Bio/Pharm Legislation Watch

By Donald Zuhn --

While the patent community has been focusing on Congress' efforts to enact patent reform legislation over the past few months, a number of other bills have been introduced that could, if enacted, significantly impact the biotech and pharma sectors.

Stem Cell Research Advancement Act of 2011

Last month, Rep. Diana DeGette (D-CO) introduced the Stem Cell Research Advancement Act of 2011 (H.R. 2376).  The bill is similar to legislation that Rep. DeGette introduced in 2006 and 2007.  While her previous efforts in Congress were successful, President Bush vetoed both of the earlier bills.

Rep. DeGette's latest effort would amend the Public Health Service Act (Title 42) to provide that "the Secretary shall conduct and support research that utilizes human stem cells, including human embryonic stem cells."  In particular, the bill would require that the Secretary, in consultation with the Director of the NIH, "maintain guidelines applicable to the conduct or support of human stem cell research by the Department of Health and Human Services," review the guidelines every three years, and update the guidelines "as scientifically warranted."  The legislation also prohibits funding for human cloning, which is defined as "the implantation of the product of transferring the nuclear material of a human somatic cell into an egg cell from which the nuclear material has been removed or rendered inert into a uterus or the functional equivalent of a uterus."  The bill has been referred to the House Committee on Energy and Commerce.

In a press release posted on her website, Rep. DeGette said that the legislation "would place into statute a framework to ensure such critical research can be conducted unimpeded by political interference."

Confirming Genetic Diagnostic Test Activity Legislation

Prior to House passage of the Leahy-Smith America Invents Act (H.R. 1249), Rep. Debbie Wasserman Schultz (D-FL) was able to squeeze a provision into House Judiciary Chairman Lamar Smith's (R-TX) Manager's Amendment that would allow a "genetic diagnostic test provider" to perform "confirming genetic diagnostic test activity" without fear of facing a patent infringement action (see "Manager's Amendment (and Others) to H.R. 1249 -- Second Opinions in Genetic Diagnostic Testing").  That provision of the House bill was eventually replaced with a provision calling for a study to be conducted by the USPTO Director "on effective ways to provide independent, confirming genetic diagnostic test activity where gene patents and exclusive licensing for primary genetic diagnostic tests exist."  The Senate bill contains no provisions regarding confirming genetic diagnostic test activity.

On June 22, one day before the House passed H.R. 1249, Rep. Wasserman Schultz introduced a standalone bill (H.R. 2276) that would "require the Director of the United States Patent and Trademark Office to conduct a study on effective ways to provide confirming genetic diagnostic test activity where gene patents and exclusive licensing exist."  As with H.R. 1249, H.R. 2276 would require that the Director's study include an examination of:

(1) The impact that the current lack of independent second opinion testing has had on the ability to provide the highest level of medical care to patients and recipients of genetic diagnostic testing, and on inhibiting innovation to existing testing and diagnoses.

(2) The effect that providing independent second opinion genetic diagnostic testing would have on the existing patent and license holders of an exclusive genetic test.

(3) The impact that current exclusive licensing and patents on genetic testing activity has on the practice of medicine, including but not limited to the interpretation of testing results and performance of testing procedures.

(4) The role that cost and insurance coverage have on access to and provision of genetic diagnostic tests.

The bill has been referred to the House Committee on the Judiciary and Committee on Energy and Commerce.

Medical Innovation Prize Fund Act

In May, Sen. Bernard Sanders (I-VT) introduced the Medical Innovation Prize Fund Act (S. 1137), which is intended "[t]o provide incentives for investment in research and development for new medicines, [and] to enhance access to new medicines."  The bill would accomplish these objectives by establishing a Medical Innovation Prize Fund (equal to 0.55% of the gross domestic product -- or $80,000,000,000 in 2011) and "by eliminating legal monopolies on the manufacture, distribution, and sale of . . . medicines."  Section 5 of the bill, entitled "Elimination of Exclusive Rights to Market Drug and Biological Products," states that "no person shall have the right to exclusively manufacture, distribute, sell, or use a drug, a biological product, or a manufacturing process for a drug or biological product in interstate commerce."

The legislation provides that "in lieu of any remuneration the person would have otherwise received for the exclusive marketing, distribution, sale, or use of a drug, biological product, or manufacturing process for a drug or biological product," and "in addition to any other remuneration that such person receives by reason of the nonexclusive marketing, distribution, sale, or use of the drug, biological product, or manufacturing process for a drug or biological product," the person would be "eligible for prize payments from the Fund."  The bill would create a 13-member Board of Trustees for the Fund that would, in part, "award prize payments for medical innovation in accordance with this Act."  The bill also sets forth prize eligibility criteria to be considered by the Board.  Following its introduction, the bill was referred to the Senate Committee on Health, Education, Labor, and Pensions.

Sen. Sanders introduced a similar bill (the Prize Fund for HIV/AIDS Act, S. 1138) for "de-link[ing] research and development incentives from drug prices for new medicines to treat HIV/AIDS."  S. 1138 would create a Prize Fund for HIV/AIDS in an amount equal to 0.02% of the gross domestic product.

Seed Availability and Competition Act of 2011

Earlier this year, Rep. Marcy Kaptur (D-OH) introduced the Seed Availability and Competition Act of 2011 (H.R. 307).  The legislation specifies that "[a]ny person who plants patented seed or seed derived from patented seed may retain seed from the harvest of the planted seed for replanting," provided that the person retaining such seed "submits to the Secretary of Agriculture notice, in such form as the Secretary may require, of the type and quantity of seed to be retained," and "pays the fee established by the Secretary."  The fees collected by the Secretary will be deposited in a Patented Seed Fund, and the Secretary "shall pay the collected fees to the appropriate patent holders, at a frequency that the Secretary determines is appropriate, from the Patented Seed Fund."  The bill would also allow the Secretary of the Treasury to impose a duty on products of certain exported genetically modified seeds when those products are imported into the United States.  The bill was referred to the House Committee on Agriculture and Committee on Ways and Means following its introduction in January, and was referred to the Subcommittee on Nutrition and Horticulture and Subcommittee on Rural Development, Research, Biotechnology, and Foreign Agriculture (both of which are part of the Committee on Agriculture) in March.

Patent Continuing Disclosure Act

Both the House and Senate versions of the Leahy-Smith America Invents Act (H.R. 1249 and S. 23) would amend the false marking statute (§ 292) of Title 35.  In the House version of the bill, § 292 would be amended to state that "[o]nly the United States may sue for the penalty authorized by [subsection (a)]" and replace current subsection (b) with the following:  "A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury" (the Senate version would make nearly identical changes to § 292).  The House bill would also amend § 292 such that "[t]he marking of a product . . . with matter relating to a patent that covered that product but has expired is not a violation of this section."

In March, Rep. Darrell Issa (R-CA) introduced the Patent Continuing Disclosure Act (H.R. 1056), which also addresses the marking of products with an expired patent.  In particular, the bill would amend § 292 such that an item that is marked "shall not be fined under this section after the patent expires if-- (A) no change in the manufacturing or production process of the item occurs after the expiration of the patent; or (B) in a case in which a change in the manufacturing or production process of the item occurs after the expiration of the patent, the word 'expired' is placed before the word 'patent' or the patent number."  The bill was referred to the Subcommittee on Intellectual Property, Competition and the Internet of the House Committee on the Judiciary.

Comments

[Dan Feigelson]

Don, yet again I marvel at your reserve in refraining from comment when reporting some of these bills.

Regarding the Schultz bill, is the director of the USPTO the best-situated person to carry out the study she's proposing? I don't think anyone at the PTO has expertise in providing health care to patients. And does the bill include funding provisions, or if enacted is the funding for this study going to come from those fees left over after the House has diverted the rest to pork, at the expense of the PTO's ability to operate in its area of competence, viz. patent examination?

[Rodney Sparks]

Biotech, Pharma, and Ag must love Schultz, Sanders, and Kaptur.

[Donald Zuhn]

Dan:

H.R. 2276, S. 1137, S. 1138, and H.R. 307 have a combined total of 0 co-sponsors, so it is easy to remain objective. As for H.R. 2276, it does not have any funding provisions (neither does the parallel provisions of H.R. 1249).

Thanks for the comment.

Don

[EG]

Rodney,

Amen to your comment. These folks in Congress seem expect something for nothing. That's not going to encourage Biotech, Pharma or Ag to pour large amounts of money into research, only to get an inadequate return on that investment because of what is effectively "compulsory licensing."

[staff]

"patent reform"

The bill recently passed by the House and Senate is nothing less than another monumental federal giveaway for banks, huge multinationals, and China and an off shoring job killing nightmare for America.

Just because they call it “reform” doesn’t mean it is. Even the leading patent expert in China has stated the bill will help them steal our inventions. Who are the supporters of this bill working for??

Patent reform is a fraud on America. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and killing their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. Yet small entities create the lion's share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs. Those wishing to help in the fight to defeat this bill should contact us as below.

Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors.

Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.
http://docs.piausa.org/

[6]

"The legislation specifies that "[a]ny person who plants patented seed or seed derived from patented seed may retain seed from the harvest of the planted seed for replanting," provided that the person retaining such seed "submits to the Secretary of Agriculture notice, in such form as the Secretary may require, of the type and quantity of seed to be retained," and "pays the fee established by the Secretary." "

W T F? repeated 10x.

So instead of simply oh, I don't know, allowing farmers to use the seed that comes from the seed they bought (i.e. the "right" thing to do) they'd rather have the sec collect fees and pay them to the patent holders?

THE BEST CORRUPTION MONEY CAN BUY.

"H.R. 2276, S. 1137, S. 1138, and H.R. 307 have a combined total of 0 co-sponsors"

Thank go d for small miracles eh?

In May, Sen. Bernard Sanders (I-VT) introduced the Medical Innovation Prize Fund Act (S. 1137), which is intended "[t]o provide incentives for investment in research and development for new medicines, [and] to enhance access to new medicines." The bill would accomplish these objectives by establishing a Medical Innovation Prize Fund (equal to 0.55% of the gross domestic product -- or $80,000,000,000 in 2011) and "by eliminating legal monopolies on the manufacture, distribution, and sale of . . . medicines." Section 5 of the bill, entitled "Elimination of Exclusive Rights to Market Drug and Biological Products," states that "no person shall have the right to exclusively manufacture, distribute, sell, or use a drug, a biological product, or a manufacturing process for a drug or biological product in interstate commerce."

On the other hand we have this chap with a good idea and yet not much support. I guess he couldn't get the bio lobby on his side :(