Biotechnology Fundamentals Solid
WASHINGTON, D.C. (September 20, 2001) - In the wake of the September 11 terrorist attack, the United States' legislative agenda has changed dramatically and the major stock indexes, including those that track biotechnology, have fallen. But the fundamentals of the biotechnology industry remain solid:
- More than 120 biotechnology medicines and vaccines have been approved in the United States, and more than 350 are in late-stage development.
- Biotech firms have attracted more than $50 billion in investment over the last two years.
- A growing number of biotech companies are profitable, and the ranks of companies with FDA-approved medicines have continued to swell. In the last six months, three BIO members have joined those ranks.
- Biotechnology research often addresses important unmet health-care needs, and markets are typically resistant to economic downturns.
The existing U.S. legislative and regulatory environment has generated a robust biotechnology industry, and that environment is unlikely to change dramatically in the coming months, according to Lee Rawls, vice president for government relations at the Biotechnology Industry Organization (BIO).
"The federal government is doubling the budget of the National Institutes of Health, which funds basic research, and the president recently agreed to fund stem cell research on a limited basis," said Rawls. "The president's budget for the FDA includes welcome increases for the operation of the agency. Moreover, our industry enjoys strong intellectual property protection, a drug regulatory agency that has cut its average application review period significantly without sacrificing safety, and orphan-drug and fast-track regulations that ensure drugs for the neediest patients receive top priority."
Even as Congress and the Bush administration concentrate on defense and economic issues in the coming months, some biotechnology issues are likely to surface:
- Investment incentives. Congress and the president are considering cuts in the capital gains tax rates, including measures endorsed by BIO that would cut such taxes for investments in early-stage biotechnology companies. A separate measure, introduced in June, would allow biotech companies to earn a credit for net operating losses related to research and development. These measures would bolster investment incentives in an uncertain economy.
- PDUFA renewal. Negotiations between BIO and the FDA on the renewal of the Prescription Drug User Fee Act will continue through the fall. PDUFA is slated to expire in 2002.
- Biological defense. BIO President Carl B. Feldbaum met with officials of the Department of Defense Tuesday to discuss ways the biotechnology industry can contribute to the country's needs in this time of crisis.
Biotech issues that were to have been debated in Congress this fall but may now be delayed include a large-scale Medicare reform and drug coverage bill, said Rawls. Also, several September hearings on stem cell research and other bioethics issues have been postponed.
BIO represents more than 1,000 biotechnology companies, academic institutions, state biotechnology centers and related organizations in all 50 U.S. states and 33 other nations. BIO members are involved in the research and development of health-care, agricultural, industrial and environmental biotechnology products.
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