000 holds for the biotechnology industry, Feldbaum is confident of one thing: He has no way of predicting about one-third of the issues BIO will face this year.
¿We just can¿t know what will happen in an industry that is moving so fast,¿ Feldbaum said. ¿I just hope it¿s not some tragic drama like the death of Jesse Gelsinger.¿