Still, the generics industry could very quickly win approval for some of the more basic biologics, such as Epogen, a drug with $2.5 billion in sales last year that went off-patent in 2005. “The reason this is a big battle,” says Mandel of Temple University, “is that the biologics that are going off patent now are the earliest and simplest, the ones where generics could capture the greatest market share.” In the longer term, though, provided reasonable allowances are made for data exclusivity, the impact on innovator firms may not be all that great.Beyond the big-ticket items, there are lesser bills and issues on Congress’ radar screen that may come up for a vote this year:

Genetic non-discrimination rules. Legislation to forbid insurance companies from using genetic information to discriminate against individuals is very close to passage. At the moment, however, Senator Tom Colburn (R-OK) has put a hold on the bill, arguing that it could lead to frivolous lawsuits. “His excuses don’t make sense,” Representative Louise Slaughter (D-NY), the bill’s sponsor in the House, told reporters. “But if the bill got to a floor vote in the Senate, I think it’d pass almost unanimously.” Companies offering genetic tests have declared that their business won’t gain traction unless Congress puts in place non-discrimination rules that will ease customer concerns.

Mental health parity rules. Proponents say that mental health parity rules, which forbid insurers from treating mental disorders differently from other diseases, can help combat the stigma of mental illness and enable coverage. That, in turn, could expand the market for innovative treatments. In December, Congress passed a one-year extension of a rule preventing group health plans from setting lower dollar limits on coverage for mental disorders than for other conditions. Both the Senate and House are now looking at more permanent, far-reaching reforms: one House bill, for instance, would require any mental condition listed in the psychiatric industry’s compendium to be covered by group plans. “That could happen in the next six months,” says one lobbyist following the issue.

Electronic medical records. Currently, there is no national standard for electronic medical records, only a patchwork system. As Kim of Foley Hoag explains, fixing this could bolster life sciences innovation: “If [pharmaceutical companies] could find ways of mining data using electronic health records, exploring longitudinal datasets and patterns of utilization as part of acute care, well, that’s the grand vision. [They] would have so much more information to ask and answer different questions about safety and efficacy.” The Senate attempted to pass the Wired for Health Care Quality Act in November, which would set national standards for electronic recordkeeping, but failed after doctor and patient groups voiced concerns about privacy protections. The bill will come up again this year.

Comparative effectiveness oversight. There is a small chance that Congress could reconsider legislation to create a comparative effectiveness oversight board that would weigh different drugs and devices against each other. “If it happens this year,” says lobbyist Rosen, “it will have to be part of a broader Medicare bill, and that will cost money to do.” Under Congress’ current pay-as-you-go spending rules, that may be unlikely.

Small business grants. BIO’s Greenwood notes that his organization will be closely watching the fate of small-business grants from the government, which have historically helped biotech startups. In 2001, however, the Small Business Administration ruled that companies majority-owned by venture capitalists could not qualify for SBIR (Small Business Innovation Research) grants. BIO is trying to get the ruling reversed by Congress, and Greenwood expects to see action on that this year.

Medical device legislation. AdvaMed is keeping a close eye on pending legislation in the Senate that would require Medicare to reimburse doctors for remote monitoring of patients with chronic diseases—a technique that can improve care and reduce hospitalization. “The key driver of cost in our healthcare system is chronic disease,” says AdvaMed’s Nexon. “But doctors don’t get paid if they’re using remote monitoring. We’re optimistic that that could change.”

FDA tobacco regulations. Congress has been debating a bill giving the FDA the authority to regulate tobacco products and marketing. One lobbyist pegs the chances of passage this year at “50-50—and possibly higher.” Although most onlookers in the life sciences industry aren’t paying close attention, lobbyist Allard says the new law could have a major impact. “Even if the bill provides the FDA new funding, it’s a fair question whether undertaking that massive operation could divert resources away from overseeing drugs,” he points out. “People don’t always connect the dots.”

Immigration reform. Attracting a greater number of high-skill immigrants to the United States could have a dramatic impact on the future of medical innovation. “Any serious innovator is going to have a multinational research team,” says Allard. “So addressing how companies can attract the brainpower they need is a big issue.” In an election year, however, Congress is almost certain to shy away from immigration.

Looking ahead, the biggest issue facing the life sciences industry may be the prospect of legislation to control rising healthcare spending in the United States. “The biggest challenge we face is the tendency of policymakers to try to reduce healthcare costs,” says Greenwood. “Those intentions, good intentions, can, if we’re not careful, lead to a constriction in the availability of resources for innovation.” Nexon agrees: “I do think healthcare reform is coming, not [in 2008], but there will likely be a big health reform effort in 2009, and it’s important for the industry to get out front both on coverage and cost containment—to make sure that, in an effort to control costs, people don’t hinder innovation.”

Bradford Plumer is an assistant editor at The New Republic.

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