Washington Editor

The most important issue facing the biotechnology industry last year - and again in the coming year - is legislation governing follow-on biologics, said Nick Littlefield, partner and chairman of the government strategies group at the Boston law firm Foley Hoag LLP.

A bill introduced last year in the House by Rep. Henry Waxman (D-Calif.), he said, "was coming like a train down a railroad track," Littlefield told attendees at the 10th Annual BIO CEO & Investor Conference in New York. "It looked like it was unstoppable, and it looked like it could be very, very dangerous from the standpoint of innovation and the biotech industry," he added.

But, he said during a roundtable session about federal policies that impact drugmakers, the biotech community came together last year to convince certain members of Congress that incentives, such as data exclusivity, were worth preserving.

As a result, Littlefield said, the Senate Health, Education, Labor and Pensions Committee passed a bill last summer that, if enacted, would establish a regulatory pathway for the licensure of follow-on biologics and give biotech makers 12 years of data exclusivity during which a follow-on biologic, also called biosimilar or biogeneric, may not be approved.

"It is a very reasonable, balanced bill," he said about the Senate legislation, adding that biotech makers need at least 12 years of protection to earn back the investments they and others have made in their products.

Waxman has argued that five years of exclusivity is an adequate amount of time for biotech drugmakers to recover their investments.

Littlefield noted that there are at least two other efforts in the House to form follow-on biologic legislation that are more favorable to biotech firms than Waxman's bill.

Rep. Jay Inslee (D-Wash.) is working on legislation that is "pro-biotech industry," he said, and Rep. Anna Eshoo (D-Calif.) is leading an effort to form a bipartisan bill that would provide 12 years of exclusivity plus additional years for seeking new indications and conducting pediatric trials.

"We're getting where biotech could be on a par with the Hatch-Waxman small-molecule regime, which is up to 14 years protection provided by the patent," Littlefield said.

But, he told biotech drugmakers, "It's going to be a big ongoing fight because the generics don't like even 12 years."

He asserted that generic drugmakers, waging that the Democrats will win the White House and control both chambers of Congress, will lobby to stall the legislation until 2009.

Littlefield argued that it may be better for the biotech industry if the legislation is passed this year "when we've got a head start and we might get a more balanced bill."

If the follow-on biologics legislation is not done right, Littlefield warned, "it's going to be a lifetime of suffering" for the biotech industry, investors, the research community and for patients "who just won't have the innovations that they otherwise would have."

The generic drug industry has argued that follow-on biologics are needed in the U.S. to give millions of patients with serious diseases, who otherwise could not afford treatment with expensive biologics, access to affordable life-saving therapies.

Health care reform, which largely has focused on the costs of medications and comparative effectiveness of products, is another main concern for the biotech industry for the coming year, especially now with the U.S. economy in a slump and the pending presidential election, Littlefield said.

The biotech and pharmaceutical industries are in a position where their products are "underappreciated for their value," he maintained.

Although biotech drugs make up only 10 percent of the nation's health care budget, Littlefield said, "When the politicians talk about where we're spending too much, they always talk about drugs and they talk about new technology."

Washington's "attack" on the biotech industry over the prices of medications, said J. Donald deBethizy, CEO of Winston-Salem, N.C.-based Targacept Inc., "has created an environment where there is a lack of appreciation of the value of the innovation that we are doing."

But, Littlefield said, as long as biotech drugs are viewed simply as new and expensive technology, the industry will continue to be blamed for driving up the cost of the nation's health care bill.

"The fact is, until we convince people of the value of our products, we will always be under attack," he said. It's up to the biotech industry, Littlefield asserted, to demonstrate the value of their products to lawmakers and the nation.

The issue of comparative effectiveness studies for medications, Littlefield said, "is another train that's moving down the track."

He noted that Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, has pledged to make comparative effectiveness of pharmaceutical products part of the committee's agenda for the coming year.

However, Littlefield said, Baucus has not made his intentions clear about whether the Finance Committee's comparative effectiveness debate will be about giving more reasonable information to providers and patients or focused on how the data inform government decisions of medication coverage for seniors and the poor.

No matter the Senate's path for comparative effectiveness, he insisted, "it's a crucial issue" for the biotech industry that deserves attention.

Patent reform also is a vital issue for biotech in 2008, Littlefield said, noting that the House passed legislation last fall and a bill is now moving through the Senate.

Because of the efforts over the past several months of the biotech industry, he said, lawmakers now understand more clearly what is at stake if the intellectual property rights of biotech companies are overridden to meet the desires of high-tech firms.

At issue in the current legislation is the right of the inventor to obtain damages in patent infringement lawsuits. "If the law is changed so that the damages don't reimburse you for the cost of the infringement, then [biotech's] IP suffers dramatically," Littlefield argued.

The intellectual property system, said John S. Swen, vice president of science policy and public affairs for global research and development at Pfizer Inc., "is the life blood of what we do. If we don't have a good IP system, then no one will invest and innovation will cease," he said.

The conference, which has attracted about 2,500 CEOs, investors and others, continues through Wednesday.