Joe Panetta is spending more time on flights to Washington D.C. than ever before. Lobbying has always been part of his job in the decade he’s spent running Biocom, the trade association for San Diego’s life sciences industry. But now he’s under instructions from the Biocom board to make doubly sure industry interests are heard on Capitol Hill at this moment in history when a whole lot of new federal policy is getting made.
“Obama and Congress want to create jobs, and they’re talking about putting money into infrastructure projects, so why not stimulate cutting-edge industries of the future like biotech?” Panetta told me a couple weeks ago during an interview in San Francisco.
A whole host of meaty issues are on the table in Washington these days that can swing the fortunes of Biocom’s 575 members in biotech, pharmaceuticals, and medical devices. The economic stimulus package is really only the warm-up act of things Biocom is pushing for in D.C. these days. Panetta, in a unusual move for a regional trade group chief, is planning to make at least one trip a month to Washington, working closely with the Biotechnology Industry Organization that’s based there.
Here’s a brief rundown of the issues I discussed with Panetta in a 30-minute conversation, which he’s looking to cover with members of Congress:
—Biotech companies would like to see an increase in the $27 billion annual budget of the National Institutes of Health. An estimated $1.8 billion of NIH funding usually flows to Southern California research centers, which are the seedbeds for new companies. This budget has essentially been frozen for about five years, making it much tougher for academics to win federal support for their research ideas.
—Universal health care could put a squeeze on the unfettered pricing power many biotech companies now enjoy for their products. Even serious talks about this are enough to make Wall Street investors run for the hills, since it could cap their upside potential returns, without doing anything to reduce the risk of a business in which nine of 10 drugs fail in clinical trials.
—There’s the question about boosting the FDA budget, and appointing a new commissioner who the industry hopes will be friendly and capable.
—Intellectual property legislation is considered in play, which is sure to generate a scrum between tech and biotech lobbyists. In the most general terms, biotechs want rock-solid patent protection that gives investors confidence that a company has a monopoly right to a technology needed to justify huge capital investment over a number of years. Tech lobbies see if differently, trying to loosen rules to make it harder for patent “trolls” to extract licensing fees from truly innovative companies.
—Of course, there’s the perennial debate over whether it should be easier in America for generic drugmakers to offer cheaper copycat versions of biotech drugs, like they have done for years with conventional small-molecule pharmaceuticals. The brand-name industry companies have long argued these aren’t identical copies, they are “biosimilars” or “follow-on biologics,” that really require full-blown, expensive clinical trials to prove they are safe and effective (which would make it essentially impossible for them to be true, cheaper alternatives.)
Part of Panetta’s mission is to win new friends across California’s Congressional delegation, beyond the supporters that biotech already has in San Diego, he says. House Speaker Nancy Pelosi of San Francisco has an obvious interest in the industry because of her district, but beyond the core hubs of the Bay Area and San Diego, Panetta talks like he has been practicing his pitch to members of Congress on why they ought to get behind the life sciences business.
He had a quick reply when I asked why these representatives would want to join his team. If biotech is able to keep people employed in high-wage jobs, paying state income taxes, and keeping them in their homes and paying property taxes, then “The entire state benefits,” he says.