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Bioshield Too Little for Drug Industry
Companies Want More Protection From Financial Loss


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President Bush signed the Project Bioshield bill Wednesday in the White House Rose Garden. The law promotes development of drugs to counteract biological attacks by providing financial incentives to drug companies. (Evan Vucci -- AP)

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By Michael Barbaro
Washington Post Staff Writer
Monday, July 26, 2004; Page E01

When President Bush signed Project Bioshield into law last week, few companies seemed to have more to celebrate than Human Genome Sciences Inc., a Rockville biotechnology firm that has spent more than $10 million to develop a drug to prevent and treat anthrax infections.

Anthrax infections are rare, so the drug has little appeal to the average consumer. But Project Bioshield, which sets aside $5.6 billion for the government to stockpile a medical arsenal against biological weapons, gives Human Genome Sciences exactly what it needs: a buyer.

Yet executives at Human Genome Sciences are hardly cheering. The drug has cleared several tests, but the government has not ordered a single dose. And even if it does, it may buy only a small amount, making it hard for the company to earn much of a profit.

"There is just a lot of uncertainty," said James H. Davis, Human Genome Science's general counsel.

Bioshield, which the government has billed as the first step in creating a biodefense industry in the United States, has received a largely lukewarm response from the companies it was designed to help.

The bill authorizes the use of federal money over 10 years to buy drugs and vaccines to counter a wide range of pathogens. Under the law, federal health officials can contract to buy drugs still under development, with purchases contingent upon tests establishing that the treatments work.

It allows the Food and Drug Administration to authorize use of unapproved products in emergencies and gives the National Institutes of Health the power to speed up biodefense research.

Industry executives and analysts say that developing medicines for use after a biological attack remains a highly risky business, with long development times, slim profit margins and the possibility of devastating patient lawsuits if a drug fails.

"I can't blame companies for not wanting to get involved," said Charles L. Bailey, executive director of research at the National Center for Biodefense at George Mason University. "It is not a very attractive market."

Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, said that by guaranteeing the government will purchase a successful product under contract, Bioshield has removed a major roadblock for companies.

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