Baybionotes provided a short update this month regarding the implementation of recent legislation expanding the obligations of clinical trial sponsors to submit information regarding their trials to the federal data bank. 

Author Robert Church of Hogan & Hartson LLP discussed the legislation as follows:

Title VIII of the Food and Drug Administration Amendments Act of 2007 expands the federal registry in several important ways. First, it is no longer limited to trials of drugs intended to treat serious or life-threatening diseases, but rather requires registration of all clinical trials other than Phase I and requires significantly more content. As of December 26, new data points for initial registration became required, even reaching back to include some clinical investigations that began before the law was passed.

The NIH has also been directed to expand ClinicalTrials.gov to include trial results. By this fall, sponsors will have to submit results information about approved products. Soon thereafter, adverse event data will be required on the site as well. Still more, the law requires the promulgation of regulations by September 2010, further expanding the results database “to provide more complete results information and to enhance patient access to and understanding of the results of clinical trials.”

What are the penalties for failure to comply with the new legislation?  According to Church, the penalities are as follows:

Not only will failure to submit the required information in a timely fashion be posted on ClinicalTrials.gov, but sponsors may also face civil fines up to $10,000 for all violations adjudicated in a single proceeding. If noncompliance continues thirty days after notice, the fine may be increased $10,000 each day until the matter is resolved.

According to a Patent Baristas report, the U.S. Patent and Trademark Offics ("USPTO") is proposing a rule change to require deposits when the invention involves biological material. 

Patent Baristas wrote of the proposed rule change:

The proposed rules would require:

(1) that any deposit of biological material be made before publication of a patent application; and

(2) that all restrictions on access to the deposited material imposed by the depositor be removed upon publication.

The proposed changes will provide that the public has access to biological materials referenced in the disclosure of a patent application to the same extent that access to the remainder of the disclosure is available. The public policy basis for allowing access to a referenced item is the same whether the item is another patent application or a deposited biological material.

The USPTO is currently accepting written comments to this proposed rule change through April 21, 2008.  The full text of the notice is attached.

With all the talk by the candidates of reforming healthcare this political season, it is interesting to consider the impact that a win by each candidate will have on the biotech industry.  As this race unfolds, the California Biotech Law Blog intends to follow the positions of the candidates that may have an impact on the industry. 

Robert Goldberg wrote an interesting column this week for Drugwonks and The Weekly Standard  looking at the John McCain healthcare plan, which has received little if any attention by the media.  Goldberg first addresses the plans proposed by the Democratic presidential candidates.   In contrast to McCain, who views the current Veteran’s Health Administration ("VA") as being severely broken, Goldberg explains that Barack Obama and Hillary Clinton view the VA is the "starting point for the Democratic plans for universal health care."

Goldberg writes:

Both Hillary Clinton and Barack Obama want to expand the VA’s electronic health care system to the rest of the country. Obama has promised to spend $50 billion on electronic health records based on the VA model. And Clinton likes to claim credit for that model, which she calls an astounding success. . . .

In fact, as a government audit discovered, the VA’s paperless system has created a huge bottleneck, losing track of 53,000 veterans.. . . according to internal VA audits, 25 percent of all vets wait more than 30 days for their first exam. Of the veterans kept waiting, 27 percent had serious service-connected disabilities, including amputations and chronic problems such as frequent panic attacks. Iraq war vets often have to wait six months for their first appointment. In some VA hospitals, vets wait 18 months for surgeries–a record worse than Canada’s or England’s national health care systems. The VA’s budget for its health care system has doubled since 2001. . . .

In contrast, Goldberg says that the McCain plan "boil[s] down to freedom of choice," explaining as follows:

McCain’s plan is based around patient-centered initiatives that already have broad support among Republicans in Congress. They include letting people buy health insurance nationally instead of only from state-regulated firms; giving people the choice of purchasing coverage through cooperatives or other organizations (churches or civic groups, for example); expanding health savings accounts; and making health insurance portable by giving people tax credits of up to $5,000 per family to buy their own coverage instead of getting it through an employer.

His chief concern is for people to take ownership of their health care. McCain likes to note that "Ronald Reagan said nobody ever washed a rental car. And that’s true in health insurance. If they’re responsible for it, then they will take more care of it." At the heart of McCain’s proposals is his effort to allow veterans, particularly soldiers returning from Iraq with traumatic brain injury and mental illness, to get care anywhere rather than just through the Veterans Health Administration (VA). . . .

It is likely that the McCain’s plan will receive additional scrutiny down the road, as healthcare is likely to continue to play a key role in the election.  However, Goldberg gives us a first glimpse of the McCain position on healthcare reform.  There is little doubt that the candidates have a very different perspective on what that reform might look like. 

But how might the McCain view affect the biotech industry?  Well, all in all, I would argue that the biotech industry would most benefit from the McCain position, since ownership of health care would likely lead patients to pursue the best available treatments, to the extent that they can afford them.  In contrast, the Obama and Clinton positions would increase health care availability for the population as a whole, but would likely limit options and treatment availability and potentially even limit the profitability of the biotech industry as a whole.

The California Biotech Law Blog will continue to look at these issues as further information about the candidates’ positions is revealed.   We welcome comments on these issues from our readers.  What do you think: how would the candidates’ positions on healthcare reform likely affect the biotech industry as a whole?

A new bill introduced this week would reduce the compliance burdens faced by biotech companies under Sarbanes-Oxley.

IndustryWeek reported on the bill as follows:

A provision in the HOME Act directs the Securities and Exchange Commission to provide a threshold definition for smaller public companies thereby providing an objective standard as to who is eligible for a scaled audit under the newly adopted Auditing Standard No. 5 (AS-5) and Section 404 of the Sarbanes-Oxley Act of 2003. . . .

The bill enables companies without federal tax liability to increase their capital investments by claiming some portion of their unused R&D and Alternative Minimum Tax (AMT) credits. Under this provision, companies would elect to accelerate R&D and AMT credits in lieu of bonus depreciation. Allowing companies to accelerate the recovery of some portion of unused R&D and AMT credits through new capital investments will help maintain economic growth by encouraging business investments and job creation. The bill also provides for a two-year R&D tax credit extension which expired at the end of 2007

The Biotechnology Industry Organization ("BIO") issued a press release praising the bill, in which BIO President and CEO Jim Greenwood stated as follows:

"Biotechnology researchers are creating innovative technologies that provide hope to patients worldwide.  But most biotech companies are small start-ups, years away from having products on the market.  So with little to no product revenue, and an undefined definition of a smaller public company, these companies have been absorbing outsized audit and compliance costs – revenue that could otherwise go to developing life-saving therapies."

To check out the full text of the BIO press release, click here.