Although the Obama administration's first year in office was consumed with healthcare reform and with kick-starting the faltering economy, some of its earliest decisions affecting science policy bode well for the biotech community and for research in general. Among those decisions are the lifting of the ban on federal funding of human embryonic stem (ES) cells, the reconfiguring of former president Bush's Council on Bioethics and the appointment of biotech-savvy officials to key posts, including Steven Chu at the Department of Energy and Roger Beachy at the National Institute of Food and Agriculture.
 

However, following a special election in Massachusetts that replaced the late Senator Edward Kennedy, a champion of healthcare reform, with the moderate Republican Scott Brown, who opposes it, the fates of key provisions in the healthcare bills dealing with follow-on, or biosimilar, therapeutics and of sizable tax credits to biotech companies for discovery drug research are now up in the air. At the same time, the future of several potentially onerous 'sunshine' provisions stipulating that physician researchers disclose the sources of their research support, honoraria, consulting fees and royalties also appears less clear. Amid that uncertainty, the administration's plans to emphasize comparative effectiveness research, which could affect whether federal programs pay for many of biotech's high-end therapeutic products, also may be thwarted.
 

Another sign of shifting political currents was the surprise announcement in February that Billy Tauzin, CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA) in Washington, would be stepping down this June. Tauzin says that “it is time I move on,” and that he plans to “explore...other interests”—much of which sounds like code for an involuntary departure. Quick to put PhRMA's considerable weight behind healthcare reform, his announced departure could mean that the pharmaceutical industry will seek another stance on reform better suited to the altered political landscape.
 

Even if healthcare reform legislation collapses, there are lessons to be drawn from the negotiations, suggests Arthur Klausner, formerly of the Durham, North Carolina venture firm Pappas Ventures and now based in New York: “Some of the draconian provisions that were scary to pharma and biotech went by the wayside in the healthcare reform bills,” he says.
 

Moreover, the mere fact that both political parties and both the Senate and the House of Representatives reached agreement on biosimilars was important, says Jim Greenwood, president of the Biotechnology Industry Organization (BIO) in Washington, DC. If the pending bills were to pass, those provisions would provide “a pathway for biosimilars that is balanced, while also protecting innovators,” adds Michael Werner, a partner with Washington, DC–based law firm Holland & Knight. “Early in 2009, we weren't sure how this would play out, but Congress arrived at a balance. So patients will benefit because it contains standards for safety and yet drugs will ultimately get into the market.”
 

The provisions for biosimilars are “reasonably good,” agrees Gregory Conko of the Competitive Enterprise Institute (CEI) in Washington, DC. They not only mandate 12 years of “exclusivity,” thus protecting the intellectual property (IP) investments of innovator companies, he says, but also lay out an “approval pathway. The [pending] legislation also calls for clinical results but doesn't specify how much testing to do, giving HHS [the Department of Health and Human Services] that authority and allowing FDA [the Food and Drug Administration] to waive some clinical test procedures. It's not a perfect approval path, but it's generally pretty good.”
 

With healthcare legislation stalled, the biosimilar provisions could be “pushed through on their own” as separate legislation, according to Conko. However, neither the White House nor Representative Henry Waxman (D-CA), who chairs the House Energy and Commerce Committee, is happy with the 12-year exclusivity period. If biosimilars were to be handled in standalone legislation, Waxman, with White House backing, might prove more determined to shorten that 12-year period, a provision that he did not fight while it was bundled into the healthcare reform package. President Obama “should leave it alone,” says Greenwood of BIO.
 

The Waxman approach is “not a way of moving [biosimilars] reform forward,” according to Peter Pitts, president of the Center for Medicine in the Public Interest (CMPI) in New York. More practically, Waxman “doesn't have the votes of his colleagues.” Nonetheless, even though the FDA is “working to develop a regulatory pathway for biosimilars, the agency is still waiting for legislative authority,” he adds.
 

Meanwhile, the biotech industry could also lose ground if the tax credits, known under the rubric “Therapeutic Tax Credit,” were to go down with the pending healthcare reform bills, Greenwood says. “If Congress pivots and turns its attentions to a jobs bill, we will try to get the discovery tax credit into that; it belongs there because it would help to keep companies alive.” That credit would make companies eligible for federal funds to offset R&D costs, and thus would be particularly helpful for companies without products and revenue streams—which is true of the majority of biotechs. “Certainly, we were poised to celebrate this significant accomplishment. We still have a shot to get it done because it has broad support. And it would be sad to have it evaporate,” he says.
 

Yet another part of the massive healthcare reform legislation—known as “Physician Payment Sunshine Provisions”—now seems unlikely to move forward, according to Washington, DC–based Thomas Sullivan, the founder of the website Policy and Medicine and president of the medical education company Rockpointe in Columbia, Maryland. Although the House and Senate versions vary, both sought to require detailed reporting by physicians doing research and consulting, for payments as small as $10, and would have imposed steep fines for failing to disclose such work.
 

Since her appointment as FDA commissioner last May, Margaret Hamburg has already garnered some positive feedback. As Alan Goldhammer, deputy vice president of regulatory affairs at PhRMA in Washington, DC, puts it, “I'm not ready to say the new management is good, bad or indifferent, but they're making good progress.” Thomas Murray, president of the Hastings Center in Garrison, New York, is more effusive: “She's extraordinarily bright, focused, young and energetic, yet shows maturity and gravitas.” Even BIO is warming to Hamburg: “We are comfortable with the new leadership at FDA...Hamburg is bright, understands the industry and is not hostile to optimizing FDA,” says Greenwood.
 

“FDA is standing up for consumers rather than being [only] a strictly regulatory agency,” says Pitts of CMPI. “Hamburg stands up for the culture and beliefs of the staff, and she also stood up to Senator [Byron] Dorgan [D-ND] on drug importation.” Dorgan sought to revive interest in importing drugs to lower their prices, a move that Hamburg resisted, arguing in December that doing so raised “safety concerns.”