RESEARCH TRIANGLE PARK – A new report calls on US leaders to take several specific steps to safeguard US leadership in the increasing competitive world of biotechnology.

“If the United States is serious about maintaining its leadership in biopharmaceuticals, then it’s time for policymakers to articulate and embrace a robust sectoral competitiveness strategy,” writes Stephen Ezell at the Information Technology & Innovation Foundation, a Washington DC-based think tank.

The specific recommendations in the “Ensuring U.S. Biopharmaceutical Competitiveness” report follow:

Maintain U.S. Strengths

  • The Trump and future administrations should not introduce drug price control schemes, such as the Department of Health and Human Services’ (HHS) proposed International Pricing Index Model for Medicare Part B Drugs.
  • The National Institute of Standards and Technology (NIST) should affirm that price is not an adequate basis for the exercise of march-in rights under the Bayh-Dole Act.
  • Congress should reauthorize the Prescription Drug User Fee Act (PDUFA) when renewal comes up in 2022, and continue to incorporate innovation-enhancing elements to it.
  • The U.S. Treasury should apportion any withheld user fees to the U.S. Patent and Trademark Office (USPTO) with alacrity to fund continued, uninterrupted USPTO operations.

Expand and Adopt New Policies to Spur Greater Domestic Innovation

Research & Development Funding
  • Congress should at least restore National Institutes of Health (NIH) funding to 2003 levels as a share of gross domestic product (GDP), which would entail boosting NIH funding by $11.6 billion annually.
  • Congress should close the federal research and development (R&D) underinvestment gap in the life-sciences and other sectors by passing the bipartisan Endless Frontiers Act.
  • The Department of Commerce should promote the creation of R&D megafunds by establishing an office to develop and implement the needed incentives and oversight for the creation of megafunds.
Investment Incentives
  • Congress should at least double the Alternative Simplified R&D tax credit.
  • Congress should amend the existing collaborative R&D tax credit to allow companies to take a flat 20 percent tax credit when they invest in university R&D activity.
  • Congress should stimulate further investment in rare-disease R&D and innovation by restoring the orphan drug tax credit to 50 percent.
  • Congress should amend Section 469 of the tax code to permit passive investors to take advantage of the net operating losses and research tax credits of the companies in which they invest.
Supporting Data-Driven Drug Development
  • Congress should direct HHS to implement a unique patient identifier, as originally intended by the Health Insurance Portability and Accountability Act (HIPAA).
  • Policymakers should enforce the publication of data from clinical trial results by directing agencies such as the Food and Drug Administration (FDA) and NIH to be more aggressive about penalizing noncompliance.
  • Congress should direct HHS to create a model for data trusts that facilitates data sharing among biopharmaceutical stakeholders involved with data-driven drug development.
  • Congress should increase the availability of new kinds of data from nontraditional sources, such as biometric, lifestyle, and environmental data, to aid the drug-development process, such as by ensuring NIH provides adequate funding supporting the All of Us Research Program’s million-person research cohort.
  • Congress should direct the FDA to develop best practices for data collection in health care to ensure equitable outcomes.
  • Congress should ensure the FDA has the resources necessary to increase foreign clinical trial inspections, harmonize regulatory standards across national lines to meet the agency’s satisfaction, and adopt risk-assessment analytics tools to prioritize inspections for high-risk sites.
Expand R&D Talent
  • Congress should appropriate $20 million per year for the establishment of a National Science Foundation (NSF)-Industry Ph.D. Fellows Program, to support an additional 1,000 Ph.D. students in STEM (science, technology, engineering, and mathematics) fields.
  • Congress should make it easier for foreign graduates with a STEM degree to receive a green card.
  • The federal government should not restrict L-1 visas.
Collaboration to Increase Efficiency in Drug Development
  • Federal support for joint industry-university research efforts in biopharma R&D efficiency and effectiveness should be expanded.

Support Policies to Spur Increased Domestic Production

Support R&D for Biopharma Process Innovation
  • Congress should significantly expand funding for biomedical Manufacturing USA centers, including for the National Institute for Innovation in Manufacturing Biopharmaceuticals (NIIMBL), as well as establish other centers that address related manufacturing technology challenges.
  • Federal funding for NIIMBL and the other Institutes of Manufacturing Innovation that constitute the Manufacturing USA network should be ongoing and not sunset.
  • Congress should fund NSF to both expand support to university-industry research centers working on biopharmaceutical production technology and establish new centers.
  • Congress should increase funding for NSF’s Division of Engineering, and target much of the increase to the Chemical Process Systems Cluster and Engineering Biology and Health Cluster.
  • The administration should encourage the creation of the biopharma equivalent of the Semiconductor Research Corporation, a public-private consortium dedicated to developing long-term industry R&D and technology development roadmaps.
  • The industry should collaborate on a production technology innovation roadmap, and the federal government should match industry funding to research institutes and universities on a dollar-for-dollar basis.
  • Congress should establish an investment tax credit for new manufacturing facilities and equipment in the United States.
  • Congress should expand the Manufacturing Engineering Education Grant program from its current $15 million annual funding and direct the Department of Defense (DOD) to develop a competition for biomedical manufacturing programs.
  • Congress should expand funding for NSF’s Advanced Technical Education program and target the funds to the development of centers focused on industry skill needs.
Create Incentives for Domestic Production
  • Congress should task the administration with developing a national medical products strategy that would identify key vulnerabilities in biopharmaceutical and medical-product supply chains and develop solutions, where appropriate, to encourage reshoring or promote greater levels of domestic manufacturing at home.
  • Congress should create the equivalent of the CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act and American Foundries Act, legislation supporting the expansion of U.S. semiconductor production, for the biopharmaceutical industry. This would include allocating at least $5 billion per year to states (matched at least with 50 cents in state funding for every $1 in federal funding) to provide incentives for the establishment of new biomedical production facilities in the United States.
  • Congress should restore the tax credit for biopharma production in Puerto Rico and other U.S. territories.
Reform Regulations of Biomedical Production
  • Congress and the administration should continue to work with the FDA to streamline and accelerate the agency’s capacity to evaluate and approve innovative new pharmaceutical manufacturing processes.

More Aggressively Contest Foreign Biopharmaceutical Mercantilism

  • A key objective of U.S. trade policy should be to prevail on America’s trade partners to appropriately value innovative medicines.
  • Congress should use the opportunity of Trade Promotion Authority (TPA) renewal to affirm that a key priority of U.S. trade policy should be that America’s trade partners pay their fair share for innovative drugs.
  • U.S. trade policy needs to resist the mistaken view that IP is not a trade policy issue. At a minimum, U.S. administrations should continue to seek at least 10 years of data exclusivity in Federal Trade Agreements (FTAs), including the FTA currently being negotiated with the United Kingdom and also the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which the next presidential administration should seek for the United States to join.
  • The United States Trade Representative’s (USTR) Office should continue to contest countries’ data localization practices and restrictions on genomic data movement as well as promoting rules, such as those in the United States-Mexico-Canada (USMCA) free trade agreement (FTA), that promote open data flows and proscribe data localization measures.
  • U.S. policy should promote the development of an interoperable, integrated global digital health framework.