Young biotech companies such as Genentech Inc. say that U.S. export laws represent a serious threat to their technological leadership in international biotech competition. That risk may be greater than the potential loss of their expertise through partnerships with foreign competitors, they say.
American firms cannot export new drugs that have not been approved by the U.S. Food and Drug Administration for use in this country. (Exceptions exist for antibiotics and research products.)
But foreign firms that have sponsored research by a U.S. biotech company may become annoyed if they cannot get access to the products that result from the partnerships.
So Genentech has agreed in some cases to yield its innovative production technology to its foreign partners if the substance involved is approved in the partner's country before it is approved here.
Genentech complains that large U.S. pharmaceutical companies can get around the export rules by building manufacturing plants overseas. Amgen, a California biotech company, said an advantage of its joint venture with Kirin Brewery Co. Ltd. is that Kirin-Amgen Inc. can produce overseas if necessary.
The Industrial Biotechnology Association and the Association of Biotechnology Companies have lobbied for relaxation of the export restriction. Last year, Sen. Orrin G. Hatch (R-Utah) introduced a bill that would have allowed the export of some drugs without FDA approval. That bill died, but a Hatch aide said the senator intends to hold hearings on the issue this summer and may introduce new legislation this year.
Genentech Chief Executive Robert A. Swanson visited Washington last month to press for legislation that would allow export of unapproved new drugs to Japan, Australia, Canada and nine European nations, if the drugs are approved for use in those countries.
Swanson says Genentech does not want to dump unsafe drugs on other countries. But it does want to press ahead with products that it expects to be approved eventually under the more lengthy regulatory review process of the United States. He argues that that time lag gives foreign companies an important advantage in introducing new products in overseas markets. Those product sales, in turn, will enable foreign companies to "invest in further research and cost reduction with a view to exporting their products to the United States," he said.
"While we don't want to change our high standards, it is clear that there needs to be better understanding of how regulatory delays can affect our country's international competitiveness," Swanson said.
The industry has other items on its lobbying agenda that it says are keys to its future.
"If we are to maintain our lead, we must act quickly to address a number of critical issues such as continued tax incentives for research and capital formation, timely review of patent and new drug applications, well-informed export policies, and increased funding for process technology and generic applied research," Swanson said.