Robert N. Sahr
In an effort to reduce the costs of medicine for patients, Congress must be especially careful not to impair the ability of the biotechnology industry to thrive by substantially diminishing profitability. Currently, the biotechnology industry is “still relatively nascent” and is largely fueled by venture capital investment. Of the approximately 1400 biotechnology companies operating in the United States today, only twenty are profitable. Many of these companies are small, with revenues of under a million dollars per year, and do not even have a product on the market yet. Leaders in the biotechnology industry have expressed concern over the ability to secure investments in the wake of new biologics legislation: Biotechnology researchers must have some certainty that they can protect their investment in the development of new breakthrough therapies for a sufficient period of time in order to secure necessary financial resources. If … legislation were to fail to provide adequate protections, it could jeopardize the ability of biotechnology researchers to continue to innovate. In June 2007, a bipartisan bill sponsored by Edward Kennedy (D- Mass.), and co-sponsored by Hillary Clinton (D- N.Y.), Orrin Hatch (R- Utah), Mike Enzi (R-Wyo.), and Charles Schumer (D- N.Y.), titled the Biologics Price Competition and Innovation Act of 2007 (“BPCIA”), was introduced to and unanimously passed by the Senate Committee on Health, Education, Labor, and Pensions. The BPCIA seeks to balance patients’ needs for affordable biologic medicine with the needs for innovation in the biotechnology industry to continue to develop new therapeutics. This Note will discuss key provisions of the BPCIA and will analyze the likely impact of its passage on innovation in the biotechnology industry and patient access to lower cost biologic medicine. Part I will provide a brief background on biologics and the complexity of their manufacture. Part II will describe the regulation of small molecule drugs under the Food Drug and Cosmetic Act (“FDCA”) and the regulation of biologics under the Public Health Services Act (“PHSA”). In addition, the Hatch-Waxman amendments to the FDCA that allow for abbreviated new drug applications (e.g., generics) will be discussed. Part III will explain why legislative action is necessary for a viable path forward to abbreviated FDA approval of biologics. Part IV will describe key provisions of the BPCIA that lay the framework for regulation of follow-on biologics. Finally, in Part V, this Note will analyze the impact that enactment of the BPCIA might have on innovation in the biotechnology industry and patient access to lower cost biologic medicine.