Frank Gottron
Specialist in Science and Technology Policy
In 2004, Congress passed the Project BioShield Act (P.L. 108-276) to encourage the private sector to develop medical countermeasures to chemical, biological, radiological, and nuclear (CBRN) terrorism agents and to provide a novel mechanism for federal acquisition of those newly developed countermeasures. Although some countermeasures have been acquired through this law, Congress continues to address several Project BioShield-related policy issues. These include whether to continue diverting Project BioShield acquisition funding to other purposes; whether to change the countermeasure development and acquisition process; how to replace stockpiled countermeasures as they expire; and whether to alter federal efforts to encourage the development of broad-spectrum countermeasures.
This law has three main provisions: (1) relaxing regulatory requirements for some CBRN terrorism-related spending, including hiring personnel and awarding research grants; (2) guaranteeing a federal market for new CBRN medical countermeasures; and (3) permitting emergency use of unapproved countermeasures. The Department of Health and Human Services (HHS) has used each of these authorities. The HHS used expedited review authorities to approve contracts and grants related to CBRN countermeasure research and development. The HHS used the authority to guarantee a government market to obligate approximately $2 billion to acquire countermeasures against anthrax, botulism, radiation, and smallpox. The HHS has also employed the emergency use authority several times, including to allow young children with H1N1 “swine” influenza to receive specific antiviral drugs.
The Department of Homeland Security (DHS) Appropriations Act, 2004 (P.L. 108-90) advance appropriated $5.593 billion for FY2004 to FY2013 for CBRN countermeasures acquisition through Project BioShield. Subsequent Congresses have rescinded or transferred to other accounts approximately 20% of the advance appropriation. In FY2004 and FY2005, Congress removed a total of approximately $25 million from this account through rescissions included in the Consolidated Appropriations Act, 2004 (P.L. 108-199) and the Consolidated Appropriations Act, 2005 (P.L. 108-447). In the Omnibus Appropriations Act, 2009 (P.L. 111-8), Congress transferred $412 million from this account to support countermeasure advanced research and development and pandemic influenza preparedness and response. The Consolidated Appropriations Act, 2010 (P.L. 111-117) transferred $609 million from this account to support basic research and advanced countermeasure development. P.L. 111-117 also transferred the remaining Project BioShield funds from DHS to HHS. The Continuing Appropriations and Surface Transportation Extensions Act, 2011 (P.L. 111-322) allows the transfer of approximately $130 million from this account for advanced countermeasure development.
Since passing the Project BioShield Act, subsequent Congresses have considered additional measures to further encourage countermeasure development. The 109th Congress created the Biomedical Advanced Research and Development Authority (BARDA) in HHS through the Pandemic and All-Hazard Preparedness Act (P.L. 109-417). Among other duties, BARDA oversees all of HHS’s Project BioShield procurements. The Pandemic and All-Hazard Preparedness Act also modified the Project BioShield procurement process. Some stakeholders question whether these changes have sufficiently improved federal countermeasure development and procurement. The Administration plans to improve the countermeasure research, development, and acquisition process based on findings of an HHS review.
Date of Report: February 7, 2011
Number of Pages: 19
Order Number: R41033
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Wendy H. Schacht
Specialist in Science and Technology Policy
John R. Thomas
Visiting Scholar
Congressional interest in health-related issues has refocused attention on legislative efforts to provide both new as well as lower-cost pharmaceuticals for the marketplace. Several recent attempts at developing a mechanism to accelerate Food and Drug Administration (FDA) approval of follow-on biologics after the innovator product loses patent protection are based on provisions contained in P.L. 98-417, the Drug Price Competition and Patent Term Restoration Act of 1984 (commonly known as the Hatch-Waxman Act). This legislation made significant changes to the patent laws as they apply to pharmaceutical products in an attempt to balance the need for innovative new drugs and the availability of less expensive generic products. The Act created several practices intended to facilitate the marketing of generic drugs while permitting brand name companies to recover a portion of their intellectual property rights lost during the pharmaceutical approval process. Twenty-five years later, the effects of the Act on the traditional drug market may have implications for current congressional efforts in the biopharmaceutical sphere.
Prior to the implementation of the Hatch-Waxman Act, 35% of top-selling drugs had generic competitors after patent expiration; now almost all do. The Generic Pharmaceutical Association points out that of 12,751 drugs listed in the Orange Book, 10,072 have generic substitutes available to consumers. Concurrently, the time to market for these generic products has decreased substantially. According to the Congressional Budget Office, in 1984 the average time between the expiration of a patent on a brand name drug and the availability of a generic was three years. Today, upon FDA approval a generic may be introduced immediately after patents on the innovator drug expire as companies are permitted to undertake clinical testing during the time period associated patents are in force. In cases where the generic manufacturer is the patent holder, a substitute drug may be brought to market before the patent expires.
Industry support for pharmaceutical research and development has grown since the passage of the legislation. In the absence of the research, development, and testing performed by the brand name pharmaceutical companies, generic drugs would not exist. The provisions of the Hatch-Waxman Act permit the generic industry to rely on information generated and financed by the brand name companies to obtain approval for their product by the FDA. However, the pharmaceutical industry today differs significantly from what it was in the early 1980s when the legislation was enacted. The cost of developing a drug has doubled, as has the number of clinical trials necessary to file a new drug application. The number of participants required for these trials has tripled. As the rate of return on investments in a new drug declined 12%, manufacturers often spend R&D dollars on developing improved versions of, or new delivery methods for an existing product.
Many experts agree that the Drug Price Competition and Patent Term Restoration Act has had a significant effect on the availability of generic substitutes for brand name drugs. Congressional interest in extending a similar accelerated marketing approach to biologic drugs may be indicative of this situation. Yet, congressional concerns remain whether or not the balance inherent in the Act remains appropriate twenty-five years later.
Date of Report: February 8, 2011
Number of Pages: 20
Order Number: R41114
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Wendy H. Schacht
Specialist in Science and Technology Policy
John R. Thomas
Visiting Scholar
Congressional interest in patent policy and possible patent reform has expanded as the importance of intellectual property to innovation has increased. Patent ownership is perceived as an incentive to the technological advancement that leads to economic growth. However, growing interest in patents has been accompanied by persistent concerns about the fairness and effectiveness of the current system. Several recent studies, including those by the National Academy of Sciences and the Federal Trade Commission, recommended patent reform to address perceived deficiencies in the operation of the patent regime. Other experts maintain that major alterations in existing law are unnecessary and that the patent process can adapt, and is adapting, to technological progress.
Patent reform proposals introduced in the 111th Congress would have worked significant legal changes to the patent system. Among the more notable of these proposed changes was a shift to a first-inventor-to-file priority system; substantive and procedural modifications to the patent law doctrine of willful infringement; and adoption of post-grant review proceedings, prior user rights, and pre-issuance publication of all pending applications. Several of these proposals have been the subject of discussion for many years, but others are more novel propositions.
Although the 111th Congress did not enact this broadly oriented legislation, it did enact P.L. 111- 349 (H.R. 628). This law established a pilot program in certain U.S. district courts under which (1) the chief judge of the court designates district judges who request to hear cases involving patent or plant variety protection issues; (2) such cases are randomly assigned to district court judges, whether designated or not; (3) a non-designated judge may decline the case; and (4) a declined case is then randomly reassigned to a designated judge.
Additional legislative reform efforts in the previous Congress (H.R. 1260, S. 515, and S. 610) would have addressed several issues of concern, including the quality of issued patents, the expense and complexity of patent litigation, harmonization of U.S. patent law with the laws of our leading trading partners, potential abuses committed by patent speculators, and the special needs of individual inventors, universities, and small firms with respect to the patent system.
The provisions of the proposed legislation would arguably work the most sweeping reforms to the U.S. patent system since the 19th century. However, many of these proposals, such as pre-issuance publication and prior user rights, have already been implemented in U.S. law to a more limited extent. These and other reforms, such as the first-inventor-to-file priority system and post-grant review proceedings, also reflect the decades-old patent practices of Europe, Japan, and our other leading trading partners.
Some observers are nonetheless concerned that certain of these proposals would weaken patent rights, thereby diminishing incentives for innovation. Others believe that changes of this magnitude, occurring at the same time, do not present the most prudent course for the patent system. Patent reform therefore confronts Congress with difficult legal, practical, and policy issues, but also with apparent possibilities for altering and possibly improving the legal regime that has long been recognized as an engine of innovation within the U.S. economy.
Should patent reform legislation be subject to consideration in the 112th Congress, a separate report or reports will be issued.
Date of Report: January 20, 2011
Number of Pages: 48
Order Number: R40481
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John F. Sargent Jr.
Specialist in Science and Technology Policy
Nanotechnology—a term encompassing nanoscale science, engineering, and technology—is focused on understanding, controlling, and exploiting the unique properties of matter that can emerge at scales of one to 100 nanometers. A key issue before Congress regarding nanotechnology is how best to protect human health, safety, and the environment as nanoscale materials and products are researched, developed, manufactured, used, and discarded. While the rapidly emerging field of nanotechnology is believed by many to offer significant economic and societal benefits, some research results have raised concerns about the potential adverse environmental, health, and safety (EHS) implications of nanoscale materials.
Some have described nanotechnology as a two-edged sword. On the one hand, some are concerned that nanoscale particles may enter and accumulate in vital organs, such as the lungs and brains, potentially causing harm or death to humans and animals, and that the diffusion of nanoscale particles in the environment might harm ecosystems. On the other hand, some believe that nanotechnology has the potential to deliver important EHS benefits such as reducing energy consumption, pollution, and greenhouse gas emissions; remediating environmental damage; curing, managing, or preventing diseases; and offering new safety-enhancing materials that are stronger, self-repairing, and able to adapt to provide protection.
Stakeholders generally agree that concerns about potential detrimental effects of nanoscale materials and devices—both real and perceived—must be addressed to protect and improve human health, safety, and the environment; enable accurate and efficient risk assessment, risk management, and cost-benefit trade-offs; foster innovation and public confidence; and ensure that society can enjoy the widespread economic and societal benefits that nanotechnology may offer. Congressionally-mandated reviews of the National Nanotechnology Initiative (NNI) by the National Research Council and the President’s Council of Advisors on Science and Technology have concluded that additional research is required to make a rigorous risk assessment of nanoscale materials.
Date of Report: January 20, 2011
Number of Pages: 40
Order Number: RL34614
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John F. Sargent Jr.
Specialist in Science and Technology Policy
Nanoscale science, engineering and technology—commonly referred to collectively as nanotechnology—is believed by many to offer extraordinary economic and societal benefits. Congress has demonstrated continuing support for nanotechnology and has directed its attention primarily to three topics that may affect the realization of this hoped for potential: federal research and development (R&D) in nanotechnology; U.S. competitiveness; and environmental, health, and safety (EHS) concerns. This report provides an overview of these topics—which are discussed in more detail in other CRS reports—and two others: nanomanufacturing and public understanding of and attitudes toward nanotechnology.
The development of this emerging field has been fostered by significant and sustained public investments in nanotechnology R&D. Nanotechnology R&D is directed toward the understanding and control of matter at dimensions of roughly 1 to 100 nanometers. At this size, the properties of matter can differ in fundamental and potentially useful ways from the properties of individual atoms and molecules and of bulk matter. Since the launch of the National Nanotechnology Initiative (NNI) in 2000 through FY2011, Congress has appropriated approximately $14.2 billion for nanotechnology R&D, including approximately $1.8 billion in FY2011 funding under the current continuing resolution (P.L. 111-322). More than 60 nations have established similar programs. In 2006 alone, total global public R&D investments reached an estimated $6.4 billion, complemented by an estimated private sector investment of $6.0 billion. Data on economic outputs used to assess competitiveness in mature technologies and industries, such as revenues and market share, are not available for assessing nanotechnology. Alternatively, data on inputs (e.g., R&D expenditures) and non-financial outputs (e.g., scientific papers, patents) may provide insight into the current U.S. position and serve as bellwethers of future competitiveness. By these criteria, the United States appears to be the overall global leader in nanotechnology, though some believe the U.S. lead may not be as large as it was for previous emerging technologies.
Some research has raised concerns about the safety of nanoscale materials. There is general agreement that more information on EHS implications is needed to protect the public and the environment; to assess and manage risks; and to create a regulatory environment that fosters prudent investment in nanotechnology-related innovation. Nanomanufacturing—the bridge between nanoscience and nanotechnology products—may require the development of new technologies, tools, instruments, measurement science, and standards to enable safe, effective, and affordable commercial-scale production of nanotechnology products. Public understanding and attitudes may also affect the environment for R&D, regulation, and market acceptance of products incorporating nanotechnology.
In 2003, Congress enacted the 21st Century Nanotechnology Research and Development Act providing a legislative foundation for some of the activities of the NNI, addressing concerns, establishing programs, assigning agency responsibilities, and setting authorization levels. Legislation has been introduced in the 110th Congress and 111th Congress to amend and reauthorize the act.
Date of Report: January 19, 2011
Number of Pages: 16
Order Number: RL34511
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