BIO Strongly Opposes Compulsory Licensing Legislation

WASHINGTON, D.C. (Sept. 23, 1999) The Biotechnology Industry Organization (BIO) strongly opposed a bill introduced today by U.S. Rep. Sherrod Brown (D-Ohio), saying it would undermine this nation's reliance on private sector investment and innovation in health care and deprive patients of new life-saving medicines.

The proposed legislation would establish compulsory licensing ofany and all "health related" patents by their owners to another company if the secretary of the U.S. Department of Health and Human Services finds it is "necessary to alleviate health or safety needs which are not adequately satisfied by the patent holder."

BIO's vice president of government relations, Chuck Ludlam, said"This legislation is an unprecedented assault on our free enterprise system. The main intent of Brown's bill apparently is to control prescription drug prices by forcing companies to sell their products at below market value or risk having their intellectual property confiscated. The precedent it would set for others, such as software and electronics inventors, is breathtaking.

"Congressman Brown's legislation, however, not only givesgovernment effective control of drug pricing, but also allows it to manipulate formulation, manufacturing, marketing, distribution and research. For biotech companies, it would be like being placed in front of a firing squad that is ordered to shoot as soon as you do something the government doesn't like.

"This bill would severely impede new drug development,"Ludlam added, "hurting the patients Congressman Brown says he is trying to help. Most of the biotech medicines on the market and in development are aimed at diseases where no treatments currently are available.

"Private capital investment is the life-blood of our research-basedindustry and that financial support is built on strong product patent portfolios, which allow our companies limited market protection against competitors. Without that market protection, biotech companies would have no way of recouping the hundreds of millions of dollars it takes to develop a drug, and investors would have no incentive to risk their money.

"The capital markets need to know that this is not a mainstreamproposal with any prospect for enactment," Ludlam emphasized. "It stakes out one extreme in the ongoing Congressional debate on access to drugs.

"Congressman Brown in the past has supported biomedicalresearch and the development of new therapies and cures for our most intractable and debilitating diseases. This bill contradicts that position.

"We strongly urge Congress to reject this attempt to substitutegovernment controls for a free market system that has given us the most advanced health care in the world."

BIO represents more than 830 biotech companies, academicinstitutions and state biotech centers in 47 states and 26 nations. Its members are involved in the research and development of health care, agricultural, industrial and environmental biotechnology products.