Archive for 'Biotech Industry News'

Fallout Continues on Roche Bid for Genentech

Written by on Monday, August 18th, 2008

Despite Genentech’s rejection of Roche’s $43.7 billion offer last week, coverage of the fallout from the "failed" bid continues as industry observers speculate on Roche’s next move. 

According to a report by the Silicon Valley Business Journal and San Francisco Business Times, Reuters has forecasted that the final purchase price of Genentech will be $53 billion or $107.50 per share.  According to The Pink Sheet Daily, such a high price could prove to be problematic for Roche, who may be forced to make operational cuts as a direct result of the deal.

Speculation is also growing as to whether or not Genentech is going to be able to keep its talent in anticipation of a potential acquisition by Roche.  SF Gate reported that, as anticipated by analysts, there already is a flurry of recruiter activity erupting at Genentech as a result of the initial Roche bid.  The Pink Sheet Daily noted that it will be difficult to retain Genentech’s current talent, as many of the senior-level people will have no financial incentive to stay.   Of course, it goes without saying that the general atmosphere of uncertainty and the anticipated change of culture will likely start driving employees out the doors of Genentech.  However, observers seem to agree that Roche has likely worked the loss of key Genentech employees into the equation in deciding to pursue a bid to acquire the company. 

The Genentech/Roche deal is viewed as just the first of  a new wave of big pharma acquisitions of biotech companies to come in the near future, as pharma companies continue to explore opportunities to replenish their pipelines.  Seeking Alpha explained as follows:

Big Pharma is feeling the need to find new products with blockbuster potential as several important drugs approach the expiration of their patent protection. . .  . Many large pharmaceuticals have lots of cash on their balance sheets, making acquisitions an affordable option. The weaker dollar has also made U.S. companies look more attractive to biotech and pharmaceutical firms abroad. Another major factor is the difficult process of receiving FDA approval. This lengthy and grueling process provides an additional incentive to buy companies that have already received FDA approval on their drugs, ensuring smooth pipeline production going forward.

Potential buyout targets to keep an eye on: Amylin Pharmaceuticals (AMLN), United Therapeutics (UTHR),  Alexion Pharmaceuticals (ALXN), Onyx Pharmaceuticals (ONXX), Vertex Pharmaceuticals (VRTX).

To date, there has been no word on Roche’s next move or when it is likely to take place.  How high will Roche go with the next offer?  The California Biotech Law Blog will keep you posted on any developments.

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Genentech Declines Roche $43.7 Billion Acquisition Offer

Written by on Thursday, August 14th, 2008

Following up on our July 24th posting about Roche’s bid to acquire Genentech, it is now official: Genentech has declined Roche’s $43.7 Billion Acquisition offer.

A Genentech press release explained the decision as follows:

The special committee of the Board of Directors of Genentech, Inc. announced that, after careful consideration, it has unanimously concluded that Roche’s proposal to acquire the shares of Genentech not owned by Roche for $89.00 per share substantially undervalues the company. Therefore, the special committee does not support the proposal. However, the special committee would consider a proposal that recognizes the value of the company and reflects the significant benefits that would accrue to Roche as a result of full ownership.

The Genentech press release further indicated that the special committee also approved the "implementation of a broad-based employee retention program to address any employee concerns created by the Roche proposal."

Will Roche increase its offer, now that its opening bid has been rejected? If so, what will it cost for Roche to close the deal? 

My expectation is that Roche will make another offer and that the next offer will be larger than the first.  However, it is an open question as to how much money Roche will have to pay to get the deal done.  According to Seeking Alpha, the final sale price is likely to be over $105 per share and could even be as high as $130 per share.   Either way, there is no question that Roche is going to have to come up with more money to get the deal done. 

The California Biotech Law Blog will continue to keep you posted as any new developments regarding the Roche-Genentech talks arise.

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Life Sciences Companies Spent Record Amount on Lobbying Efforts in 2007

Written by on Tuesday, June 24th, 2008

The Baltimore Business Journal is reporting that life sciences companies spent a record amount on lobbying efforts in 2007–some 32 percent more in 2007 than in 2006.

The Baltimore Business Journal reported:

The industry unleashed a $168 million lobbying effort last year, the largest among all sectors and 90 percent of which was dominated by three biotech and pharmaceutical trade groups and 40 global companies. . . . Among top company spenders were British-based AstraZeneca PLC, which owns Gaithersburg-based MedImmune and tallied $4.1 million in lobbying efforts, and Israel-based Teva Pharmaceuticals, which owns Rockville-based CoGenesys and tallied $2.3 million. Amgen Inc., based in Thousand Oaks, Calif., topped the company list with a $16.3 million total contribution last year.

As the California Biotech Law Blog previously reported, BIO spent $6.6 million in lobbying efforts in 2007.

According to The Baltimore Business Journal, the industry’s investment seems to “have paid off.”

Was the investment really dollars well spent?  Well, clearly the industry has had some success with respect to delaying the passage of patent reform legislation, which was largely viewed as being more favorable to high tech companies than biotech companies.  Likewise, the lobbying efforts seem to have had some success in the SBIR area, as we previously reported in a recent blog posting.  So, the industry has definitely seen some success in Washington this past year, although that success has not been felt uniformly across the board.

There is no doubt that having a voice in Washington is taking on increasing importance for the life sciences industry, particularly in light of the lobbying efforts of the technology world.  It seems likely that the industry’s investment in lobbying will continue to grow in the near future, as the topic of health care reform continues to be a key political issue and the interests of technology and life sciences companies continue to diverge.  As I’ve suggested before, however, it is rather stunning to consider how much money that has to be invested these days in order to maintain a presence in Washington politics: $168 million is certainly not pocket change.

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DNA Testing Companies Pulling Out of California Direct-to-Consumer Market

Written by on Tuesday, June 24th, 2008 is reporting that three DNA testing companies are pulling out of the California direct-to-consumer market, as a result of California’s recent action to send cease and desist letters to thirteen DNA genetics testing companies (See our recent  blog posting).

Alexis Madrigal for reported yesterday that HairDx decided “on advice of legal counsel, to require California (and New York) residents to order their tests through a doctor.”  Then today, Madrigal reported that two additional genetics companies, Sciona and SeqWright, have decided to pull out of the California market.  According to Madrigal, SeqWright “ceased allowing tests from the state without even getting rapped by regulators.”

Will other DNA testing companies soon follow suit? It seems that the State of California’s actions may very well prove to have had a chiling effect over the whole DNA direct-to-consumer industry.  As Madrigal in his column suggests, this may have very well been the intended result.

At least one company, however, may be prepared to take this fight to the next level.  Madrigal reported today that 23andMe seems to be standing its ground.  The company appears to be taking the position that it is in compliance with California law and is going to continue to sell in California at this time.  There is no word yet as to whether any other DNA testing companies are prepared to stand up to the state and challenge its regulatory actions.

It’s hard to see how these developments are good for the State of California.  One would have expected that a state as proactive as California with respect to promoting biotechnology and stem cell research would not have taken such a hard stance against direct-to-consumer DNA testing.  Will this incident ultimately prove to be the nail in the coffin for DNA testing services?  Certainly, California’s actions have the potential to initiate a wave of similar actions across the country, as other states may feel pressured to follow California’s lead.

The California Biotech Law Blog will continue to follow developments on this issue as they arise.

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Fallout Over Genetic Testing Controversy Continues

Written by on Wednesday, June 18th, 2008

The fallout over California’s attempts to regulate genetic testing continued today as more facts over the California action came to light.

As the California Biotech Law Blog reported earlier this week , California’s Department of Health sent out cease and desist letters to thirteen genetic testing companies, including Navigenics, Inc. and 23andMe, Inc, demanding that these companies halt sales in the state until they can demonstrate that their laboratories are certified by the state and federal governments and that the tests have been ordered by a doctor as required by state law. is following the controversy, and has obtained copies of the letters that went out to at least two of the recipients.  Alleging that the companies violated California law, the letters cite eight statutory provisions of California’s Business and Professions Code in support of their allegations: Sections 1206(a)(4), 1220(d), 1241, 1246.5, 1265(a)(1), 1281, 1287(b)(3), 1288. 

These provisions state as follows:

    • 1206(a)(4):"Clinical laboratory test or examination" means the detection,
      identification, measurement, evaluation, correlation, monitoring,
      and reporting of any particular analyte, entity, or substance within
      a biological specimen for the purpose of obtaining scientific data
      which may be used as an aid to ascertain the presence, progress, and
      source of a disease or physiological condition in a human being, or
      used as an aid in the prevention, prognosis, monitoring, or treatment
      of a physiological or pathological condition in a human being, or
      for the performance of nondiagnostic tests for assessing the health
      of an individual.


    • 1220(d) (1) Each clinical laboratory shall perform all clinical
      laboratory tests or examinations classified as waived under CLIA in
      conformity with the manufacturer’s instructions.
         (2) Except for those clinical laboratories performing only tests
      or examinations classified as waived under CLIA, each clinical
      laboratory shall establish and maintain all of the following:
         (A) A patient test management system that meets the standards of
      CLIA in Subpart J (commencing with Section 493.1101) of Title 42 of
      the Code of Federal Regulations.
         (B) A quality control program that meets the requirements of CLIA
      in Subpart K (commencing with Section 493.1201) of Title 42 of the
      Code of Federal Regulations.
         (C) A comprehensive quality assurance program that meets the
      standards of CLIA in Subpart P (commencing with Section 493.1701) of
      Title 42 of the Code of Federal Regulations.


    • 1241: This chapter applies to all clinical laboratories in
      California or receiving biological specimens originating in
      California for the purpose of performing a clinical laboratory test
      or examination, and to all persons performing clinical laboratory
      tests or examinations or engaging in clinical laboratory practice in
      California or on biological specimens originating in California,
      except as provided in subdivision (b).
         (b) This chapter shall not apply to any of the following clinical
      laboratories, or to persons performing clinical laboratory tests or
      examinations in any of the following clinical laboratories:
         (1) Those owned and operated by the United States of America, or
      any department, agency, or official thereof acting in his or her
      official capacity to the extent that the Secretary of the federal
      Department of Health and Human Services has modified the application
      of CLIA requirements to those laboratories.
         (2) Public health laboratories, as defined in Section 1206.
         (3) Those that perform clinical laboratory tests or examinations
      for forensic purposes only.
         (4) Those that perform clinical laboratory tests or examinations
      for research and teaching purposes only and do not report or use
      patient-specific results for the diagnosis, prevention, or treatment
      of any disease or impairment of, or for the assessment of the health
      of, an individual.
         (5) Those that perform clinical laboratory tests or examinations
      certified by the National Institutes on Drug Abuse only for those
      certified tests or examinations.  However, all other clinical
      laboratory tests or examinations conducted by the laboratory are
      subject to this chapter.
         (6) Those that register with the State Department of Health
      Services pursuant to subdivision (c) to perform blood glucose testing
      for the purposes of monitoring a minor child diagnosed with diabetes
        if the person performing the test has been entrusted with the care
      and control of the child by the child’s parent or legal guardian and
      provided that all of the following occur:
         (A) The blood glucose monitoring test is performed with a blood
      glucose monitoring instrument that has been approved by the federal
      Food and Drug Administration for sale over the counter to the public
      without a prescription.
         (B) The person has been provided written instructions by the child’
      s health care provider or an agent of the child’s health care
      provider in accordance with the manufacturer’s instructions on the
      proper use of the monitoring instrument and the handling of any
      lancets, test strips, cotton balls, or other items used during the
      process of conducting a blood glucose test.
         (C) The person, receiving written authorization from the minor’s
      parent or legal guardian, complies with written instructions from the
      child’s health care provider, or an agent of the child’s health care
      provider, regarding the performance of the test and the operation of
      the blood glucose monitoring instrument, including how to determine
      if the results are within the normal or therapeutic range for the
      child, and any restriction on activities or diet that may be
         (D) The person complies with specific written instructions from
      the child’s health care provider or an agent of the child’s health
      care provider regarding the identification of symptoms of
      hypoglycemia or hyperglycemia, and actions to be taken when results
      are not within the normal or therapeutic range for the child.  The
      instructions shall also contain the telephone number of the child’s
      health care provider and the telephone number of the child’s parent
      or legal guardian.
         (E) The person records the results of the blood glucose tests and
      provides them to the child’s parent or legal guardian on a daily
         (F) The person complies with universal precautions when performing
      the testing and posts a list of the universal precautions in a
      prominent place within the proximity where the test is conducted.
         (7) Those individuals who perform clinical laboratory tests or
      examinations, approved by the federal Food and Drug Administration
      for  sale to the public without a prescription in the form of an
      over-the-counter test kit, on their own bodies or on their minor
      children or legal wards.
         (8) Those certified emergency medical technicians and licensed
      paramedics providing basic life support services or advanced life
      support services as defined in Section 1797.52 of the Health and
      Safety Code who perform only blood glucose tests that are classified
      as waived clinical laboratory tests under CLIA, if the provider of
      those services obtains a valid certificate of waiver and complies
      with all other requirements for the performance of waived clinical
      laboratory tests under applicable federal regulations.
         (c) Any place where blood glucose testing is performed pursuant to
      paragraph (6) of subdivision (b) shall register by notifying the
      State Department of Health Services in writing no later than 30 days
      after testing has commenced.  Registrants pursuant to this
      subdivision shall not be required to pay any registration or renewal
      fees nor shall they be subject to routine inspection by the State
      Department of Health Services.


    • 1246.5: Notwithstanding any other provision of law, any person may
      request, and any licensed clinical laboratory or public health
      laboratory may perform, the laboratory tests specified in this
      section.  A registered clinical laboratory may perform the laboratory
      tests specified in this section if the test is subject to a
      certificate of waiver under CLIA and the laboratory has registered
      with the department under paragraph (2) of subdivision (a) of Section
      1265. A program for nondiagnostic general health assessment that
      includes a laboratory test specified in this section shall comply
      with the provisions of Section 1244.  The results from any test may
      be provided directly to the person requesting the test if the test is
      on or for his or her own body.  These test results shall be provided
      in a manner that presents clear information and that identifies
      results indicating the need for referral to a physician and surgeon.

         The tests that may be conducted pursuant to this section are:
      pregnancy, glucose level, cholesterol, occult blood, and any other
      test for which there is a test for a particular analyte approved by
      the federal Food and Drug Administration for sale to the public
      without a prescription in the form of an over-the-counter test kit.
      A test approved only as an over-the-counter collection device may not
      be conducted pursuant to this section.


    • 1265(a)(1):A clinical laboratory performing clinical laboratory
      tests or examinations classified as of moderate or of high complexity
      under CLIA shall obtain a clinical laboratory license pursuant to
      this chapter.  The department shall issue a clinical laboratory
      license to any person who has applied for the license on forms
      provided by the department and who is found to be in compliance with
      this chapter and the regulations pertaining thereto.  No clinical
      laboratory license shall be issued by the department unless the
      clinical laboratory and its personnel meet the CLIA requirements for
      laboratories performing tests or examinations classified as of
      moderate or high complexity, or both.


    • 1281:It is unlawful for any person to own, operate, maintain,
      direct, or engage in the business of operating a clinical laboratory,
      as defined in this chapter, unless he or she possesses a valid
      clinical laboratory license issued by the department.  In the event a
      health facility does not perform clinical laboratory services, but
      provides laboratory services to its patients under an agreement with
      another person or entity that holds and is operating under a valid
      clinical laboratory license, the health facility shall not be
      required to obtain a clinical laboratory license.



    • 1287(b)(3):  The enforcement remedies provided under this section are not
      exclusive, and shall not preclude the use of any other criminal or
      civil remedy.  However, an act or omission punishable in different
      ways by this section and any other provision of law shall not be
      punished under more than one provision.  Under those circumstances,
      the penalty to be imposed shall be determined as set forth in Section
      654 of the Penal Code.


    • 1288:Any person conducting or operating a clinical laboratory may
      accept assignments for tests only from and make reports only to
      persons licensed under the provisions of law relating to the healing
      arts or their representatives.  This section does not prohibit the
      acceptance of evaluation specimens for proficiency testing or
      referral of specimens or such assignment from one clinical laboratory
      to another clinical laboratory, either licensed or exempt under this
      chapter, providing the report indicates clearly the laboratory
      performing the test.  A report of results issuing from a clinical
      laboratory shall show clearly the name and address of the laboratory
      and the name of the director.


The letters demand that the party submit a plan before June 23, 2008 advising how the company will prevent further violation of the law.

It is impossible to determine from these letters whether or not these companies actually are in violation of the law;  however, assuming the allegations are in fact accurate, is this really the whole story?  Or is something else actually responsible for this "attack" on genetic testing companies?  What is prompting this interest in genetic testing?

I cannot help but wonder if the medical community is at the heart of this controversy.  But if this is in fact the case, what is the issue?  Is there a concern by doctors that they are going to be found guilty of malpractice simply as a result of something they either overlook or do not know how to respond to in the genetic testing report?  As we suggested in our previous blog posting, there is certainly some debate as to how accurate various genetic tests actually are and what, if anything, should be done in response to certain results.  On the other hand, is there a fear by the medical community that the public will not know how to handle the data in the report?  Or is there at the heart of this issue an entirely different matter entirely?

It is interestng that in the same week that this controversy has erupted, Newsweek ran a story about Dean Ornish’s new book, where he looks at how changing lifestyle can change genes.  The prospect of potentially changing your genetic predisposition by making lifestyle changes is perhaps the best argument for why the public should have direct access to these tests.  Thomas Goetz of also makes a compelling argument for direct access, arguing that "Frankly, it’s insulting and a curtailment of my rights to put a gatekeeper between me and my DNA." 

To date, this controversy has erupted in only two states: New York and California.  There are forty-eight other states yet to take this issue up.  Those states will be looking to New York and California to see how they deal with the controversy.  Perhaps the California legislature should jump to the forefront of this issue and look at changing the law to ensure direct public access to genetic testing.  Such an action would undoubtedly set an important precedent for the other forty-nine states, which might very well follow in California’s footsteps.  California: will you rise to the challenge? 

The California Biotech Law Blog will continue following this controversy as it further unfolds.

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California Takes First Step Towards Regulating Genetic Testing Companies

Written by on Monday, June 16th, 2008

California’s Department of Health has taken a first step towards regulating genetic testing companies by sending out cease and desist letters demanding that they halt sales in state until they comply with quality and reliabilty standards, reported SF Gate

According to SF Gate, thirteen companies received the letters, including the two most visible genetic testing companies, Navigenics INc. and 23andMe Inc.

SF Gate reported:

All the companies have two weeks to demonstrate to regulators that their laboratories are certified by the state and federal governments, said department [of health] spokeswoman Lea Brooks. They must also show that the tests currently being sold to California residents have been ordered by a doctor as required by state law. . . . Companies face fines of up to $3,000 a day if they don’t comply.

The California action follows a similar action taken by the New York Department of Health earlier this year, as we discussed in our May 14th blog posting.

Having just spoken last week at the Beyond Genome Conference in San Francisco, where we were discussing the ins and outs of the recent advances in genetic testing , I was a bit surprised to read that California–given our robust biotech industry–was following in New York’s footsteps on this issue.  Moreover, I was surprised to discover that there is a state law in California requiring that genetic tests be ordered by a physician.

While perhaps it makes some sense to require the laboratories of these companies to be certified by the state and federal governments (although I confess that I do not know what is involved in the certification process), does it really make sense to require that all genetic testing be initiated by a doctor’s order?  Is this really good public policy? 

As I indicated in my prior posting on this issue, I personally would be rather reluctant to pursue genetic testing even if I was interested in the results simply because I would not want the results to get into the hands of the insurance companies.  Requiring that no testing can be pursued without a doctor’s order makes it virtually impossible to run the tests without the insurance companies obtaining copies of the results.  According to Ryan Phelan, the CEO and Founder of DNA Direct, who also spoke at the Beyond Genome Conference last week, genetic test results are not even considered uniformly reliable across the board; some tests are viewed as being more reliable than others.  Would this be understood, however, by the insurance companies evaluating the results?  I personally would not be willing to take that risk.  Then again, as I have shared with blog readers previously, I have had first-hand experience with the challenges that can be encountered with obtaining health insurance even when young and in relatively good health, as my COBRA insurance was terminated six months after my previous employer closed its doors and I was forced to go out and look for insurance on the open market before I had "exhausted" my COBRA under state law.  Based on my experience, it is not inconceivable to think that an insurer would label you "uninsurable" solely on the basis of your genetic testing results. 

In evaluating the debate over genetic testing, I cannot help but  wonder what is at the crux of the fears over confidential genetic testing.   Is the medical community concerned that a public that already has access to HIV and pregnancy testing over-the-counter somehow cannot handle genetic testing results?  Is there a concern about protecting the public from reliability issues arising from some of the genetic tests?  Is there a worry about what the public will do with the information, or what the public will expect physicians to do with the information? Or is something else entirely at the heart of these concerns?

I’m interested to hear any commentary on the genetic testing debate: should there be laws in place to require physicians to be involved with genetic testing, or to order the tests?  Would you be deterred from pursuing testing because of a physician’s involvement?  Do the laws need to be changed so that states cannot in essence "shut down" genetic testing start-ups that are emerging in the marketplace? 

The California Biotech Law Blog will continue to follow this issue as it unfolds, and we will keep you posted on any feedback we receive on the issue.

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Outlook for Biotech Industry Mixed in 2008

Written by on Saturday, May 24th, 2008

The biotech industry may run into problems in 2008, despite having a banner year in 2007, according to a report by SF Gate.

The SF Gate reported:

[B]iotech companies may face some rough weather ahead, said Scott Morrison, Ernst & Young’s U.S. life sciences director. New product approvals will slow as drug regulators scrutinize applications in the post-Vioxx era, Morrison said.

Drug prices may face more pressure in a political environment focused on health care reform and the federal budget deficit. Beyond that, constriction in the larger capital markets has finally started to affect biotech companies this year, he said.

"Biotech has not been immune from the ills of the subprime mortgage meltdown," Morrison said. "Total fundraising year to date in 2008 is down by 60 percent."

Yet, according to a recent Ernst & Young report, biotech had a record year in 2007.  The Jacksonville Business Journal wrote of fthe findings from this report as follows:

European and American companies raised nearly $30 billion in overall financing in 2007, a banner year only surpassed by 2000.

Global venture financing reached a new high in 2007, surpassing $7.5 billion, of which $5.5 billion helped seed or nurture companies in the United States.

Global biotechnology net losses were at $2.7 billion as of 2007, down from $7.4 billion in 2006.

Ernst & Young has also concluded that the U.S. biotechnology sector is almost profitable for the first time. 

 As a result of a good 2007, the tight economy is not expected to hit the biotech industry as hard as is expected in other industries.  According to SF Gate, the Ernst & Young report indicated that nearly half of the 386 publicly traded U.S. biotechnology companies have more than two years of cash on hand, and another 27 percent have more than five years of cash. In addition, venture capitalists remain interested in biotech–more so than in other industries.

All in all, the SF Gate article suggests that the outlook is mixed for the biotech industry in 2008; however, I think that those of us working in the industry would agree that we are not overly worried about the industry’s future.  I think that it is safe to say that the future remains very bright for biotechnology.

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China Set to Compete in Generics Market

Written by on Tuesday, May 13th, 2008

China is in the process of positioning itself to compete in the major world generics markets, according to a report by Reuters.  The Chinese move is expected to drive down generics prices below current market rates.

 Reuters reported on the Chinese strategy as follows:

Pharmaceutical information group IMS Health Inc said last year’s first okay from the U.S. Food and Drug Administration for a Chinese generic — a copy of AIDS drug nevirapine — was a sign of things to come. . . .

Zhejiang Huahai Pharmaceutical Co Ltd won a U.S. green light last July to sell generic nevirapine, once the patent held by Germany’s Boehringer Ingelheim expires in 2012.At least 10 other Chinese companies are set to follow suit with other generic products, according to IMS. Some could be available as early as this year. The result will be increased competition in a generic drugs industry that is already struggling with tumbling prices.

"In order to ensure their success in the market, the Chinese manufacturers are likely to undercut all others on price," IMS said in its annual Intelligence.360 report.

According to Reuters, the one potential roadblock that Chinese companies are likely to encounter is the fact that they do not have a good reputation for quality, particularly in light of the recent heparin scandal.  This may give Indian companies, which are also trying to enter the generics market, a competitive advantage.

As a consumer, I welcome the additional competition, which will ultimately result in lower prices at the drugstore.  With all the recent Chinese safety scandals, however, I cannot help but wonder if the increased presence of Chinese generics companies in the marketplace is going to end up generating even more safety problems for American consumers–and perhaps even more legal problems as well.  Hopefully the FDA is following what is happening in China and responds accordingly to better ensure that U.S. consumers are not purchasing unsafe Chinese products.

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Presidential Politics: More on the McCain Healthcare Reform Plan

Written by on Thursday, May 1st, 2008

McCain set out more details this week on his healthcare reform plan; while the plan contains some new features, it falls short of providing any comprehensive plan that would really resolve the country’s healthcare woes.

Marketwatch reported on McCain’s plan as follows:

McCain espouses some ideas that have broad bipartisan appeal: the use of generic drugs; incentive pay for doctors and hospitals that achieve good health results; and electronic medical records to reduce wasteful spending. But several of his proposals, such as changes in the tax treatment of employer-sponsored coverage, raise more questions than he seems prepared to answer. . . .

Tax credits that encourage the purchase of individual health insurance form the centerpiece of McCain’s health plan, and would be a dramatic departure from the way health insurance is distributed today. . . . McCain proposes to give refundable tax credits of $2,500 for individuals and $5,000 for families to offset the cost of coverage in exchange for eliminating tax breaks that employees and employers currently have. If you get your coverage through a job, gone would be the tax exclusion that allows your premium dollars to come out of your pretax pay. He argues that would level the playing field for people who don’t get their insurance through work while preserving choice — you could take that money and keep your employer plan or use it to buy one on the individual market. . . .McCain also wants to allow people to buy health insurance across state lines. . . .

[H]e wants to create a Guaranteed Access Plan “that would reflect the best experience of the states” and function as a health insurer of last resort, kind of like the high-risk pools 30 states have set up.

While some of McCain’s plans make sense such as the idea of being able to carry insurance across borders and having a Guaranteed Access Plan, his focus on encouraging individual plans fails to address the issue of how people with minor health problems will get coverage as individuals.  The reality is that many Americans would have no other option but to go with the Guaranteed Access Plan: how exactly would the U.S. fund such a plan?  Obviously, if businesses no longer receive tax benefits for the payment of premiums, it will become increasingly difficult for such business to justify offering their employees such benefits.

Another problem: how would insurance across state lines be regulated?  I am completely in favor of the idea, as I had terrific insurance when I lived out of state and was sorry to lose it when I moved to California; however, in a multi-state model, it seems likely that a new federal entity will be needed to provide oversight over the regulation of insurance in all of the states.

All in all, while Americans should be happy to see that McCain has a health care reform plan, they may be disappointed to see that his plan has no groundbreaking solutions–certainly none that will resolve the current system’s problems.  Is this really a surprise though?  Unfortunately,  we remain a long way from electing anyone who can really  resolve all of health care’s problems.

Attached is a copy of McCain’s speech on healthcare in full.

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San Diego Consortium for Regenerative Medicine to Build $115 Million Stem Cell Research Facility in San Diego

Written by on Tuesday, April 22nd, 2008

The San Diego Consortium for Regenerative Medicine has announced its plans to build a $115 million stem cell research facility in San Diego, according to the Associated Press

The Associated Press reported as follows:

The facility would be located on more than 7 acres owned by the University of California at San Diego in the Torrey Pines area biotechnology cluster. . . . The state is expected to provide a large portion of the facility’s funding. Californians in 2004 approved a measure creating a $3 billion stem cell research agency.

A panel for the state agency has determined the San Diego consortium is eligible for $43 million. A condition to receive the state funds is that the building be completed by 2010.

Consortium officials estimate they would need to raise at least an additional $72 million to complete the center’s funding. They said an out-of-state donor whom they decline to name has agreed to contribute $30 million.

It will be interesting to see how the plans for this new center compare to the California Institute of Regenerative Medicine ("CIRM") facility.  We will keep you posted. 

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