Washington Report - Aug. 2, 2011, Vol. 7 No. 12

Debt Deal on the Horizon

After a month of brinksmanship, the House of Representatives on Monday passed a compromise to raise the debt ceiling and sharply cut spending. The measure was supported by a solid majority of the Republicans, and about half of the Democrats, but few in either party were pleased with the final package. The Senate is expected to pass the House bill Tuesday. The tentative agreement includes what the Congressional Budget Office estimates is some $2.1 trillion in spending cuts over 10 years. It also establishes a new congressional committee to recommend a deficit-reduction proposal before December 2011, and a two-step increase in the debt ceiling. If the deficit-reduction committee fails, the enforcement mechanism in the bill will trigger spending reductions beginning in 2013, which will be split evenly between domestic and defense spending; however, protections are in place for Social Security, Medicare beneficiaries and low-income programs. According to preliminary summaries, cuts to Medicare would be capped and limited to the provider side. Medicaid and Social Security are exempt.

Bipartisan Life Sciences R&D Bill Introduced

On July 25, Reps. Devin Nunes (R-Tulare), Allyson Schwartz (D-PA), Pat Meehan (R-PA), William Pascrell (D-NJ), Jim Gerlach (R-PA), Jason Altmire (D-PA), Charlie Dent (R-PA), and Chaka Fattah (D-PA) introduced H.R. 2632, the Life Sciences Jobs and Investment Act. The bill aims to promote investment in the life sciences sector by offering directed and temporary tax relief for businesses prepared to grow and expand their U.S. workforce. Specifically, the bill encourages private sector hiring and investment by doubling the existing life sciences R&D tax credit from 20 percent to 40 percent of the first $150 million firms spend on qualifying life sciences R&D. Further, the bill would also provide incentives to hire additional scientists or researchers, or contract with other qualified organizations, like research universities, to conduct qualified life sciences research. A companion bill was introduced in the Senate by Robert Casey (D-PA).

California is home to more than 2,000 innovative biomedical companies responsible for treatments, therapies and diagnostics that are improving and extending the lives of millions in the United States and around the world. This sector is also a key component of our state economy, employing 268,000 people and accounting for more than $114 billion in annual revenues, $15.4 billion in exports and $19.4 billion in wages and salaries. CHI believes that these targeted tax incentives will aid the private sector in California and throughout the nation in capitalizing on our position as a leader in life sciences innovation.

Energy and Commerce Reauthorizes Countermeasures Programs

On July 28, the House Energy and Commerce Committee approved legislation, H.R. 2405, the Pandemic and All-Hazards Preparedness (PAHPA) Reauthorization Act of 2011, authored by Rep. Mike Rogers (R-MI). The bill, which reauthorizes the Department of Health and Human Services' countermeasures programs, is now clear to be considered by the full House of Representatives. California's biopharmaceutical, medical device and diagnostics firms, as well as its research universities, are engaged in a range of activities made possible by Project BioShield and the Special Reserve Fund.

The reauthorization and continued funding of these components is critical as the government is the sole purchaser for many of these essential, yet difficult to develop, medical countermeasures (MCMs). Among other successes, the R&D and procurement funding provided by these programs has facilitated the development of a next-generation smallpox vaccine and therapies for anti-bacterial resistant pathogens, as well as testing of a botulism anti-toxin. Further, CHI is also pleased about the PAHPA Reauthorization's new provisions that would bring the U.S. Food and Drug Administration (FDA) into a closer working relationship with the firms in this space to overcome the unique difficulties posed by these products. Specifically, the bill calls for the FDA to develop regulatory management plans, provide technical assistance, and adhere to specific timelines, providing MCM sponsors with a more transparent, proactive and consistent path to licensure. These reauthorizations and new provisions will help accelerate MCM development and approval, improving the nation's preparedness against both public health crisis and intentional attack. CHI looks forward to working with Rep. Rogers and others on this critical matter. For more information, contact Todd Gillenwater, CHI senior vice president of public policy (Gillenwater@chi.org or 202-974-6313).

Hearings and Briefings

ITIF Holds Discussion on U.S. and EU Competitiveness and Innovation

On July 19, CHI attended an Information Technology & Innovation Foundation (ITIF) event in Washington, D.C., co-hosted by the European-American Business Council. The purpose of the event was to unveil ITIF's second Atlantic Century Report: 'The Atlantic Century II.' A follow-up to the 2009 original, the report is an assessment of the global innovative-based competitiveness of 44 nations and several regional groupings as measured by 16 indicators. In both reports, the U.S. ranked fourth overall, yet finished last in 2009 and second to last in 2011 in terms of improvement in international competitiveness and innovation capacity over the last decade. Interestingly, the report also compared select U.S. states to the rest of the world (although only seven of the 16 indicators were available for comparison). In this analysis, seven individual states, including California (2nd), performed better than the best nation - Finland. Panelists agreed that while short-term concerns about the debt ceiling are warranted, the only way to keep from repeating the current cycle is to grow our way out of trouble; and, in an age where easy gains have been exhausted, the solution must be innovation-driven increases in growth and productivity. Click here for more about the ITIF and the event.

Congressional Hearings Focus on FDA

On July 20, CHI attended the Energy and Commerce Oversight and Investigations subcommittee hearing, 'FDA Medical Device Regulation: Impact on American Patients, Innovation and Jobs.' The hearing's first panel was comprised of patient advocates, inventors and experts who provided perspectives on the FDA's recent policies and performance regarding device approval. Advocates of treatments for migraine headaches, spinal degeneration, and type 1 diabetes shared their frustrations over the lack of FDA approval for products or procedures currently available in Europe. Experts similarly provided frustrated views about the recent performance of the FDA, as echoed in CHI's 'Competitiveness and Regulation: The FDA and the Future of America's Biomedical Industry' report, and the impact it has on inventors, product developers and physician end-users. The day's second panel featured Dr. Jeffrey Shuren, director of the FDA Center on Devices and Radiological Health. Shuren testified about efforts underway at CDRH to improve device approval, and answered questions about the center's performance during his recent tenure.

On July 28, CHI attended a Senate Health, Education, Labor and Pensions (HELP) Committee hearing on FDA user fees. The hearing's sole witness was Dr. Margaret Hamburg, the FDA commissioner. The topics of the hearing included issues related to user fees for both medical device and pharmaceutical products. Committee members expressed concerns about recent increases in approval times, specifically for medical device products, and several cited the 2011 CHI and Boston Consulting Group 'Competitiveness and Regulation' report. While Hamburg refuted some characterizations of FDA performance and presented data showing improvement, she did acknowledge FDA performance failures and included a self-review of the agency in her written testimony to the committee. This document, as well as her oral testimony, detailed improvements under way at the agency from improved training and regulatory science, to better communication pathways and partnership with industry to reduce total time to market. Other topics included a desire to reform advisory committee conflict-of-interest rules established under PDUFA V, and discussion about the IOM report, which was released last Friday. Click here for more information on the hearing or to listen to Commissioner Hamburg's testimony.

IOM Report Recommends Scrapping the Device 510(k) Process

On July 29, the Institute of Medicine (IOM) released its long-awaited study of the 510(k) approval system for medical devices, the process by which most new products are regulated. Industry observers and, indeed, the FDA itself (which had commissioned the study) were shocked by the IOM panel's findings. 'Based on a recent analysis of the FDA's performance in reviewing medical devices, CHI strongly supports improvements in the Agency's regulatory process to make it more efficient, more predictable and more supportive of innovation,' said CHI President and CEO David L. Gollaher, Ph.D. 'Unfortunately, the IOM report recommends that the FDA scrap the 510(k) process under which most medical devices are approved and design an entirely new regulatory framework. Even more disconcerting, the report concludes that 'current information is not adequate to design a new framework.' Rather than start from scratch, CHI supports a thoughtful approach to improving the 510(k) process to improve clarity, consistency and predictability in the device review process. The FDA also acknowledges there is room for improvement, and has taken steps toward enhancing reviewer training and leveraging outside experts in the scientific community. The FDA's already announced action plan, if properly executed, could address many of these issues.'

Click here to read the IOM report.

Click here to read the CHI press release.

Institute for Policy Innovation Hosts Mobile Health Briefing

On July 26, CHI attended 'Mobile Health: Innovations in Health and the Spectrum Challenge' in Washington, D.C. Dr. Michael Burgess (R-TX) gave the keynote address. Additional panelists included:

• Anand Iyer, Ph.D., WellDoc Communications, Inc.
• Richard Katz, M.D., George Washington University Hospital
• Eleanor Chye, AT&T Mobility Product, mHealth and Pharma
• John Walls, CTIA-The Wireless Association

Panelists discussed the utilization of tools across socioeconomic lines and how simple technologies like cellular phones can be incorporated into the solution for improving healthcare. They also discussed how so many of the world's conditions require consistent management, with which these technologies can help. Further, Dr. Richard Katz, a cardiologist from the George Washington University Hospital, discussed how iPhones and tablets have enabled doctors to better serve their patients. For example, doctors can read tests such as echocardiograms and trigger medication reminders to patients who are on strict treatment regimens. IPhones have also allowed for electronic medical records access and to cross-check medications and allergies.

Click here for more information about the Institute for Policy Innovation.

Politico Hosts Event Highlighting Next Steps for Job Creation

On July 26, CHI attended a Politico event sponsored by Intel Corp. called, 'Jobs of the Future.' The event was comprised of three panels featuring:

• Don Graves, executive director, Obama's Council on Jobs and Competitiveness
• Sen. Bob Casey (D-PA), chairman, Joint Economic Committee
• Sen. Jeanne Shaheen (D-NH), member, Committee on Small Business and Entrepreneurship
• Rep. Kevin Brady (R-Texas), vice chairman, Joint Economic Committee
• Rep. Mick Mulvaney (R-SC), member, Joint Economic Committee
• Jared Bernstein, former chief economist for Vice President Joe Biden
• Glenn Hubbard, Columbia Business School, former chairman, Council of Economic Advisers

Panelists discussed and debated competing debt ceiling proposals, tax reform measures, and economic policies to spur job growth. Of particular interest, members were asked what measures they would enact immediately to have job-creating effects. Sen. Bob Casey (D-PA) answered, 'The first thing is to make the R&D tax credit permanent.' He then mentioned that both he and Rep. Kevin Brady (R-TX) had jointly called for a credit specifically for the life sciences, admitting that it was only one specific area, but adding, 'If there's one thing we're dominant in, it's the life sciences and we ought to incentivize that.' Rep. Brady called for a tax holiday to repatriate capital trapped abroad due to U.S. corporations' unwillingness to pay U.S. domestic corporate tax rates. Sen. Jeanne Shaheen (D-NH) called for the establishment of an infrastructure bank, while Rep. Mick Mulvaney (R-SC) stressed the importance of passing a balanced budget amendment to the U.S. Constitution. When polled, all four members agreed that the corporate tax rate should be lowered, with the caveat from Sen. Shaheen that it be accomplished in a manner that is fair and does not benefit specific large corporations to the detriment of small and medium-sized businesses.

Education Secretary Appears Before Senate Appropriations Committee

On July 27, CHI attended a Senate Appropriations Labor-HHS Subcommittee Hearing on the Department of Education's FY 2012 budget. The Secretary of Education, Arne Duncan, was the sole witness. STem education and funding for the Pell Grant program were themes of discussion throughout the session. The secretary stressed the importance of continuing to fund education and teacher training programs to preserve the future of the nation, which includes having a workforce prepared to fill the high-wage, high-skill jobs of the future. Chairman Tom Harkin (D-IA), and Sens. Richard Shelby (R-AL), Mary Landrieu (D-LA) and Mark Pryor (D-AR) all made a point to emphasize the importance of exposing students to STem subjects early on in their education. But they also expressed concerns on how to make sure it remains a priority in the budget and that it continues to be properly funded during such difficult times. For more information on the hearing, please visit the Senate Appropriations Committee website.

Events

SPONSORSHIPS AVAILABLE: California Healthcare Policy Forum, San Francisco, Nov. 3 
New sponsorship opportunities are being offered for CHI's annual California Healthcare Policy Forum taking place in San Francisco at the Julia Morgan Ballroom on Nov. 3. The Healthcare Policy Forum is an annual statewide conference focused on the relationship between biomedical innovation and public policy. This year's theme is Shifting Sands: Forces Reshaping the Biomedical Innovation Business Model and will bring together hundreds of leading executives from biotechnology, medical device and pharmaceutical companies as well as leaders from the state's academic research community with policy makers to discuss critical issues and opportunities facing the biomedical community.

CHI is offering new opportunities to get involved in this dynamic event. Besides the traditional platinum, gold and silver-level sponsorships, there is also an exclusive Board of Directors dinner sponsorship opportunity, and the ability to sponsor a certain portion of the day, like coffee and networking breaks, the media or speaker room and the CEO photo booth, where we will be recording key opinion leader thoughts on the trends affecting industry growth and competitiveness in California.

For more information or to sponsor, contact Molly Ingraham, CHI vice president-business development (858-456-8884 or Ingraham@chi.org ).

SAVE THE DATE: CHI's Annual End-of-Session Reception, Dec. 8 
Join CHI-California Healthcare Institute, legislators, staff and biomedical industry leaders for the annual end-of-year reception at Sonoma Restaurant in Washington D.C. the evening of Thursday, Dec. 8. Sonoma Restaurant will be the venue for cocktails and conversation between public policy makers and California's biomedical opinion leaders. Come help us kick off the holiday season and celebrate 2011! Sponsorship opportunities are available. For more information, contact Molly Ingraham ( Ingraham@chi.org or 858-456-8884).

For more CHI events or current happenings, visit www.chi.org.