America Needs a Biodefense Pharma Sector

July 21, 2005
Congress must fund and energize our biotechnology manufacturers to ensure our security, says the Generic Pharmaceutical Assn.
Americans deserve strong protections against bioterrorism, including cutting-edge countermeasures stockpiled and ready for delivery to our nation's population when terror strikes. Congress can best deliver on this national security priority by expanding upon the straightforward government contract and procurement model of BioShield I and energizing our innovative biotechnology manufacturers to create a biodefense pharmaceutical sector.By providing funding throughout the full development cycle of countermeasures, as well as additional tax credits and grants, product liability reforms and guaranteed purchasing, the federal government can secure our nation from bioterrorist attacks. Under a BioShield I model, the cost burden of this initiative will be spread among all U.S. citizens, not imposed on America's sick and elderly, as current Senate legislation now requires.The Generic Pharmaceutical Association (GPhA) strongly supports BioShield I and the government procurement model it established, and we recognize that further incentives are needed to enhance our nation's security during the war on terror. As Congress seeks to enhance Bioshield I, GPhA recommends the following additional provisions:
  • Product Liability Protections: These necessary provisions protect drug manufacturers as they develop and produce these potentially life-saving novel treatments. In the 1980s, many medical device and drug manufacturers argued that high liability awards and punitive damages deter firms from launching new products — or continuing old ones. Those concerns are still relevant today for both brand and generic pharmaceutical companies.

  • Guaranteed Purchasing: The federal government must commit to and follow through on purchases of countermeasures in sufficient quantity to stockpile so that manufacturers have predictability for their business models. In the case of childhood vaccines, for example, America is facing a shortage because the federal government has not guaranteed purchasing of these necessary medicines. With guaranteed government purchasing under BioShield, we could avoid a similar situation for countermeasures.

  • Research and Development Tax Incentives and Manufacturing Grants: The vast majority of research in America is outsourced by brand pharmaceuticals to biotechnology and other smaller companies. Rather than using the brand sector as the middleman, in most instances the federal government should energize research and development firms to create a biodefense pharmaceutical sector. Furthermore, consistent government funding throughout the full development cycle of countermeasures, as well as additional tax credits and grants, are needed to ensure production.

  • Support Building Facilities in America: Domestic production facilities will facilitate additional manufacturing capacity and assure availability.

  • "Fast-Track" FDA Review: Allowing the Food and Drug Administration to swiftly bring more countermeasures to market will ensure that countermeasures are available when they are needed.

  • Full Funding: Government funding throughout the full development cycle of a countermeasure is critical to ensure that the necessary investment for research and development of priority countermeasures is obtained and to avoid the "valley of death" for some companies.
Right Approach Vs. Wrong Approach for IncentivesUnlike the current legislative proposals, an appropriate model will reward only the actual production of a novel medicine designed to address a specific security need without jeopardizing the future affordability of the healthcare system. Several incentives advanced in current legislative proposals would do nothing to facilitate the development of novel medicines, including:
  • The overly broad definition of a countermeasure, which could be extended to already marketed products. Because the legislation fails to limit the term to novel medicines, which are clinically superior or fill a security priority void, patent extensions could be applied to a wide range of already approved drugs.

  • The extension of product monopolies through inappropriate market exclusivity provisions.

  • Unlimited and uncapped patent extensions on any countermeasure product. Under S. 975, multiple patents claiming the brand product could be extended for more than a decade.

  • "Wild card" provisions that could be applied to any product in a company's portfolio, thus providing a windfall to brand pharmaceutical companies for products wholly unrelated to bioterrorism.
As Congress looks to expand upon the BioShield program, it is imperative that the costs of any legislation be comparable to the security it would provide. The true focus of incentives should be toward the true researchers in novel countermeasures, not those only interested in extending their monopolies on currently marketed products.For more information, contact: Andrea Hofelich at 703-647-2495 or visit