WASHINGTON _ Biotechnology lobbyists and Capitol Hillveterans predicted that the Republican sweep in Tuesday's mid-termelections will produce a dramatic shift in political philosophy on keycongressional committees that affect the industry.

One lone example of the degree of change in thinking about toconvulse Washington: Rep. Newt Gingrich (R-Ga.) told a crowd at arecent Biotechnology Industry Organization gathering that the FDAought to be destroyed and replaced by scientific entrepreneurs. Hecalled the agency the "leading job killer in America." Gingrich isnow poised to become Speaker of the House.

Lobbyists said that the Republican victory hammers a final, utterlylethal nail into the coffin of drug price controls and a comprehensive,government-led approach to health care reform. They also said thatrelief from long-simmering frustrations like getting a permanentresearch and development tax credit, cutting capital gains taxes andchanging the National Institutes of Health's (NIH) "reasonablepricing clause" policy regardinggovernment-industry collaborations may be on the way.

Proposed amendments to the Orphan Drug Act that would havereduced the length of market exclusivity for new drugs will nowlikely languish indefinitely since many Republicans oppose thechanges. Several sources even suggested that FDA CommissionerDavid Kessler's actions could come under increased scrutiny in aRepublican-dominated Congress.

The new conservative crew on its way to Capitol Hill could demanda more stringent accounting of the cost-benefit ratio of proposedregulations, such as increased adverse event reporting for drugcompanies, the imposition of user fees and the overall regulatoryburden placed on industry.

"Clearly, 1995 is going to be a much more interesting year forbiotech," predicted Pete Teeley, Amgen Inc.'s vice president ofgovernment and public relations. "This new Congress will be far lessinclined to pass regulations that would adversely impact industry. Ithink we'll see a much more thoughtful legislative process as itapplies to the biotechnology and pharmaceutical industries."

More Time To Forge Ahead

"We will spend less time in a defensive mode, fending off harmfullegislation, and more time in a proactive, positive mode," LisaRaines, Genzyme Corp.'s vice president of government relations,told BioWorld. For example, said Raines, the biotechnology industryshould consider proposing specific legislation to remove thereasonable pricing clause from NIH-industry research pacts. (Thepolicy is technically set by the Clinton administration, through theDepartment of Health and Human Services, so legislation would berequired to change it.)

The chairmanships of House and Senate committees andsubcommittees critical to biotechnology industry interests willtransfer to Republicans who, in some notable cases, are openlysympathetic to the drug industry. (See the chart below.) Likewise,perennial industry critics such as Rep. Pete Stark (D-Calif.) have lostconsiderable power. Stark will no longer head the powerful HouseWays & Means Committee's subcommittee on Health, for example.That position will now likely be occupied by Rep. Bill Thomas (R-Calif.).

The likely new chair of the House Energy and CommerceCommittee, Carlos Moorhead (D-Calif.), is "a friend" to thebiotechnology industry, according to lobbyists. And, in perhaps themost dramatic shift of all, long-time drug industry supporter ThomasBliley (R-Va.) will likely replace Rep. Henry Waxman (D-Calif.) aschairman of the Energy and Commerce Committee's subcommitteeon Health and the Environment. "Can you believe the difference thatis going to make?," marveled Gail Wilensky, former director ofMedicare and Medicaid at the Health Care Financing Administrationand a board member of San Diego-based Advanced Tissue SciencesInc.

Bliley is the co-chairman of the Congressional BiotechnologyCaucus and is well-versed in industry issues. Moorhead is a long-time supporter of the biotechnology process patent bill, a hot-buttonissue for the industry in its quest to protect intellectual property andchange U.S. Patent and Trademark Office policies. Rep. Bill Archer(R-Texas), who will replace Dan Rostenkowski (D-Ill.) as chairmanof the Ways & Means Committee, has been an advocate of capitalgains tax cuts and making the research and development tax creditpermanent, instead of annually renewable which leaves companiesunsure of the future.

Schenk Defeated: Industry Loses Champion

Rep. Lynn Schenk's (D-Calif.) loss on Tuesday to Republicanchallenger Brian Bilbray was lamented by some. Schenk played acritical role in the drama of the health care battle by convincingHouse Energy & Commerce Committee chairman John Dingell (D-Mich.) to delete the so-called breakthrough drug committee fromhealth care legislation. "She was a tremendous champion of thebiotech industry," said Raines. But her replacement, coming from adistrict full of biotechnology companies and being a conservative, islikely to be supportive.

On the Senate side, Sen. Orrin Hatch (R-Utah) will likely take thehelm of the Judiciary Committee. Raines suggested that he may wantto investigate the NIH's recent decision to file a competing patent forthe breast cancer gene, BRCA1, since the other patent applicant,Myriad Genetics Inc., is from his home state.

Wilensky, who is currently a senior fellow at Project HOPE inBethesda, Md., told BioWorld that the future will still be rocky forthe biotechnology industry despite the new political environment."The industry will no longer be fighting a government structure thatis interventionist and unsupportive," said Wilensky. "But the healthcare market will continue to aggressively demand value and betterprices and that's going to lead to a shake-out. There will be far fewercompanies, not because a heavy-duty regulatory structure killedinnovation but because the market demanded it." n

-- Lisa Piercey Washington Editor

(c) 1997 American Health Consultants. All rights reserved.