Washington Editor

In Washington, l affaire Lewinsky not only left the executive branch dealing with and surrounded by an historic level of distraction, but also provided fodder for the partisan rancor that has pervaded since the opening of the 104th Congress in 1995.

I did not like to see this new, all-time high level of partisanship on the Hill this year, said Carl Feldbaum, president of the Biotechnology Industry Organization (BIO). It really resulted in a virtual inability to form consensus. The president s troubles resulted in members of Congress gesturing and posturing, rather than legislating.

In such a highly charged atmosphere during an election year, much of the business of the government was left to the waning days of the 105th Congress. Despite the stalemate for most of the year, when things finally got moving, the biotechnology industry was a winner.

It was as if the dam burst, Feldbaum said. We just had to make sure that when it did break it irrigated our farm.

The final days of the legislative session in 1998 provided the biotechnology industry with some key policy victories from the year-long extension of the research and development tax credit to securities litigation reform.

One of the most important achievements, and one of the final actions, of the 105th Congress was the confirmation of Jane Henney as the new FDA commissioner. Nominated in June, a year and a half after David Kessler stepped down to head the Yale University Medical School, Henney was confirmed on the last day of business for the 105th Senate.

Feldbaum praised the choice to head the agency and noted that Henney comes to the helm when the agency desperately needs an advocate in Congress. The FDA is an historically underfunded agency. Without a confirmed commissioner, the agency had even less clout in trying to battle for limited appropriations. Feldbaum hopes the agency will have a better bargaining position with a confirmed commissioner at the head.

Despite such victories, Congress will continue to face major issues of importance for the biotechnology industry, including patent reform, medical privacy legislation and efforts to create a Medicare drug benefit. In resolving each of these issues, Congress will have to be quite certain that the actions it takes adequately encourage and preserve the research enterprise that serves as the engine for the biotechnology industry.

Patent Reform Rides Again

Since the enactment of the General Agreements on Tariffs and Trade (GATT) in 1994, U.S. patents no longer provide 17 years of exclusivity from the time of issuance. Companies and inventors now have 20 years of exclusivity from the date they file their patent at the Patent and Trademark Office (PTO).

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 the PTO, patent term is ticking away.

Sen. Orrin Hatch (R-Utah) introduced legislation in 1997 that restores time lost at the PTO to guarantee that a patent has at least a 17-year lifespan. The bill passed the Senate Judiciary Committee with a single dissenting vote on May 22, 1997, and awaited consideration by the full Senate. In October 1998, Hatch assembled five of the past six PTO commissioners to endorse the legislation and urge its uptake before Congress adjourned for the year.

Nevertheless, Majority Leader Trent Lott (R-Miss.) failed to bring patent reform legislation to the Senate floor for a vote before the 105th Congress adjourned, and patent term restoration awaits another run in the 106th Congress.

Deadline for Privacy Looms

Congress faces a hard and fast deadline that it set for itself in devising a blueprint for ensuring the privacy of medical records. Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Congress must pass medical privacy legislation by August 1999 or the Secretary of Health and Human Services will promulgate regulations creating a federal medical privacy standard.

Individual congressional representatives went on record saying that the issue was far too important to leave to bureaucrats. However, to date, they have achieved no consensus on the issue. Nevertheless, many members of Congress, as well as industry representatives, aren t wildly enthusiastic about the proposal Health and Human Services Secretary Donna Shalala presented to Congress in September of 1997.

That plan called for limits to access to medical records and civil and criminal penalties for people who misuse their access. Explicit in the department s outline were the types of access permitted for researchers and law enforcement officials.

Sen. Patrick Leahy (D-Vt.) objected to that plan, saying that the access provided to law enforcement officials was the equivalent of allowing fishing expeditions for indications of criminal behavior in a person s health records.

Of a more immediate concern for the biomedical research community is the fact that HHS recommendations don t specifically preempt state laws.

Research is not contained within the boundaries of a single state, said Gary Persinger, vice president of research and information services at the Pharmaceutical Research and Manufacturers of America (PhRMA). If we don t have consistent rules, it could become very difficult to conduct research.

As lawmakers gear up to tackle the issue this year, industry representatives will attempt to direct Congress into viewing genetic information as one type of medical information that requires no special protections. They will be battling constituencies lobbying for special protections for mental health and infectious disease in arguing that all information in medical records deserves equal protection. The industry is concerned that creating special protections for certain diseases will not only inadequately protect patients, but unnecessarily stigmatize certain information.

All medical information that directly identifies individuals must be subject to the same high standard, said Elizabeth Andrews, director of worldwide epidemiology at London-based Glaxo Wellcome plc s U.S. headquarters, in Research Triangle Park, N.C. PhRMA member companies can t support any separate, implicitly higher standard of protection for genetic, psychiatric or infectious disease information. Instead, legislation should protect the confidentiality of all patients, whatever their condition.

Any effort to provide protections may inadvertently cut off access biomedical researchers have to medical records and stored tissue samples, stymieing vital research. Epidemiologists and other researchers often study existing databases where patient information has been made anonymous to prevent the researcher from knowing their identity. Usually, there is an encrypted identifier that can be used to obtain additional information about the patient, such coexisting disease states and drugs that the patient may be taking.

It is in BIO s best interest that patients are very comfortable with who is using their medical information and why they are using it, said Nancy Bradish Myers, director of federal government relations at BIO. Most people realize that there is value to researchers having access to such information it s just that there should be sufficient protections for patients whose information is being used.

For both academic and industry researchers, the goal will be to provide such protections without preventing researchers access to vital research tools such as databases and archived tissue samples. BIO and PhRMA endorse plans that focus on taking action for misuse of such information, rather than prohibiting access.

I see this information as sort of in a box. We can use the information for good uses and bad uses, said Gillian Woollett, vice president of biotechnology and biologics at PhRMA. We can just lock down the box and prevent both kinds of uses. Instead, we need to prohibit the bad uses while encouraging the good uses.

BIO sees this issue as so vital to the research that its company members do to find new cures for diseases that they sent a letter to Congress in January, imploring members to take up medical records privacy well ahead of their self-imposed deadline.

Medicare Drug Benefit: Another Run at Price Controls?

In 1998, several members of Congress began considering adding a drug benefit to the Medicare program that provides health insurance to the nation s retired. Medicare was born during the early 1960s, when drugs neither cost as much nor provided the therapeutic benefit that they do today. As a result, seniors who rely on Medicare pay retail prices for their prescriptions.

Many member of Congress are looking for a way to offer a discount to seniors for the drugs they need. In 1998, Rep. Tom Allen (D-Me.) introduced a bill that would provide drugs to pharmacies at the federal schedule rate for Medicare recipients. That bill saw no action in the 105th Congress; however, he has reintroduced the measure with the start of the new Congress.

The Allen bill allows pharmacies to purchase prescription drugs for Medicare beneficiaries at the same prices available to the federal government under the federal supply schedule rate, which uses either a mandatory 24 percent rebate or negotiated deep discounts. Veterans Affairs hospitals, military hospitals and Public Health Service clinics receive medicines under this schedule.

Nowhere in the legislation does the bill stipulate that pharmacies actually have to pass the discount on to Medicare beneficiaries. As a result, Feldbaum fears that a black market could develop for pharmaceuticals with no benefit to seniors. That is a loophole you could drive a train through, Feldbaum said.

In addition, Jeff Trewhitt, media spokesman for PhRMA, noted that the provision would put 40 percent of all prescription drugs under the federal supply schedule rate. In his mind, such a measure fails to recognize the high price of drug research and development costs a single drug can cost up to a billion dollars to develop.

There was only one year in the past 15 where the pharmaceutical and biotechnology industries failed to increase their spending on research and development, Trewhitt said. That was 1994 to 1995, when the Clinton health-care reform with price controls was being considered. That isn t too hard to figure out.

Both Trewhitt and Feldbaum agree that the Allen bill is unlikely to move in Congress this year. However, Congress is poised to consider some sort of Medicare drug benefit legislation. The National Bipartisan Commission on the Future of Medicare is set to make a report to Congress at the end of March and is expected to include some sort of drug benefit.

This is just the first salvo in a battle over price controls, Feldbaum said. But, this isn t an easy issue. We have to balance the need to promote innovation and the research companies need to raise capital with the need felt by seniors for a drug benefit. We have to make sure that whatever is put into place adequately addresses both of those needs.

Dolly s Dilemma Moves to the States

Ever since the sheep-clone Dolly hit the world stage, Congress has considered legislation to ban the cloning of human beings. And 1998 was no exception.

The year began with a Chicago physicist named Richard Seed announcing to the world his intention to clone a human being. Sen. Majority Leader Trent Lott (R-Miss.) responded by attempting to bypass the committee system and bring human cloning legislation directly to the Senate floor for a vote.

Like many efforts to draft human cloning legislation, the legislation co-sponsored by Sens. Bill Frist (R-Tenn.), Judd Gregg (R-N.H.) and Christopher Kit Bond (R-Mo.) used imprecise language that framed the issues in the terms of the contentious abortion debate. The legislation would have provided criminal penalties for any attempt to produce a human embryo using the somatic cell nuclear transfer technology that produced Dolly.

This legislation inappropriately focused on the production of human embryos, Feldbaum said. Banning cloning technologies will only stymie research.

PhRMA s Woollett agreed with Feldbaum, noting, If you want to ban the cloning of human beings, you must be quite sure about what you are banning. Otherwise, you risk putting in legislation that bans a procedure but leaves the door open for someone to create a cloned human being using an entirely different method.

Lott s effort failed when Democrats and moderate Republicans, led by Sen. Dianne Feinstein (D-Calif.), filibustered the motion to bring the legislation to the floor. In the end, Lott failed to secure the 60 votes needed to break the filibuster.

Despite the fact that the FDA has stated its intention to assert its regulatory authority over any attempts to clone a human being, the agency may only enjoin researchers from conducting human cloning experiments on the basis of safety. Once safety and efficacy are established in animal models, the agency would have no means to prevent the experimentation. For that reason, both state and federal legislators appear unwilling to leave the cloning issue to the discretion of the FDA.

Nevertheless, Trewhitt said that it was unlikely that any federal efforts to ban human cloning would enjoy serious consideration in the 106th Congress. As a result, the states are likely to step into the void in 1999. BIO and PhRMA are concerned about such efforts because no two state laws will be identical.

Already several states have taken action against cloning efforts. California led the fray, enacting a ban in 1997 that prevents the implantation of a cloned human embryo for the purposes of initiating a pregnancy. In 1998, Missouri and Rhode Island passed similar laws which both BIO and PhRMA consider reasonable.

Michigan, however, passed a law in June 1998 that uses language derived from the debates on human embryo research and abortion. Such language could easily prohibit certain genetic techniques and tissue engineering. Michigan Gov. John Engler (R) has said that, if the law becomes a burden to the state, it can be revised.

The current situation illustrates the patchwork quilt of laws that could eventually delineate states which are research friendly and those with prohibitive laws. Companies hoping to conduct multicenter clinical studies will be faced with an enormous increase in administrative details as they try to comply with varying laws. In addition, certain research protocols may simply be impossible in states with laws that are too restrictive.

BIO and PhRMA both have said that they will focus their cloning lobbying and education efforts in the state legislatures this year.

With such weighty issues ahead, Feldbaum noted the dawn of a new age in health care as a result of the advances made in pharmaceuticals and biotechnology products. Because we can now treat diseases that once killed without question, children born today can expect a significantly increased lifespan. The rules of the road have changed, Feldbaum said. Children who are born this year have a good chance of living in three different centuries. How we deal with the issue of medical privacy and health care for seniors will have tremendous impact, as we head into the next century.

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