Commentary: Biotech industry must adapt to changing political and economic landscape

A new presidential administration and a new Congress—not to mention the ever-changing economic situation on Wall Street and in financial centers around the world—are testing the speed at which biotechnology companies can react and adapt to the evolving environment.

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A new presidential administration and a new Congress—not to mention the ever-changing economic situation on Wall Street and in financial centers around the world—are testing the speed at which biotechnology companies can react and adapt to the evolving environment. We know that biotechnology has the potential to address so many unmet challenges, from cures for devastating diseases to clean, renewable energy to sustainable agriculture. But we need to meet the immediate challenges posed by the global economic crisis while ensuring that public policy issues like the development of a regulatory pathway for biosimilars, patent reform, guidelines on stem cell research and more take into account our industry's positions and contributions.

In nominating Gov. Kathleen Sebelius to head the Department of Health and Human Services (HHS) and Dr. Margaret Hamburg to lead the Food and Drug Administration (FDA), President Barack Obama has signaled a strong commitment to public health and science. These agencies play critical roles in helping to ensure the health and safety of all Americans. In particular, reinvigorating the FDA with strong leadership is critical to preserving the integrity of scientific decisions and promoting the sense of mission at the agency. Dr. Hamburg, with her background in public health, bioterrorism and HIV/AIDS research, is uniquely qualified to address the range of issues under FDA's charter. This agency has tremendously important responsibilities, yet it has been underfunded in recent years.

Biotechnology companies will continue to work closely with the HHS and FDA on a number of shared challenges, in particular to answer the president's call to provide affordable, quality healthcare for all Americans and to find a cure for cancer "in our time." We are greatly encouraged by the president's commitment to innovation and his support for scientific discovery.

In March, President Obama issued an executive order to allow the National Institutes of Health (NIH) to fund embryonic stem cell research, which will open the door to promising new research by life scientists working on treatments for a range of debilitating diseases and disabilities. Earlier this year, a biotechnology company based in California announced it was beginning clinical trials on stem cell-based therapies to treat spinal cord injuries. Clearly, we are on the cusp of amazing new biomedical discoveries that will greatly impact patients and their families, and allowing federal funds to finance basic research at universities will speed this process.

Funding basic research is just the first step in a long and complex process that will lead to new scientific breakthroughs and discoveries. The path from an initial discovery in a laboratory to a safe and effective therapy can take a decade or more of research and development and more than $1 billion in investment. Along the way, there are a number of factors that impact our ability to succeed. From the stability of global financial markets to the ability of the FDA to review new applications, our industry's ability to bring new medicines through the pipeline is dependent on many external considerations.

Once therapies are brought to the marketplace, our companies face new challenges. One of the top items on the White House and Congressional agenda is determining the best way to develop a pathway for approving biosimilars (also known as follow-on biologics), medicines that imitate, but are not identical to, pioneering biologics. One thing is certain: biosimilars will be part of the future healthcare landscape. Policymakers have been debating the best way to regulate and approve these medicines for the better part of a decade, but the issue takes on added urgency in the current political and economic environment. Many policymakers are focused on reducing health care costs, many elected officials have made personal pledges to fight against diseases like cancer and almost every member of Congress is concerned about retaining jobs in his or her district.  The issue of biosimilars impacts all three challenges. And if there was any doubt about the prominence given to this issue these days in Washington, President Obama stated recently his commitment to developing biosimilars as part of his broader healthcare agenda.

Any pathway for biosimilars must be based on sound science to ensure that biosimilars are safe and effective, preserve and maintain the doctor-patient relationship and preserve the incentives necessary for the development of new therapies and cures to meet unmet medical needs. There are a number of competing versions of biosimilars bills in the House and the Senate, and we are working with policymakers in both parties to ensure that a regulatory pathway protects patient safety and provides incentives for continued innovation.

The approval of biosimilars will have tremendous impact on biotech companies of all sizes. Since the beginning of the year, a number of major biotechnology and pharmaceutical companies in the United States have announced that they will become involved in developing biosimilars, in anticipation of a new regulatory environment. For the developers of pioneering biologics, this new regime means increased competition and a renewed sense of urgency to move innovative new therapies through the pipeline. For companies entering the biosimilars market—including companies that manufacture pioneering biologics—it means ramping up for a new line of business.

The implications for biotechnology researchers are not limited to the United States. In Europe, a regulatory path for the development of biosimilars already exists, and in Asia, biotechnology companies see biosimilar regulatory policy in Europe and the United States as potential for new business opportunities. The policies decided on Capitol Hill will have wide-reaching consequences all over the globe.

The right path to developing biosimilars in the United States is about more than just expanding options for patients and reducing costs. It is also essential that the regulatory pathway maintains incentives for biotech innovation to continue to advance and produce the next generation of needed medical therapies. The United States continues to lead the world in investment in biotech research. According to a recent Ernst & Young report, the U.S. biotech industry spends four times the combined amount of Europe, Canada and Asia-Pacific on research and development ($25.8 million vs. combined $5.97 million for the other three regions combined). Clearly, any legislation that would dampen research investment in the United States will have a tremendous impact on global biotech and on patients worldwide.

While Congress is moving quickly to address biosimilars and to review the president's top appointments, we are eager to learn more about the president's approach to comprehensive healthcare reform and to participate in the national debate. To date, the president has expanded the State Children's Health Insurance Program (SCHIP), which is an important step to improving the nation's health by providing health coverage for those who cannot cover themselves—America's children.

For biotechnology companies, preserving universal access to innovative therapies will be critical. Limiting access to innovative medical technologies can delay care, ultimately resulting in poorer health outcomes and higher healthcare costs. And any reform of healthcare must continue to recognize the role played by life-saving biologics, as well as their potential to revolutionize how we treat diseases and disabilities.

Maintaining incentives for biomedical innovation is just one of the major challenges—and opportunities—our industry faces at this critical juncture. Others include patent reform, expanding access to healthcare, strengthening the FDA and addressing the economic challenges that all companies are facing.

The uncertain state of the economy continues to have an important impact on biotechnology companies. A Biotechnology Industry Organization (BIO) analysis from earlier this year found that 125 of the 370 U.S.-based public biotech companies now have less than six months of cash—a 90 percent increase in close-to-broke companies compared to 2007—and about 40 percent of small private biotechs have less than one year of cash. Since the freezing of credit markets late last year, Congress and the administration have been looking at ways to provide relief for our small companies that are having a tough time during the current credit crunch.

There are a number of challenges facing our industry in 2009, but we must confront them and take advantage of the changing political and economic landscape to push the boundaries of science to treat—and ultimately defeat—debilitating diseases.

James C. Greenwood is president and CEO of the Biotechnology Industry Organization (BIO) in Washington, D.C., which represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the U.S. and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. The issues presented in this commentary will be explored at the 2009 BIO International Convention May 18-21 at the Georgia World Congress Center in Atlanta. For more information, please visit

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