Key to biotech lies in intellectual property rights

Today, in labs here in Atlanta and across the country, the best scientific minds are leading the effort to track and decipher the Influenza A/H1N1 outbreak. They’re working as well on other scourges of a different sort, including cancer, Alzheimer’s disease and diabetes.

This week, thousands have gathered in Atlanta for the 2009 BIO International Convention. If history is any guide, these individuals will bear a disproportionate responsibility for our nation’s future health.

Our elected representatives in Washington will also help determine the course of public health and the future of America’s biosciences industry, an endeavor that today directly employs 1.3 million Americans, including 15,000 right here in Georgia.

Congress is now considering legislation to govern the sale of follow-on versions of biotech products, called “biosimilars.” The outcome could preserve our industry’s fighting chance to succeed — or it could destroy the rationale for biotech investment in the first place. This is a sobering threat in light of the current headlines.

Generic medicines are a vital component of health care, delivering powerful treatments at very low cost. But consider where generic medicines come from. They are built on molecules discovered and developed by innovator companies, requiring an average investment on the order of $1 billion for every new therapy introduced for sale. Innovation might be considered a luxury if health threats remained in check, but mutating viruses and growing epidemics command new answers and approaches. So do other diseases that continue to plague the developing and developed world.

Therefore, a biosimilars law needs to preserve both parts of that equation — the incentives for research and development along with the prospect of future, lower-cost alternatives. Without the inventions, there could be no copies.

Balancing that equation comes down to protecting, for a meaningful period of time, the inventors’ “intellectual property” — a concept key to our innovation-driven economy.

Over the last several years, the company I lead, Eli Lilly, has grown to be the fifth largest biotechnology company in the world. Recently, we have expanded our biotech base through acquisitions — including the purchase last year of a state-of-the-art biotech manufacturing facility in Augusta. But while bricks and mortar help sustain our growth, what Lilly has invested in is something much more important: human capital and the great ideas our scientists bring to biomedical innovation. In other words, our most important investment is in the know-how of our employees and in intellectual property.

Policy-makers have generally agreed that, in biotech, intellectual property can be made secure by laws that offer fair “data package protection.” This means that for a certain period of time after the Food and Drug Administration approves a new biotech medicine, no one other than the inventor-company could reference the inventor’s data about the medicine and its manufacturing process in another application to the FDA. Generic manufacturers would need to wait until the data-protection period expires before seeking approval to sell a similar version.

Some in Congress, unfortunately, support biosimilars legislation with only short periods of data protection, which would leave America’s biotech companies with little hope of recouping investments on most of our most promising ideas for new medicines. Independent experts believe 14 years of protection are needed to justify the enormous development costs for new biologic medicines.

The bipartisan “Pathways for Biosimilars Act,” introduced in the U.S. House, gets its right by incorporating the 14 years of data protection. This bill preserves incentives for innovation — which is the basis for breakthrough medicines and the high-paying jobs in Georgia’s biotech sector.

Leaders in other industries have been lobbying Congress for bailouts in this very difficult time. Even though a third of publicly traded biotech companies have less than six months of cash left, our industry chooses another course. U.S. biotech can stay strong, grow and continue to create jobs through private investment alone. But just as we want the best scientists to protect our nation from emerging health threats, we need thoughtful public policy to provide life-saving biotech companies with a fighting chance.

John C. Lechleiter is chairman, president and CEO of Eli Lilly and Co.