Better Science, Better Health Care
How the Health Reform Bill Supports Biomedical Research
SOURCE: AP/Gerald Herbert
President Barack Obama tours an oncology laboratory with Health and Human Services Secretary Kathleen Sebelius, right, in September, 2009, at the National Institute of Health in Bethesda, Maryland. At left is Dr. Marston Linehan, Dr. Francis Collins is second from right.
The newly signed Patient Protection and Affordable Care Act will not only extend coverage to millions of families and individuals without affordable insurance—it will also infuse our health care system with innovative scientific and technological resources that will benefit all Americans.
There are three major provisions in the new law that promise to bring care-enhancing innovations to patients everywhere. The Cures Acceleration Network, or CAN, will speed new therapies from bench to bedside. The Patient-Centered Outcomes Research Institute will bring develop and disseminate information on the effectiveness of different treatments. And the Qualifying Therapeutic Discovery Project Credit will support small biotech firms investing in new treatments for unmet and chronic care needs.
The goal of the Cures Acceleration Network, introduced by Sen. Arlen Specter (D-PA), is “to accelerate the development of high needs cures,” defined by the legislation as priority treatments “for which incentives of the commercial market are unlikely to result in adequate or timely development.” These therapies may include regenerative medicine treatments that rely on decoding genes and mapping complex biochemical pathways for diseases like Parkinson’s, ALS, or multiple sclerosis.
The new law authorizes $500 million for fiscal year 2010, allocated through grants or contracts that may not exceed $15 million. The contracts are termed “partnership awards” and require the recipient to contribute matching funds of one dollar for every three federal dollars, whereas the “grant awards” do not require a match. The National Institutes of Health director is also given the authority to dispense no more than 20 percent of the appropriated funds at his own discretion for “flexible awards.”
As well, another component of the Cures Acceleration Network mission will be to facilitate Food and Drug Administration review of these high-needs cures. The bill instructs the FDA to coordinate its approval requirements with CAN’s activities and to provide technical assistance in order to expedite product development and approval.
CAN will also promote personalized medicine by supporting the development of diagnostics, preventative therapies, and behavioral therapies, as well as biomarkers that can predict the safety and effectiveness of such therapies for patients based on their individual genetic makeup.
Senators Max Baucus (D-MT) and Kent Conrad (D-ND) originally introduced the Patient Centered Outcomes Research Institute last summer in separate legislation. I explained then that the project was “designed to ramp up medical innovation for the common good by championing a new era of personalized medicine.”
This Institute will be tasked with organizing, funding, aggregating, and disseminating comparative effectiveness research, which looks at two or more treatments side by side to see which produces better health outcomes for a particular group of patients. The version of the Institute enacted in the health reform bill will be established as a non-profit entity that is completely separate from the federal government. A dedicated tax stream will fund the Institute’s trust fund beginning in 2013, but the law also appropriates Treasury funds for the trust fund from 2010 until 2019, when both sources of funding sunset.
Research at the Institute will pay special attention to the needs of subpopulations including “racial and ethnic minorities, women, age, and groups of individuals with different comorbidities, genetic and molecular sub-types, or quality of life preferences.” It will explore the impact of where treatments are in the product development process and the skill level of health professionals administering the treatment to see how those factors impact effectiveness. These are real-world considerations that other forms of research like clinical trials often miss.
Most importantly, the Institute is charged with making its data comprehensible, protecting patient privacy and confidentiality, and explaining the data’s limitations and relevance for subpopulations. The Personalized Medicine Coalition, a non-profit representing a broad array of private, public, non-profit, and academic stakeholders has praised the bill’s establishment of the Institute and its thorough incorporation of personalized medicine.
The law also contains good news for small biotech companies, specifically those with less than 250 employees. These firms will be eligible for a tax credit equal to 50 percent of their investment in any “qualifying therapeutic discovery project.” These can include pre-clinical studies, clinical trials, or other clinical studies conducted for the purpose of winning FDA approval of a treatment, diagnostic, or treatment delivery technology. Companies will need to apply for these tax credits and the total amount may not exceed $1 billion for FYs 2009-2010. The projects must possess certain attributes, such as the potential to treat chronic conditions or ailments in areas of unmet need, reduce long-term health care costs, or contribute to curing cancer. The selected projects must also have “the greatest potential to create and sustain high quality, high-paying jobs.”
Another issue addressed by the law has to do with the biologics industry. Biologics are drugs composed of large, complex molecules that are manufactured through complicated cellular processes, as opposed to small-molecule drugs that are manufactured through simple chemical reactions. Since these drugs are so complex that a firm can create a generic version of an existing drug that is similar enough to fit into the same drug class but different enough to avoiding infringing the patent for the reference drug. These generics are referred to as “biosimilars” or “follow-on biologics.” The health reform law alters the landscape for biologics by establishing a clear FDA regulatory pathway for biosimilar drugs while simultaneously establishing a 12-year period of market exclusivity protection for the companies that create the original biologics. Early reports indicate that the new law seems positive for the biotech industry as a whole.
The legislation also leverages transparency efforts to reduce conflicts of interest within medical research and clinical practice. In 2013, the Department of Health and Human Services will begin tracking the funds and gifts that the medical industry provides to physicians, researchers, and hospitals through reporting requirements. This information will then be made available in a public database.
Michael Rugnetta is a research assistant with the Progressive Bioethics Initiative at the Center for American Progress.
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