It’s an uncertain time for the pharmaceutical and biotechnology industries. Last year, the U.S. Food and Drug Administration approved just 14 new molecular entities and two biologics, making 2007 one of the worst years for drug innovation in more than a decade. Meanwhile, drug-safety concerns continue to grab headlines, and several leading presidential candidates have put forth plans to curb healthcare costs. Little wonder that onlookers are eager to know what Congress has in store for the life sciences industry this year, and how new legislation might affect medical innovation.

In 2007, House Democrats pledged to boost support for stem cell research and increase government R&D funding. They also vowed to give Medicare the power to negotiate drug prices directly with pharmaceutical companies, a measure strongly opposed by industry groups. But most of these changes have yet to arrive, as the Democrats’ legislative agenda has been stymied by White House vetoes and Senate infighting.

The expectation for 2008 is that Congress will again be relatively quiet—but not completely. Patent reform legislation and bills creating a pathway for follow-on biologics will likely come up for votes in the months ahead. Congressional drug-safety hearings could affect the way the FDA does business, while scores of smaller bills—from genetic non-discrimination rules to small-business grants—could have significant effects on medical innovation. True, most lobbyists and trade groups are looking ahead to 2009, when a new, and presumably Democratic, president could push for sweeping healthcare reform. But there’s still plenty to focus on in this session.

The hand of Congress will be felt most powerfully in 2008 through the FDA Amendments Act (FDAAA), passed last fall but taking effect this year. Many consider this to be the most significant revision to drug-safety rules since 1962, when the agency received the authority to require clinical trials before approving new drugs. In addition to reauthorizing user fees for drugs and medical devices, the law allocates new resources for monitoring post-marketing safety—to check for problems not caught in pre-approval trials—and gives the FDA the authority to order speedy changes in labeling whenever new information comes to light. Surprisingly, the agency has never had this authority; after new data on the increased risk of heart attacks and strokes associated with Vioxx surfaced, it took 14 months to negotiate changes in labeling. (The painkiller was eventually recalled.)

How will the new law affect medical innovation and drug development? James C. Greenwood, president and CEO of the Biotechnology Industry Organization (BIO), is optimistic: “We were worried that, in the wake of Vioxx, there would be draconian safety provisions, but we avoided that.” Greenwood notes that FDAAA also included a patent extension for pediatric drugs, which could bolster innovation in medicine for children. David Nexon, senior executive vice president of the Advanced Medical Technology Association (AdvaMed), expects the user-fee legislation to have several positive impacts: “The older user-fee structure was unstable, and [fees] shot up more than people expected in some years. Now there’s a stable fee structure. We also negotiated a lowering of application fees, which sometimes placed a significant burden on some innovative products.”