The House and Senate have reached a compromise to extend SBIR through July 31, 2009, according to a report that broke late this evening by the SBIR Insider.

The SBIR Insider reports that the House will originate the bill and that the legislation will amend PL 110-235 (the current CR), which expires on March 20, 2009.

The compromise was announced on the same day that President Obama announced his new plan to assist small businesses.  The President’s plan is intended to unfreeze the credit markets for small businesses by providing additional liquidity and guarantees of small business loans, and to also reduce lending fees and provide tax breaks for small businesses.

As the California Biotech Law Blog previously reported, support for SBIR reauthorization has been waning in Congress and there were genuine concerns that Congress would let the SBIR expire without taking action to save it before the March 20th deadline.  Apparently there was a last minute change of heart, however, with the President’s announcement today of his plans to help small businesses.

Of course, this bill has not yet been signed, so it is not yet a done deal.  The California Biotech Law Blog will keep you posted as any news breaks on this effort.

The status of SBIR reauthorization is unclear, according to an update by Rick Shindell of the SBIR Insider..

In his October 3rd newsletter, Rick Shindell had pronounced SBIR reauthorization dead.  Shindell wrote in his email update the following:

Over the last month and through today, October 3, 2008, there has been a flurry of intense efforts in the Senate to get an SBIR Reauthorization bill passed. . . .  Unfortunately the valiant efforts on SBIR reauthorization by the leaders and staff of the Senate Committee on Small Business and Entrepreneurship (SBE), John Kerry (D-MA) chair and Olympia Snowe (R-ME), were rebuffed by a few and ultimately could not be brought to the full Senate for a vote, in spite of the fact that the original bill S.3362 was passed unanimously 19-0 in the SBE committee back in July. . . .

In today’s update, however, Shindell appears to have changed his opinion somewhat, stating:

In our October 3rd issue we announced that SBIR reauthorization was dead in the 110th Congress. Although this scenario is still likely, the events of the last few weeks heighten the chances for more action in a “lame-duck” Congress which “may” present an opportunity for additional SBIR reauthorization activity.

So, the question is this: will the current economic climate push the Senate to move forward on this reauthorization effort?

In all honesty, I doubt it.  I have a bit of a bias when it comes to the subject of the SBA, since I started my law firm in a down economy following the sudden closing of my large law firm, and I found it disappointingly difficult to obtain funding through the SBA.  At one bank, I asked about SBA funding, and to my surprise, I was asked what my spouse’s salary was.  When I replied in some shock that I was single, I was told the bank could not assist me.  At another bank, I received the run-around on SBA funding on the basis that law was a “highly risky profession” and I wouldn’t be able to do anything other than practice law if my business failed.   Of all the businesses I could have started, I honestly would never have thought that a law practice would have been placed in a high risk category–particularly when I had already practiced law for a number of years.   Wnile I did eventually obtain a small SBA loan, I never obtained the loan I really needed to build my business. I must admit I became somewhat disenchanted with the whole concept of the SBA.  In my opinion, the whole program would benefit from an overhaul.

So, having disclosed my personal bias on the SBA program, I would argue that the SBA program is exactly where Congress should be focusing its attention in a down economy.

Why do I say this?

Well, in a down economy, there are generally a number of layoffs, and a number of laid off employees will not be able to find the right job.   Rather than sitting home, collecting unemployment, and potentially losing their home to foreclosure, many of the unemployed will contemplate starting a small business.  As anyone who has ever started a small business can tell you, securing adequate financing is often critical to the success of a small business.  So, in my opinion, it makes perfect sense for Congress to focus its efforts on improving the SBA program in a down economy, if it is serious about taking steps to invigorate the economy.

So, how does this relate to SBIR reauthorization?  Well, I would argue that Congress should ensure that the SBIR gets reauthorized for the very same reason–to promote small business and invigorate the economy.

Unfortunately, however, to date I have heard absolutely nothing of any plans by Congress to focus on the SBA as part of its economic relief efforts.  Instead, Congress and the administration are busy taking all kinds of economic steps that have little or nothing to do with small business.  For this reason, I doubt that SBIR reauthorization is going to get much attention by the Senate before the end of the year either.

The California Biotech Law Blog will continue to keep you posted as any new SBIR reauthorization developments occur.

The Senate has unanimously passed the Genetic Information Non-Discrimination Act, which would prohibit genetic discrimination in employment and health insurance coverage decisions, reported the Associated Press.

The Associated Press reported:

The bill, described by Sen. Edward Kennedy as "the first major new civil rights bill of the new century," would bar health insurance companies from using genetic information to set premiums or determine enrollment eligibility. Similarly, employers could not use genetic information in hiring, firing or promotion decisions.

This is not the first time that the Senate has passed genetic non-discrimination legislation: bills were passed unanimously by the Senate in 2003 and 2005, but the House did not act to pass the bills at that time.  The House, however, passed a version of the bill last year. 

The Associated Press reported:

Senate action on [the] legislation has been slowed by Sen. Tom Coburn, R-Okla., who joined some business groups in warning that the bill could encourage a flood of lawsuits.

A compromise worked out earlier this week tightens language to ensure there is a "firewall" between the part dealing with health plans and the section regarding employment, so as to discourage inappropriate claims.

It also makes clear that, while individuals are protected from discrimination based on genetic predisposition, insurance companies still have the right to base coverage and pricing on the actual presence of a disease.

The California Biotech Law Blog will continue to follow this legislation as it is considered by the House.   

The SBIR/STTR Reauthorization Act, H.R. 5819, has passed in the House and is now headed to the Senate; the biotech industry will be pleased to hear that the House has given them exactly what they asked for in this bill, according to Rick Shindell of the SBIR Gateway.

The SBIR Gateway reported on the House’s action as follows:

The voting on the amendments was a virtual "lovefest" with the results known ahead of time. There was absolutely no opposition on any amendments that were allowed to be offered. BIO’s VCs got everything they wanted and more with Sam Graves’ amendment to strike Title II (Venture Capital Investment Standards). Two important amendments were withdrawn (because they stood no chance of passage) and a few simply weren’t allowed to be accepted by the rules committee. . . .

Many SBIR advocates believe this is a bad bill that will be severely leveraged by the BIO/VC community. However, some other credible sources who deal in the DoD world think I may be presenting too severe of a worst case scenario.

SBIR Gateway reports that the highlights of the new bill include as follows:

• The set aside remains at 2.5% SBIR and .3% STTR
• 3% of the 2.5% will come off the top for agency administrative funds
• Phase I Awards $300k Phase II Awards $2.2m
• Agencies have the flexibility to award more $$ and consecutive phase IIs as they see fit
• Ability to apply for a phase II award without having received a phase I award
• Shortening of the time to receive the award
• More frequent solicitations and topics (at agency discretion)
• Notification of the right of a debrief
• Establishment of an SBIR advisory board
• Ability to crossover between SBIR and STTR
• Increase in commercialization assistance funding
• New FAST program funded at $10m

In addition, SBIR Gateway reports that the bill will include the following preferences and priorities:

• Areas that have lost major source of employment
• Preference to organizations making significant contributions towards energy efficiency
• Priority to veteran companies
• Special consideration to pressing transportation and infrastructure research activities
• Special consideration for energy related research topics
• Special consideration for rare-disease-related research topics
• Priority to rural areas
• Preference in FAST awards for SBDC applicants that are accredited for technology services  

Thus, it appears that the first round in this reauthorization battle goes to the biotech community.   We will keep you posted as to how the reauthorization battle unfolds in the Senate.

Bioworld Today is reporting that the FDA and Congress will be joining forces to develop follow-on biologics legislation.

According to Bioworld Today, the Bush Administration indicated in the 2009 federal budget package released last week that “it would seek regulatory authority for the FDA to approve follow-on biologics, also called biosimilars or biogenerics, which would be financed through user fees. Currently, no such approval pathway exists for follow-on biologics.” Both the House and Senate had introduced follow-on biologics legislation last year, and planned to move the legislation forward in 2008.

What is the FDA’s current vision for the legislation?

Bioworld Today reported:

In a document titled “Other Legislative Items” that is part of the White House fiscal year 2009 budget, the administration said the follow-on biologic legislative proposal would include a “predictable and public guidance process for licensing follow-on protein products” under the Public Health Service Act.

“The proposal will prescribe the type of data required for FDA to review applications for follow-on protein products and will require labeling for the safety concerns related to the interchangeability of these products,” the Bush administration said.

The proposal also will include “adequate intellectual property protections to preserve continued robust research into new and innovative life-saving medications,” the document stated.

The news was viewed as a promising development  by both Sen. Charles Shumer (D-N.Y.) and Department of Health and Human Services Secretary Michael O. Leavitt, both of which were interviewed by Bioworld Today.  Similarly, Jim Greenwood, CEO of the BIO industry organization indicated his support for the FDA approach, as well as Kathleen Jaeger, CEO of the Generic Pharmaceutical Association (GPhA), who also expressed her approval for the development.  Having said this, the Bio Job Blog took issue with the FDA’s decision, stating:

I don’t think that Congress’s involvement is a good idea given the political wrangling, deal-making and concessions that must be made in order to get legislation passed.

Is the Bio Job Blog right to express concern about how this new joint effort will pan out?

Well, there is no doubt that the legislative process is time-consuming and is inevitably intertwined with politics and political compromises.  However, it is also true that a collaborative effort can greatly speed up the process, and having the administration on board means that any agreed-upon legislation is unlikely to end up with the words “vetoed” stamped on its front.  I would have to say that on the whole the development is a positive one, and suggests that we are one step closer to voting into law follow-on biologics legislation, which even Bio Job Blog concedes is likely, stating:

It looks as though follow-on biologics may become a reality in the US. . .  . I don’t think Americans will see follow-on biologics on the market before 2010 or 2011. That said, it gives us Americans something to look forward to!