Dangling the carrot

New genomics bill in House offers tax credits for companion diagnostics

Jeffrey Bouley
WASHINGTON—Building on the foundation of a bill that was introduced by U.S. Sen. Barack Obama (D–Ill) in 2007 but which has languished in committee, U.S. Rep. Patrick Kennedy (D–R.I.) is trying for another go-round in the 111th Congress with his Genomics and Personalized Medicine Act of 2008 (H.R. 6498) which brings with it tax incentives to lure researchers into the field of personalized medicine research.
According to Kennedy, the bill is aimed at enhancing the scope of personalized medicine for all Americans by intensifying genomics research. It will also encourage initiatives that will help improve the accuracy of disease diagnosis, increase the safety of drugs and identify novel treatments.

The bill is still very early in its travels, though, and has been referred to the House Ways and Means Committee and to the House Energy and Commerce Committee. Dora Hughes, Obama's Senate health policy advisor, previously said the Senate's version of the personalized medicine bill might be marked up this fall. But Edward Abrahams, executive director of the Personalized Medicine Coalition, predicts reintroducing Obama's bill in the Senate or reconciling the Senate and House versions, particularly with regard to the item on tax credits, will not happen until next year.

The new spin in Kennedy's bill are provisions for establishing tax and test credits for research expenses incurred by pharmaceutical manufacturers in the development of companion diagnostic tests.

Certainly, barriers to therapeutic-diagnostic combination products abound, among them divergent development timelines and the lack of a regulatory pathway promoting co-development of combination products. But Kenneth G. Krul, Ph.D., a senior analyst for Kalorama Information, isn't at all convinced that tax credits are a good plan.

"These guys don't need tax credits," he insists. "Companion diagnostics to personalized medicine are a must for them, not an option that they can or cannot elect. With research into disease and drug efficacy being more and more specific these days, the day of the broad spectrum drug is in its evening heading for night.  Insurers aren't going to pay for things that may or may not work throughout a disease population."

According to Krul, all signs point to pharmaceutical companies saving hundreds of millions of dollars on target selection and clinical trials through companion diagnostics.

"The taxpayer does not need to subsidize this," he says. "[Paying for companion diagnostics] may reduce revenues on individual drugs, but it will allow the pharma companies to get more drugs out faster and more profitably."

Krul also worries the bill will create extra—and unnecessary—bureaucracy. Gail Javitt, law and policy director for Johns Hopkins University's Genetics and Public Policy Center agrees, noting although the continued focus on personalized medicine in the House and Senate are good signs, creating more layers of bureaucracy might actually slow progress in genomics.

Krul also predicts if H.R. 6498 becomes law, it will mean mountains of paperwork that would overload labs and the FDA. He argues that the wealth of publicly accessible genetics databases out there already make a National Biobanking Initiative like the one the bill would create virtually pointless.

"We already have GINA [the Genetic Information Non­discrimination Act, signed into law in May 2008], that does a lot of what this bill aims to, but without the extra problems," Krul says. DDN

Jeffrey Bouley

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