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WASHINGTON — The president's pandemic influenza plan will get funded after all, following last week's last-minute congressional passage of a defense appropriations bill to which the measure was attached.

“We need to put the wheels in motion,“ Senate Majority Leader Bill Frist (R-Tenn.) said on the floor last week, “so that when and if the avian flu hits, America is prepared.“

The legislation, which passed just before the end of the congressional session, provides resources to stockpile existing therapies and to accelerate the development of new vaccines and antiviral drugs that could be more effective against a pandemic flu strain. Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood called it “the first step“ toward developing a domestic vaccine industry “that will substantially improve our national security and our health security.“

The legislation also provides a compensation program for potentially injured parties and liability protection that the industry has fought for in order to remove some of the risk from vaccine development. That last provision, related to liability protection, has proven to be a thorny issue due to longstanding opposition from consumer advocates.

But many industry advocates have argued that drug makers need a shield from liability in order to lure them back into vaccine production in the U.S. So that part of the bill, labeled the Public Readiness and Emergency Preparedness Act, provides immunity to claims of “loss caused by, arising out of, relating to, or resulting from the administration“ of a covered vaccine, countermeasure, device or other products. Such immunity covers a range of uses, including the design, development, testing, manufacturing, distribution, administration, use and other activities so that the protections can be applied as broadly as possible. But that protection is voided if one can prove willful misconduct that causes a serious injury or death.

President Bush, who first introduced his $7.1 billion pandemic preparedness plan two months ago, is expected to sign the bill soon.

More recent efforts to advance the pandemic flu bill had been stymied by a Senate vote to block the defense appropriations bill because of a more divisive measure that had been attached to it, oil drilling in the Arctic National Wildlife Refuge in Alaska. But that was pulled off just before Congress departed for Christmas break, allowing the defense spending bill, and the attached pandemic flu funding, to move forward.

“We need communication, surveillance, antivirals, vaccines, research, and stockpiling and surge capacity,“ Frist said. “This may sound like a lot of moving parts, but between our researchers, entrepreneurs, and public health experts, we have the intellect, the ingenuity and the knowledge to get the job done.“

Bush signs cord blood bill

Federal funding is on the way for stem cells derived from umbilical cord blood after the president signed the Stem Cell Therapeutic and Research Act of 2005.

Just before the session ended, the Senate finally passed the measure, which has long had support in the House of Representatives. The bill will fund the addition of 150,000 units of cord blood to the current inventory stored in public cord blood banks, and also establish a national cord blood registry through which doctors can search for and identify matching units of cord blood and adult bone marrow donors in a single location.

“We have been working on this bill since 2001,“ said its primary sponsor, Rep. Chris Smith (R-New Jersey), “and I am thankful that treatments will now, finally, be made available to patients in need.“

It includes $79 million for the collection and storage of cord blood stem cells, with the goal of reaching a total inventory of 150,000 units, which would make them available to more than 90% of patients in need. That would more than triple the availability of cord blood as a source of stem cells, said Joanne Kurtzberg, a proponent of the bill and Duke University researcher who more than a decade ago pioneered the use of umbilical cord blood as a cure for fatal childhood cancers and genetic diseases.

The new law also reauthorizes $186 million over the next five years to be spent on the national bone marrow transplant system and combines both the cord blood and bone marrow systems into one program.

More controversial bills related to federal funding for embryonic stem cell research have yet to receive congressional clearance.

Sarbanes-Oxley Reform Looks Likely

A Securities and Exchange Commission advisory committee recently voted in favor of reforming part of the Sarbanes-Oxley Act to benefit small public companies, an effort that has been led largely by BIO (Washington).

The trade association spearheaded a coalition of biotechnology, healthcare technology, high technology and venture capital industries to change a one-size-fits-all approach to the internal controls portion of the corporate governance law, Section 404. “We are asking the SEC to ease sections that are creating harmful, unintended consequences for small public companies,“ said Greenwood.

Collectively, they urged the committee to define small public companies as the bottom 6% (based on a quarterly average) of the total U.S. public market capitalization or by a revenue threshold set by the average revenues of companies at the bottom 6% of total market cap; exempt them from having external auditors attest to internal controls, which would not exclude them from complying with Sarbanes-Oxley as a whole; and allow such companies to take a risk-based approach to prioritizing their key financial controls and to alternate the frequency of control testing to every second or third year.

Because compliance with the auditor requirement can cost upwards of $1 million, Greenwood called the 18-1 vote “an indication that the committee understands the financial burden that Section 404 of Sarbanes-Oxley places on small public companies.“ The committee's recommendation will be released for public comment prior to its meeting Jan. 23, and the final recommendations are due in April.