Copyright 1999 The Chronicle Publishing Co.
The San
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APRIL 5, 1999, MONDAY, FINAL EDITION
SECTION: BUSINESS; Pg. E1; BIOSCOPE
LENGTH: 1061 words
HEADLINE:
Should Vaccine Research for HIV Merit a Corporate Tax Break?;
Pelosi-sponsored bill may wind up being a Pandora's pork barrel
BYLINE: TOM ABATE
BODY:
An
ounce of prevention is worth a pound of cure, the saying goes.
Unfortunately, the drug industry works on the opposite logic.
When deciding where to invest their research cash, drug execs know they
can get the best returns by developing remedies that require patients to take
regular pills or injections.
By contrast, it makes far less economic
sense for them to develop new vaccines -- which are inherently one-shot deals --
even though society might benefit more from such preventive measures.
To
give drug and biotech firms a greater incentive to develop vaccines,
Congresswoman Nancy Pelosi, D-San Francisco, recently introduced a bill that
would provide a 30 percent tax credit for efforts to ward off diseases that kill
more than 1 million people a year worldwide. The only ones that qualify,
according to her staff, are HIV, tuberculosis and malaria.
Currently,
all companies are eligible for a 20 percent R&D tax credit, regardless of
whether they're designing better mousetraps, faster computers or life-saving
drugs.
Pelosi's proposal would increase this credit by 50 percent for
research on these specified vaccines. It also would allow companies that lose
money -- as do most biotech startups -- to pass some of the credit through to
their investors. This presumably would attract more investors, who could apply
the write-off to their own corporate taxes.
Pelosi's bill, The
Lifesaving Vaccine Technology Act, is supported by the AIDS Vaccine Advocacy
Coalition, the International AIDS Vaccine Coalition and the Global Health
Council among others. Senator John Kerry, D-Mass., is poised to introduce
companion legislation in the Senate.
Pelosi's idea has obvious merit --
and drawbacks. The notion of rewarding prevention makes eminent sense. But this
break is narrowly targeted to just three diseases. And one of those three, HIV,
already received millions in direct government support last year.
A new
tax break might, as Pelosi hopes, motivate private firms to begin TB and malaria
vaccine programs, which they haven't done so far. But the only immediate
beneficiaries of Pelosi's proposal would be the four corporations already
developing HIV vaccines. They include VaxGen, a biotech startup in South San
Francisco, and Chiron, the biotech giant in Emeryville.
As members of
Congress weigh Pelosi's measure, they will have to ask whether she is opening a
Pandora's pork barrel.
Don Rath, tax director at Chiron, said expanded
tax credits for specific R&D projects "would be a novelty."
But
probably not for long. If one interest group, in this case the AIDS lobby, wins
a sweeter R&D tax credit, other constituencies surely will make impassioned
pleas for their own research causes.
-- Inoculate this: Still,
vaccination seems to be in the air in Washington, D.C. While Pelosi was floating
her tax-credit bill, the Institute of Medicine, part of the National Academy of
Sciences, was finishing a three-year study on the economics of the U.S. vaccine
business.
The full report should be up on the Academy's Web site today
(www.nas.edu). But Dr. Robert Lawrence, a professor at Johns Hopkins University
and chairman of the vaccine study group, briefed me on its findings.
First, a bit about the study group. Ever since 1863, when President
Lincoln established the Academy, small teams of NAS scientists have volunteered
their time to study topics of public interest.
Lawrence's group had a
specific charge: to look at the infectious diseases that afflict Americans; to
assess how much it might cost -- and how long it might take -- to develop a
vaccine against each infection; and then to calculate where private companies
and U.S. society would get the most bang for every buck invested in vaccine
research.
After evaluating hundreds of vaccine candidates, the NAS
committee ranked them into four groups, from most cost-effective to most
expensive, in terms of lives saved per dollar invested in research.
Alas, Lawrence's list bears no resemblance to Pelosi's vaccine
favorites. The NAS recommends some fairly pedestrian efforts, such as
development of a multiyear flu vaccine aimed at kids. It not only would keep
kids healthy and prevent parents from losing time at work, a new flu shot also
would stop kids from infecting their grandparents, for whom the flu can be
deadly.
How could Pelosi and the NAS be on opposite pages of the vaccine
book? The NAS panel, you see, was ordered to focus on infections that kill
Americans. Malaria and TB, though deadly in the Third World, fell beyond this
purview. The panel excluded an AIDS vaccine from their list because it already
was receiving so much government research support, Lawrence said.
Pelosi, on the other hand, focused entirely on diseases that are big
international killers. And she does represent San Francisco, where AIDS looms as
public health enemy No. 1.
If Pelosi and the NAS committee joined
forces, they'd have a stronger argument for a bill to spur development of a wide
range of vaccines.
The moral being, perhaps, that an an ounce of
investment in vaccine research should be worth a ton of
tax credit.
THE REST OF THE STORY: San Francisco
attorney Gary Gray was mystified by one line in my column last week about DNA
"fingerprints." I mentioned how DNA tests are used to identify victims whose
bodies were burned beyond recognition.
Gray could understand how
forensics experts might extract DNA samples from charred remains. But where
would they get a genetic sample from a "missing and presumed dead" person for
comparison?
My genetic forensics expert, Sean Walsh of Perkin-Elmer
Corp. in Foster City, said it's a cinch -- provided that investigators have a
hunch as to the victim's identity.
In such a case, they look for a comb,
toothbrush or other personal item that can yield a hair follicle or saliva
residue -- enough DNA to make a positive match against the sample from the
victim's body.
Walsh said this technique was used to identify bodies
charred beyond recognition in the TWA flight 800 disaster.
But if
investigators came across a burned corpse and had no clue as to its identity,
well, then DNA tests wouldn't be of much help.
Look for BioScope every
Monday in the Business section. Send your bio-feedback to Tom Abate by e-mail,
abate@sfgate.com; fax, (415) 543-2482; or phone, (415) 777-6213.
LOAD-DATE: April 5, 1999
