Uncertain Outlook for U.S. Vaccine Bill

Despite increased support for AIDS vaccines from the White House and Congress, legislative action this year appears unlikely.
by Allison F. Bauer

Notwithstanding growing support from the Clinton Administration and an increasing number of legislators and public health advocates, legislation that includes specific proposals to encourage industry investment in AIDS vaccine development may be stalled for this year.

The "Vaccines for the New Millennium Act of 2000," introduced by Senators John Kerry (Democrat of Massachusetts) and Bill Frist (Republican of Tennessee) and by Representative Nancy Pelosi (Democrat of California), progressed through the 106th Congress, but further progress during this session is uncertain.

Access and other Non-Tax Credit Provisions
The non-tax credit provisions of the bill, including the creation of a Lifesaving Vaccine Purchase Fund and authorization for contributions to the Global Alliance for Vaccines and Immunizations (GAVI) and to IAVI have been incorporated into the "Technical Assistance, Trade Promotion, and Anti-Corruption Act of 2000". This legislation, under the jurisdiction of the Senate Foreign Relations Committee, is a compilation of many smaller internationally focused bills. The entire bill was approved by a voice vote of the committee in late March.

According to reports, Sen. Phil Gramm (Republican of Texas), chairman of the Banking Committee, has placed a "hold" on the bill. The bill was passed out of the Foreign Relations Committee but the Banking Committee, which has jurisdiction over unrelated non-AIDS provisions of the legislation, now wants to hold its own hearings. Notwithstanding the delay on the authorization side, the Senate Foreign Operations Appropriations Subcommittee approved a US$50 million appropriation for the Global Alliance for Vaccines and Immunizations (GAVI) on 10 May. No appropriation was included for either IAVI or the vaccine purchase fund.

R&D Tax Credit Provisions
The tax credit portion of the vaccine legislation, if passed, would provide research and development tax credits for pre-clinical and clinical research and development (R&D) costs for vaccines against AIDS, malaria, and TB, and any other infectious disease that causes over one million deaths annually. As originally introduced, the bill provides a tax credit for R&D costs for these priority vaccines. (The Senate bill provides a 50% credit on increased R&D for these vaccines; the House bill would provide 30% credit on all qualified R&D on the priority vaccines.) Supporters hoped that the tax credit provisions would be included in the Africa-Caribbean Basin Initiative Trade Bill, but conferees opted not to do so and the compromise bill, without the provisions, was approved by both the House and Senate.

According to one legislative staff member, the tax credit failed to become part of the Africa bill for a number of reasons. Industry was not actively working to support and secure the tax credit, with only two companies, American Home Products (the parent company of Wyeth Lederle Vaccines) and SmithKline Beecham Biologicals, vigorously pushing for its inclusion. "It is nearly impossible to give a tax credit to industry when the companies are lukewarm about getting it," said the staffer. And, in the view of this influential legislative aide, the Clinton Administration could have been more helpful. "They were supporting one version of the credit while key congressional staff was pushing for another. If a tax credit is going to be passed, the groups advocating for it need to be working together rather than on opposing sides." It is unclear whether there will be other opportunities to include the R&D tax credits on alternative legislation this year.

Compulsory Licensing and Parallel Importing Provisions
A provision sponsored by Senators Dianne Feinstein (Democrat of California) and Russ Feingold (Democrat of Wisconsin) that would have guaranteed access to inexpensive generic AIDS drugs for African countries was also excluded from the Africa-Caribbean Basin Initiative trade bill. This amendment called for relaxing intellectual property standards to allow countries to import or manufacture cheaper versions of anti-AIDS drugs patented by U.S. pharmaceutical companies. The companies opposed this language, warning that it would set a dangerous precedent. They argued that the availability of drugs in Africa has less to do with pricing and more about the lack of infrastructure to deliver the drugs and the failure of some African governments to develop comprehensive AIDS programs.

Tempers flared in the House chambers as police detained protestors from ACT-UP after they twice interrupted a vote on the Africa-Caribbean Basin Initiative trade bill on 4 May.

After the trade bill passed the House easily, Sen. Feinstein urged the White House to issue an executive order to carry out her HIV/AIDS initiative. She did not have to wait long for President Clinton to act: he signed an Executive Order on 10 May that for the first time allows developing countries to import and manufacture cheaper version's of the world's most effective AIDS drugs without fear of punishment from U.S. trade authorities. The following day the Senate, too, easily passed the trade bill.

European Proposals Being Considered
The European Commission is also examining the possibility of using tax credits to spur private sector investment in AIDS vaccines. But observers believe that such credits are more likely to be part of a broader plan designed to stimulate vaccine development, which will be proposed by the European Commission to Parliament and Council in the coming months. In terms of tax credits for vaccine development, one key question still needing clarification is whether such programs can be instituted, given European investment and competition.