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.
"Companies would be hesitant to develop something if they didn't know what was at the end of the rainbow," Fauci said. "If you deliver the product, we will guarantee you get money."
Dozens of companies backed the new program. But, executives say, Bioshield doesn't remove all the uncertainties of developing the drugs. They complain that it does not offer complete liability protection should a drug have adverse effects on patients or fail to protect them against a pathogen, which could lead to lawsuits. It also doesn't eliminate the chance that another company will develop a better product that the government wants more.
Few companies have shown much enthusiasm for diverting staff and money from programs to develop drugs, such as cancer and cholesterol treatments, with bigger and more established markets. Of about 1,000 U.S. biotechnology companies, about 100 are working on biodefense projects, according to the Biotechnology Industry Organization, an industry trade group.
Human Genome Sciences' anthrax treatment is being tested for safety in humans. But because it would be unethical to expose people to deadly pathogens, it cannot be tested for effectiveness. Companies can't know if a drug can protect people from a given biological agent until after an attack.
"Until the liability question is solved, we're not going to see big drug companies come to the table," said Frank M. Rapoport, who represents vaccine maker Aventis Pasteur SA. "They have too much to lose."
Other Washington companies working in biodefense say Bioshield is unlikely to substantially alter their business plans.
Two of them, Dynport Vaccine Co. of Frederick and GenVec Corp. of Gaithersburg, are working on vaccines for the military and said they are exploring the possibility of applying for Bioshield money.
Cambrex Corp. of East Rutherford, N.J., which has offices in Baltimore and Walkersville, Md., and Invitrogen Corp. of Carlsbad, Calif., which this year bought BioReliance Corp. of Rockville, perform contract testing and manufacturing services for companies in biodefense. Both expect new clients as smaller biotechnology companies, with limited space and staff, apply for Bioshield funding.
Still, C. Robert Eaton, president of MdBio Inc., a Maryland trade group for biotechnology companies, said, "I don't think companies are going to turn on a dime to start chasing this money."
Congress rejected industry efforts to include in the Bioshield bill stronger incentives such as research and development tax credits, the extension of existing patents and stronger liability protection.
But Fauci said he expects Congress to address the industry's biggest concerns, such as liability. "Bioshield does not solve all the disincentives a company may have to get involved," he said. "But it's a very good start."