The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Category Archives: Dani Peters

Senate Action on Small Business Innovation This Week?

SBIR bannerThe Senate schedule for today does not include consideration of The Small Business Innovation and Research Act of 2009. Late last week there were rumors the House version of legislation, passed by the U.S. House of Representatives on July 8, would receive expedited consideration on the Senate floor as early as today, using the unanimous consent Senate measure. The Congressional Budget Office estimates the cost of implementing the House legislation would be $272 million 2010-2014. The legislation increases funding amounts and eases eligibility for SBIR grants to companies backed by venture capital investors. SBIR grants are available in all U.S. federal agencies, including NIH, Dept. Defense, Dept. Energy and NASA.

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Obama Budget 2010: HHS Highlights

The Obama Administration delivered its FY2010 Budget to Congress yesterday. Among the highlights of the Department of Health and Human Services Budget:

  • $511,000,000 increase to FDA’s budget with $259 million for food safety inspections, surveillance etc.
  • $584,000,000 for influenza preparedness, including purchase and development of vaccines, antivirals, diagnostics and supplies
  • $275,000,000 for advanced development of biodefense countermeasures (antivirals, vaccines, diagnostics)
  • $30,000,000,000 for NIH which is flat over last year, but remember NIH recieved $10bn in the American Recovery and Reinvestment Act
  • $44,000,000 for Office of National Coordinator for Health IT.  The budget projects a $432,000,000 spend in Recovery Act Health IT activities in 2009 and an $809,000,000 spend in 2010 (National Coordinator Office received $2bn in Recovery Act mostly for competitive grants for healthcare providers to incorporate health IT).

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Health Care Reform: Party’s Over for Medical Imaging

mri-kneeWell…it could be worse, but one could argue it’s the beginning of a slow decline for the medical imaging market in the U.S.  On Tuesday, Senator Baucus (D-Montana) and Senator Grassley (R-Iowa), Chairman and Ranking Member of the Senate Finance Committee, released a description of policy options for healthcare reform

The options included “Transparency and Evidence-Based Decision-Making for Imaging Services,” proposing a system that sets “national appropriateness criteria” for imaging procedures (see page 7).  Good so far. The system also includes standarized reporting to monitor rates of adherence to appropriateness criteria.  Uggh, but fine. Then, in 2013,  the Secretary would designate the imaging procedures for which reporting and differential payment will be mandatory and imaging procedures for which reporting will be voluntary based on baseline rates and amount of progress toward goals. This creates a system whereby access to specific imaging services and reimbursement can be further curtailed, and it will. Soon, we might see the term “medically necessary” thrown around in the U.S., a term many Canadians waiting months for an MRI have learned to hate.

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BioFinance Lunch Keynote: U.S. Health Reform

Just finished listening to Scott Gottlieb at the BioFinance lunch keynote. Scott was Deputy Commissioner at the FDA in the Bush administration, and is now a Fellow at the American Enterpirse Institute.

Here’s what he had to say. Stay tuned for questions from the audience, including Dani and I, at the end…

Healthcare in the U.S.

First, good flu vaccine news: current surge capacity for vaccine production is up to half a billion (500,000,000) doses, much better than even a few years ago.

Update: the MaRS Blog has a video of this part of Scott’s talk.

Health care reform:

FOB: Waxman can’t get his bill out of committee. Likely booted to next year.

Comparative Effectiveness: will be a committee in the fall that sponsors research and promulgates guidelines.

1) Medicare has tried to implement some CE: functional equivalence (legislated away), least costly alternative (e.g., wheelchairs) tried to apply to Sepracor, got sued, lost on appeal; tried to take accelerated approval drugs out of reimbursement, didn’t fly. Legislation likely to pass giving CMS back authority to do least costly alternative reimbursement.

Large private plans have hundreds of physicians and thousands of clinicans, CMS has at best 25 physicians. E.g., have made 160 decisions on cancer product reimbursement without a single oncologist on staff.

2) Price controls: private market will be increasingly able to pay off medicade pricing schedules. Drug benefit for dual-eligible patients will be moved to medicade best price schedule.

Similar changes: medicare advantage plans will want to be able to price off medicare if their reimbursement rates are cut.

Also,

“Regulatory creep” at the FDA: balance shifts on approval metrics debates because of increased public desire for and tolerance of regulatory caution.

Medical devices: changing regulatory paradigm for diagnostics. Laboratory-developed tests will likely be regulated as devices. Kennedy has a bill pending.

I asked about the regulatory environment for personalized medicine, and Scott pointed interestingly to different regulatory approaches taken in the U.S. vs EU to screening HER-2 as a precursor to Erbitux treatment for colon cancer. EU uses it based on retrospective data, U.S. has wanted to do dedicated prospective controlled trials.

Dani asked about drug reimportation: Scott thinks it will happen, but regulatory structure and currency changes will increase cost, and increased drug reimbursement in the U.S. will decrease demand.

Brian Bloom, a banker at Bloom Burton, asked about how the Obama administration’s vocal support for innovation meshes with the health care reforms and comparative effectiveness initiatives. Scott diplomatically focussed on the administration’s support for basic reseach, then segued less diplomatically to predict the end of cancer drug development that he says could follow if the NICE model in the UK is globalized.

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The Week Ahead: FTC Hearing on “Evolving IP Marketplace”

The Federal Trade Comission will be hosting a public hearing this Friday on the “The Evolving IP Marketplace: Markets for Intellectual Property”.  This is part of series of public hearings the FTC has held around changes in intellectual property law, patent-related business models and the new IP marketplace.  Looking at the agenda, I was surprised to see that life sciences industry will not be represented on the industry witness panel that will discuss valuing and monetizing patents. The meeting will be webcast.

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About the Delayed Sebelius Confirmation

Contrary to expectations, Secretary of HHS-designate Kathleen Sebelius did not receive her Senate confirmation before the Congressional recess on April 3, due to the objection of one Senator.  Is Sebelius using the break to make greater assurances to Republican lawmakers before her vote is taken up again during the week of April 20? 

In her confirmation hearing, Sebelius addressed Republican concerns about comparative effectiveness research leading to “rationed care.”  Mike Enzi (R-Wyoming), top Republican on the Senate Health, Education, Labor and Pensions Committee questioned whether or not Sebelius would support a budget reconciliation measure opposed by Republicans to expedite Congressional approval of health reform. Republicans have also raised strong opposition to the idea of a government-run insurance plan to compete with private insurers.  The recess has provided more time for Republicans to press Sebelius on these matters and dangle them in front of her Senate confirmation.  Let’s see if this leads to more detailed commitments on comparative effectiveness and health reform!

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The Week Ahead on Capitol Hill

HHS-Secretary elect Kathleen Sebelius will have confirmations before the Senate Health, Education, Labor and Pensions Committee on Tuesday, March 31, followed by the Senate Finance Committee on April 2.  Both hearings should cover topics such as universal health care and comparative effectiveness.  The first hearing would also address issues like public health preparedness and health innovation, while the latter will be more focused on Medicare/Medicaid and the uninsured.

The Senate Judiciary has a scheduled mark-up of the Patent Reform Act of 2009 on Tuesday, March 31 at 10am.  Last week, Senator Feinstein expressed doubts about reaching a compromise on damages provisions in the bill, given the high tech industry’s unwillingness to negotiate.  Stay tuned…an updated compromise amendment could be unveiled on Tuesday.

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Waxman Drives Hard Bargain on FOBs Market Exclusivity

Representatives Waxman (D-CA), Pallone (D-NJ) and Deal (R-GA) released the Promoting Innovation and Access to Life Saving Medicine Act today, a.k.a. Follow-On Biologics legislation. The legislation provides a five-year initial exclusivity for products with a unique molecular structure. The Biotechnology Industry Organization is not too happy. In the past BIO has called for a 14-year data exclusivity

Perhaps actions South of the Border will move the ball forward at Health Canada on its regulatory pathway for biosimilars? It has been almost exactly a year since Health Canada’s draft guidance on biosimilars was published. Health Canada subsequently published a summary of its Consultation on the Regulatory Framework for Subsequent Entry Biologics following a stakeholder meeting in June.

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Stimulus Funding from NIH!

On Wednesday the National Institutes of Health published its Request for Applications (RFA), allocating $200 million provided in the American Recovery and Reinvestment Act.  The deadline for submissions is April 27, and requests for funding cannot exceed $1 million over two years. Applications must come from U.S. institutions and organizations, but  there are no apparent restrictions on sourcing technology from non-U.S. partners.

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The Patent Reform Act of 2009: Absent Inequitable Conduct Provisions Help Biotech

The Patent Reform Act of 2009 was introduced by Senator Patrick Leahy (D-VT) Chairman of the Senate Judiciary Committee. The bill includes Senator Orrin Hatch (R-UT) as a co-sponsor. Notably missing from the list of co-sponsors is Senator Arlen Specter (R-PA), Ranking Republican on the Judiciary Committee.

Provisions relating to inequitable conduct have been removed from the previous version introduced last year. Inequitable conduct is a critical provision for the larger pharmaceutical companies. Provisions relating to apportionment of damages are of secondary importance to large pharma, but critical to biotech. The biotech industry does not favor the current damages language. The fact that inequitable conduct provisions are missing means that large pharma will focus its opposition to the patent reform bill on damages provisions.

The text of the Senate bill is not up on Thomas yet, but you can find the full text as introduced here (pdf).  See also Dennis’ Patently-O post with summary and commentary.

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Obama, Sebelius and Drug Importation

The President’s Budget released last week highlighted President Obama’s support for importing cheaper drugs from Canada (pdf).  The Washington Post writes that Governor and HHS Secretary-elect Kathleen Sebelius was successful in having Kansas join a multistate consortium that allowed Kansans to order prescription drugs from Canada, Britain and Ireland, often at a lower price than in the United States. As a result of Obama’s proposal, drug companies took a hit on the markets last week.

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More Money: House of Representatives Release 2009 Spending Bill

The U.S. House of Representatives Appropriations Committee unveiled its Omnibus spending bill for Fiscal Year 2009 yesterday (pdf). The House is expected to vote on the package this week. For Health and Human Services, the Ombnibus contains $30 billion for the National Institutes of Health (NIH). This funding is in addition to the $10 billion added to NIH in the American Recovery and Reinvestment Act. The Omnibus also includes a new initiative to reduce hospital and clinic infections that cause nearly 100,000 deaths each year, and requires national and state plans to combat infections with $22 million.

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Sibelius and Biotech

Yes, we have all heard the rumors about Kansas Governor Kathleen Sibelius as the next HHS Secretary. How will the potential Secretary Sibelus impact the biotechnology industry? In her first term, Sibelius signed into law the Kansas Economic Growth Act, which was seen as a way to boost Kansas’ biotechnology industry. The Act allocated $500 million in research and investment capital over the next 10 years.

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U.S. Stimulus Compromise (Updated)

Initial reporting (NYT, WSJ) on the bill coming out of the House-Senate conference committee this evening indicates that the $789 billion package will include most of the Bio-related provisions:

Update 10am: More details from ScienceInsider based on Pelosi’s fact sheet:

  • The Department of Energy’s Office of Science, which supports US physical science, will receive $1.6 billion.
  • $400 million will be provided to fund a new mini agency within DOE called the Advanced Research Project Agency-Energy. Obama’s energy secretary, Steve Chu, is a fan. Now congress has bestowed their blessing — and big money –on his dream energy program.
  • NASA will get $1 billion including $400 million for climate change research.
  • The National Institute of Standards and Technology will receive $580 million.
  • The National Science Foundation would receive the full $3 billion increase that the House had passed last month. That’s a 50% boost to its $6 billion budget. The breakdown of that number is not clear, but the House version contained $2 billion more for research grants; $900 million for three infrastructure programs, including a revived $200 million extramural facilities competition; and $100 million for two education programs.

Update 5pm:

  • The $3 billion in NSF funding breaks down as follows: $2.5 billion for research (peer-reviewed proposals); $100 million for the university research instrumentation program; and $400 million for national labs.
  • The NIST money is for infrastructure: $220 million for lab equipment and $360 million for facilities.
  • USDA gets $850 million for infrastructure.
  • NOAA gets $600 million for facilities and equipment.

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Senate Stimulus: Good and Bad Outcomes for Funding Biotech

The latest Senate deal provides an extra $6.5 billion to NIH, amounting to $10 billion for biomedical research but also to improve research infrastructure in NIH facilities. According to Senator Arlen Specter, Ranking Republican on the Senate Health and Human Services Appropriations Subcommittee, the monies would be divvied up among NIH agencies in amounts proportional to their fiscal year 2008 funding. He said that economists estimate that the additional funds could lead to 70,000 new jobs in the health industry over two years.

The latest Senate stimulus deal cuts $870 million for pandemic influenza preparedness efforts. This funding was largely set aside for advanced development of novel vaccines, therapeutics and diagnostics. This is quite different from the earlier stage work that would be funded through NIH. I have heard that the funding would not only fund development efforts for flu, but also allow Health and Human Services to support other advanced development programs, namely for biodefense.

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Flu and Stimulus

With new reported cases of avian flu in Canada and China  it’s encouraging to see that the U.S. economic stimulus plan boosts funding for development of vaccines and antiviral treatments for pandemic influenza.

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Update on U.S. Biotech Bailout

Yesterday the U.S. House of Representatives’ Ways and Means Committee approved the “American Recovery and Reinvestment Plan,” (pdf) which did not include tax stimulus incentives proposed by the biotechnology industry (namely monetizing future Net Operating Losses and future R&D tax credits now in order to forgo those tax assets in the future).

The U.S. House of Representatives package included an enhanced R&D tax credit for up to 20% in R&D expenditures in 2009 and 2010, but limited to renewable energy technology.

The Senate Finance Committee economic stimulus tax bill (pdf) unveiled today extends for 2009 a more general provision that allows firms in a loss position to get cash from the government for research tax credits.

The Senate and House will need to resolve differences with respect to these R&D tax provisons in their respective economic stimulus packages.

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Threats in 2009: Patent Reform

The United States Congress is expected to take up patent reform legislation again in 2009. For biopharma companies, it is safe to say that last year’s version of the bill would not bode well for industry innovation and investment.

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Trends in 2009: Comparative Effectiveness and Personalized Medicine

Two potentially conflicting trends may see a dramatically increased profile in 2009: Government Bailouts and Free-Market Capitalism Comparative Effectiveness and Personalized Medicine. Both have been highlighted by the incoming Obama administration.  Details and analysis after the jump…

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