WASHINGTON _ The House Energy and Commerce Committee'sSubcommittee on Health and the Environment held a hearing onThursday on the Orphan Drug Act Amendments of 1994 (ODAA).ODAA, compromise legislation hammered out in six years ofnegotiations between politicians, the biotechnology industry andpatient advocacy groups, will change the terms of market exclusivityawarded to companies that develop drugs for diseases affecting lessthan 200,000 people.Committee member Rep. Henry Waxman (D-Calif.) proposed a change_ supported by both the Biotechnology Industry Organization (BIO)and the National Organization for Rare Disorders (NORD) _ inODAA. The change would guarantee that if an orphan drug'scumulative sales do not exceed an amount to be determined by thesecretary of Health and Human Services, the drug would automaticallyqualify for a three-year extension of market exclusivity beyond theinitial four-year period granted in the current ODAA.The subcommittee will schedule a formal mark-up session toincorporate the proposed change into law. The bill will then be votedout of the subcommittee for consideration by the full Energy andCommerce Committee and, ultimately, the full House.Companion orphan drug legislation was voted out of the Senate Laborand Human Resources committee on May 11 without amendments andnow awaits consideration and a vote in the full Senate.1994's ODAA legislation contains several significant changes to theoriginal Orphan Drug Act enacted in 1983:y A guarantee of four years of exclusive marketing rights for an orphandrug, down from seven.y A three-year extension of exclusive marketing rights if the FDAdetermines that an orphan drug has "limited commercial potential."y A loss of exclusivity if the orphan drug treats a patient populationwhich exceeds 200,000 people.y A grant of exclusivity to two or more companies if they develop adrug simultaneously.Other features of the new legislation include a plan to replace theexisting DHHS's Orphan Products Board with an Office for OrphanDiseases and Conditions.Process Patent Bill Proceeds To Judiciary CommitteeThe House Judiciary Committee's subcommittee on IntellectualProperty voted unanimously on Thursday to send the BiotechnologyPatent Protection Act on to the full Judiciary Committee forconsideration. Language in the bill was amended to appease theconcerns of other industries about changes in the 200-year-old patentlaws.At issue is the manner in which the U.S. Patent and Trademark Officegrants patents for processes. The legislation as originally proposedwould have simplified and provided certainty in the determination ofpatentability of processes using or making novel and "nonobvious"products. Thursday's amendment narrows the scope of the bill,changing the wording to processes "using or resulting in a compositionof matter" that is novel and nonobvious.The end result: the bill is more biotechnology industry-specific innature. According to BIO vice president of government relations ChuckLudlam, the changes in no way impact the biotechnology industry butdo address concerns of other industries, such as the computer softwareindustry.Could Fall Bring An Offering Bonanza?The biotechnology industry's financial future holds two possibilities:the long-heralded consolidation frenzy or a revival of the publicmarkets. That's according to Michael Devine, a partner of ArthurAndersen & Company who spoke to a monthly breakfast gathering ofMaryland-based biotech executives in Gaithersburg on Thursday.But Devine qualified his prediction with a bit of history. In the late1980's, he said, talk of a looming industry shake-out reached ahysterical pitch. A few years later, in 1991, the industry raised $4billion on the public markets.Although Devine's theme was slated to be "Exiting Strategies forBiotech Companies," he joked at the start of his speech that "survivalstrategies" might be a more relevant topic given the currently moribundpublic offering markets.However, Devine said that the annual surge in public equity offeringstraditionally seen from September through November could beintensified this year due to politics and product development news."The health care debate controversies are stabilizing with price controlthreats fading away and we are set for some product approvals from theFDA," said Devine. "Conventional wisdom says these kinds of eventsserve as catalysts and that could set the stage for a lucrative Fall."Devine also noted that venture capital (VC) investments inbiotechnology companies have slumped in 1994. In fact, according tothe June 13 edition of BioWorld Financial Watch, in the first fivemonths of 1994 fledgling biotech firms have attracted only 58 percentof what they had attracted in the first five months of 1993 ($194million versus $332.5 million). In addition, only 21 firms won VCbacking in 1994 versus 45 in 1993. n
-- Lisa Piercey Washington Editor
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