Pelosi bill proposes tax credit for R&D
Chances for passage are unclear at this point
Next year, Congress will consider the Pelosi bill, a measure designed to make building a vaccine for TB, HIV, and malaria a more attractive commercial proposition. The Life saving Vaccine Technology Act, written by Rep. Nancy Pelosi (D-CA) and sponsored by Sen. John Kerry (D-MA), proposes to provide a 30% tax credit to big drug companies in return for whatever money they spend on research and development for the Big Three killers. Smaller firms would be eligible for a 20% credit, which they could pass on to investors. The credits would be made available only for work on vaccines for diseases that kill 1 million people or more each year.
The bill also requires any company that produces a vaccine to establish a plan for "the widest possible global access." Companies would not waive rights to pricing, patent ownership, or release of proprietary information; at the same time, the bill endorses "alternative pricing strategies," as well as the concept of a vaccine purchase fund.
The bill’s chances for passage next year are good, says Gordon Douglas, MD, retired head of the vaccine division at Merck. "President Clinton has been talking about this bill and supports it," he notes, referring to the chief executive’s recent speech before the United Nations, in which he stressed the need for better drugs and new vaccines.
At Pasteur Merieux Connaught, based in Swiftwater, PA, Jeff Peterson, the company’s government relations spokesman, says he isn’t so sure. "Good bills tend to get lost in giant politics," he says, citing the beating the drug industry took when a proposed cut to the vaccine excise tax — which sets aside a store of industry money for victims of adverse vaccine reactions — got blasted out of the sky earlier this year.
As for any good will generated by White House support, forget that, says Peterson. "If you think Congress was partisan this year," he laughs, "just wait ’til we have a lame-duck president next year."
Considered strictly from the conceptual point of view, would the bill accomplish what it’s supposed to? "It’s certainly a good first start," says Douglas. "It’ll stimulate some commitment in some companies." But tax credits alone are only a beginning, he adds. "We also need some kind of purchasers’ fund to assure a market. They’re talking about doing that for an AIDS vaccine; why not for TB as well? [See related story, p. 125.] That’ll make people sit up and take notice."
The bill "is an attractive proposal," says Smith Kline Beecham spokesman Brian Jones, spokesman for . "It’s great to see stuff like this come forward to help developing countries." Unfortunately, the Pelosi proposal won’t make a bit of difference to SmithKline Beecham, Jones adds, because the shop’s vaccine division is nestled off in Belgium. The bill might well stimulate company interest in malaria, he adds. "Some of our research in that field is U.S.-based," he explains. "We’re exploring this to see how we can make it work for us."
Vaccine megashop Connaught finds the bill tantalizing enough that it’s convened a workshop to examine the the fine print. A minimum-number-of-victims clause has emerged as a potential trouble spot, Peterson adds: "You can only use this for a vaccine that kills a million or more people," he says. "Our people think that’s too narrowly focused."
Bill can’t help with overseas field trials
Still, Connaught execs are eager to "work with Pelosi," Peterson adds. "We’re heartened by this interest. We’ll probably endorse it the way it is, or else make a few changes."
The bill’s biggest weakness may be that it can’t touch the biggest expense involved in R&D — the trials. Because the United States is a low-prevalence country, companies need to take trials overseas, and tax credits can’t help there, says Fran DuMelle, deputy managing director for the American Lung Association.
Whether the bill passes or not, it should help get the subject of TB vaccines onto the congress ional radar screen, adds DuMelle, and that alone will be a welcome change.
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