Breaking a Link in the Value Chain

Looking at the whole value chain of innovation.

PhRMA StaffFebruary 22, 2011

Over the weekend, The Boston Globe ran an article that included a turn of phrase that I thought was a keeper: "the whole value chain of innovation."

What a great way to describe the wide range of benefits provided by a strong biopharmaceutical research sector, from jobs to tax revenues to the development of new medicines.

Unfortunately, this excellent phrase was used to describe the harm that could be done to the value chain of innovation in Massachusetts by a provision in President Obama's recent budget proposal. Worse, it's an effect that could be mirrored across the country.

The provision at issue would reduce the period of data protection - or set period of time before generics companies could introduce so-called "biosimilar" products based on the data included in the approval of an innovative brand product - from 12 years to seven years, despite the original 12 years becoming law with strong bipartisan support during the healthcare reform debate.

We strongly feel that this move would lead to a big step back in American medical innovation. Slashing such an important incentive for biotech R&D would, as the Globe cites Biogen Idec spokesman Tim Hunt as saying, clearly disrupt the value chain of innovation.

And, in fact, reducing data protection for biologics to seven years would set us behind the current policies in Europe, thereby heightening the competition for our biopharmaceutical sector from abroad. U.S. firms account for 80 percent of the world's R&D in biotechnology, but that might not be the case with weakened data protection for innovators.

Of course, let's not forget that most important link in the value chain: development of new medicines. Some of the most groundbreaking new medicines approved in the U.S. in recent years have been biotech products. They're changing and saving lives around the world, and only beginning to show their full promise.

Now is not the time to take a big step backward for a sector that invests in our country and in our patients.

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