Chuck Ludlam, former legislative counsel to Sen. Joseph Lieberman, D-Conn., said the government needed to offer dramatic incentives to drug companies, including liability protection and intellectual property rights.

Ludlam made his recommendation at a panel discussion hosted by the Senate subcommittee on bioterrorism and public health preparedness.

The 2005 Lieberman-Brown-Hatch BioShield II Act proposes intellectual property protections such as patent extensions, as well as federal tax incentives and liability protection, for drug companies that undertake biodefense research.

"The cost of the proposed incentives is trivial compared to the cost of a bioterror attack or infectious disease outbreak," Ludlam said. "If we don't get products we know millions of people will die of AIDS, malaria or tuberculosis. What if SARS gets loose or avian flu? The only incentive in the bill that will turn heads are the intellectual property provisions."

George Barrett, president of Teva Pharmaceuticals in North Wales, Pa., said the use of a wildcard patent extension -- which enables a company to choose to extend a patent for any drug in return for developing a new biodefense drug -- should be regarded with some concern.

He said any drug granted such a concession should be superior, unique and must work.

"My concern is the IP provision will indirectly shift cost of homeland security onto the healthcare system," Barrett said.

"If biosecurity is a real problem, then the biopharma industry is a critical national resource," said Dr. Tara O'Toole, director of the center for Biosecurity of the University of Pittsburgh Medical Center. "Intellectual property is a way to make money and to promote innovation."

O'Toole acknowledged there would be indirect costs affecting the healthcare system, but said a way to lower costs would be to figure a way to accelerate the time it takes to produce drugs.

"If we don't drive down the costs of drugs, we're cooked -- both in healthcare and biodefense," she said.

The first BioShield, signed into law by President George W. Bush last year, provided $5.6 billion to purchase vaccines as countermeasures to bioterror attacks. The money is supposed to be used to acquire vaccines against smallpox, anthrax, botulinum toxin, Ebola and plague, but the program largely has been shunned by biotechnology firms and big Pharma because of potential legal liability and low profit outlook.

"A company won't normally develop product for anthrax because there is not market," said David Wright, president of PharmAthene Inc. in Annapolis, Md., a biotechnology company that develops medical countermeasures to bioterrorism. "The country has everything to gain because of the devastation one anthrax attack."

Sen. Richard Burr, R-N.C., said he and his Senate colleagues were committed to draft legislation that would significantly improve the nation's ongoing biodefense efforts.

Sen. Orrin Hatch, R-Utah, said the issue was "too hard and too serious to nibble around the edges, but needed broad legislation."

O'Toole said the pharmaceutical industry will not consider Congress serious about BioShield unless legislators address the liability issue of non-negligent harm for drugs.

"There is a lot of false alarm," said George Conk, a trial attorney in New Jersey and a law professor at Fordham University in New York City. "The norm is they are only liable if they are negligent."

Conk disagreed that liability protection was a necessary component to include in the biodefense legislation.

"That may be the way it looks on paper but it doesn't play out that way in court," said Bronwen Kaye, senior director of government relations for Wyeth Corp. in Madison, N.J.

She said her company has lost millions from litigation of a vaccine that had no design defect, but was blamed for damages. The commercial side of developing drugs is under threat from crushing litigation, because of the liability issue, she said, adding that there are only four companies that make vaccines and only two are in the United States.

"Vaccines are the cornerstone for biodefense preparation," Kaye said, adding that the commercial side of the drug industry is under threat.

Ludlam, principal author of the BioShield II bill, said there currently are no incentives for the pharmaceutical industry to get into the biodefense market and Congress needed to take aggressive action to provide those incentives.

"The only person able to move a comprehensive bill is Dr. Frist," Ludlam said -- referring to Senate Majority Leader Bill Frist, R-Tenn. -- because there were eight other Senate committees needed to review the new BioShield II legislation.

"The entire success of the effort depends on Frist," Ludlam said.

Andrew Damstedt is an intern for UPI Science News.

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