White House launches initiatives to spur biotech innovation, receives input from stakeholders on National Bioeconomy Blueprint

On September 16, 2011, the same day that President Obama signed the America Invents Act, the White House released the following inititatives which it hopes will "move ideas from the lab to market":

Launch of new National Institutes of Health (NIH) center to assist biotech entrepreneurs: To help industry shorten the time needed and reduce costs for the development of new drugs and diagnostics, the NIH plans to establish a new National Center for Advancing Translational Sciences (NCATS). NCATS aims to help biomedical entrepreneurs by identifying barriers to progress and providing science-based solutions to reduce costs and the time required to develop new drugs and diagnostics. For example, as one of its initial activities, NCATS will partner with DARPA to support development of a chip to screen for safe and effective drugs far more swiftly and efficiently than current methods.

Development of a National Bioeconomy Blueprint: By January 2012, the Administration will develop a Bioeconomy Blueprint detailing Administration-wide steps to harness biological research innovations to address national challenges in health, food, energy, and the environment. Biological research lays the foundation of a significant portion of our economy. By better leveraging our national investments in biological research and development the Administration will grow the jobs of the future and improve the lives of all Americans. The Blueprint will focus on reforms to speed up commercialization and open new markets, strategic R&D investments to accelerate innovation, regulatory reforms to reduce unnecessary burdens on innovators, enhanced workforce training to develop the next generation of scientists and engineers, and the development of public-private partnerships. 

University Presidents Commit to Commercialization Initiative: In coordination with the Administration, the Association of American Universities, and the Association of Public and Land-grant Universities, 135 university leaders committed to working more closely with industry, investors, and agencies to bolster entrepreneurship, encourage university-industry collaboration, and enhance economic development. Today, over 40 universities are answering the President’s call to expand their commercialization programs and goals. These institutions include The Georgia Institute of Technology, which has outlined its expanded initiatives, as well as universities like the University of Virginia and Carnegie Mellon University, which are announcing plans today. 

Coulter Foundation and NSF Launch a University Commercialization Prize with AAAS: This prize competition will be used to identify and promote incentives to adopt best practices that improve university commercialization efforts. Supported by $400,000 in funding from the Wallace H. Coulter Foundation and NSF, the American Association for the Advancement of Science (AAAS) will lead the design and implementation of the prize in coordination with a diverse array of partner agencies, foundations, and organizations. 

Developing University Endowments Focused on Lab to Market Innovations: Today, the Coulter Foundation is announcing that they have selected four new universities to participate in their Translational Research Partnership program -- Johns Hopkins University, University of Louisville, University of Missouri and University of Pittsburgh. As part of the program, each university will create a $20 million endowment to foster research collaboration between biomedical engineers and clinicians, with the goal of developing new technologies to improve patient care and human health. Translational research moves new ideas and discoveries from university laboratories to new products and services that directly impact human health, often by creating startups or by partnering with established businesses. 

New Tools and License Agreements for Start-Ups and Small Businesses: The National Institutes of Health (NIH) Office of Technology Transfer has developed new agreements for start-up companies obtain licenses for early-stage biomedical inventions developed by intramural researchers at NIH or FDA. Companies that are less than 5 years old and have fewer than 50 employees will be eligible to use the new, short-term exclusive Start-Up Evaluation License Agreement and the new Start-Up Commercial License Agreement. These agreements allow a start-up company to take ideas sitting on the shelf, and attract additional investments to develop these NIH and FDA inventions into life-saving products. 

New Help for Small Businesses: In addition, the USPTO, in collaboration with NSF and SBA, will pilot a program to assist SBIR grant recipients in taking advantage of the USPTO’s small business programs and resources. The USPTO pilot will provide comprehensive IP support to, initially, 100 NSF SBIR grant recipients to take advantage of accelerated examination and benefits stemming from the America Invents Act and will engage external stakeholders to provide pro bono or low cost IP services to awardees.

BIO applauded the effort, saying it will support biotech research and development.

The Office of Science and Technology Policy (OSTP) at the White House issued a Request for Information soliciting input from interested parties on ways to develop the National Bioeconomy Blueprint. Between October 7 and December 6 of this year, OSTP received 134 submissions in response to the RFI.

Ninth Circuit okays sale of some blood stem cells despite National Organ Transplant Act

In an opinion filed on December 1, 2011, the Ninth Circuit held that the National Organ Transplant Act (NOTA) does not prohibit compensation for blood stem cells obtained through a procedure known as peripheral apheresis because it does not involve actually taking bone marrow from the donor.

The plaintiffs in this case include parents of sick children who have diseases such as leukemia, a physician and medical school professor, a parent of mixed race children for whom it is very rare to find matching donors, an African-American man suffering from leukemia, and a California non-profit organization seeking to operate a program incentivizing bone marrow donations through its website called MoreMarrowDonors.org. They challenged the constitutionality of NOTA's ban on compensation for bone marrow donations. Specifically, they argued that cells extracted through "peripheral blood stem cell apheresis," a relatively new method that avoids the need to invade the donor's bone for marrow, should not be prohibited.


Blood stem cells, also known as hematopoeitic stem cells, are non-pulripotent stem cells which can differentiate into white blood cells, red blood cells, and platelets. 


The older method consisted of extracting bone marrow from the donor by inserting long needles into the donor's hip bones. This transplantation by "aspiration" is painful, involves risks, and requires the hopitalization of the donor. 


The complaint explained that peripheral blood stem cell apheresis, which was developed after the enactment of NOTA, avoids the difficulty, pain, and potential risks associated with transplantation by aspiration.

While most blood stem cells mature into blood cells in the bone marrow, some circulate in the bloodstream before they mature, in which case they are referred to as "peripheral" blood stem cells. The new transplantation technique injects the donor with a medication to increase blood stream cell production and then extracts blood from the donor's veins without sedatives or anesthesia. Next, blood is filtered in an apheresis machine to separate stem cells from mature blood cells which are returned to the donor's blood stream. Complications are exceedingly rare and the extracted stem cells are replaced by the donor's bone marrow in three to six weeks. To a large extent, peripeheral stem cell apheresis is very similar to an ordinary blood donation.

Unlike mature blood cells which exist in just four types, there are millions of blood stem cell types, making it very difficult to find matching donors.

The plaintiff nonprofit would like to mitigate the matching problem by providing financial incentives to donors in the form of scholarships, housing allowances, or gifts to charities of the donor's choice. It plans to focus initially on minorities and mixed race donors because their blood stem cells are rarer.

However, the government's position has been that NOTA prohibits compensation for all blood stem cell donations.

NOTA makes it a crime punishable by up to five years in prison "for any person to knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce." 42 U.S.C section 274e(a).  It defines a human organ as "the human kidney, liver, heart, pancreas, bone marrow, cornea, eye, bone, and skin, and any other human organ specified by the Secretary of Health and Human Services by regulation." 42 U.S.C. section 274e(c).

The plaintiffs argued that NOTA, as applied to MoreMarrowDonors.org, violates the Equal Protection Clause because there is no rational basis supporting the differential treatment of blood stem cells on the one hand, and blood, sperm, and eggs, on the other. (NOTA does not prohibit compensation blood, sperm, or egg donations.) They pointed out that, like blood, sperm, and egg donors, blood stem cells donors undergoing peripheral apheresis suffer no permanent harm, experience no significant risks, and quickly regenerate what is donated.

The district court dismissed for failure to state a claim upon which relief may be granted.

On appeal, the government reiterated that compensation for blood stem cell donations is prohibited because NOTA classifies "bone marrow" as an organ under 42 U.S.C. section 274e(c)(1).

The court first discussed bone marrow transplants by aspiration because the plaintiffs' complaint appeared to argue that all prohibitions on compensation for bone marrow transplants are unconstitutional. It held that the plaintiffs' challenge must fail with respect to the old aspiration method.

The court rejected a distinction based on the human tissue's capacity to regenerate. The distinction, it explained, cannot be sustained because Congress chose to include liver in NOTA's definition for "human organ" even though it must have known that human livers are capable of regenerating.  

As to the question of whether there was a rational basis for prohibting compensation for the transplantation of certain human tissues and not others, the court identified two considerations. First, Congress could have been concerned about the policy implications in so far as compensation could produce a situation where poor people are pressured into selling their organs to rich patients. Compensation could also lead, the court said, to a degradation in the quality of organ supply if donors lied about their medical histories in order to make their organs more marketable.

Second, Congress also could have been swayed by philosophical reasons such as the widespread revulsion against the commodification of human flesh.

In sum, Congress had a rational basis for making only certain human tissue donations compensable.

The court then turned to bone marrow transplants through apheresis. Here, the court sidestepped the constitutional issue by focusing instead on statutory interpretation. (Under the doctrine of constitutional avoidance, courts try to resolve cases on non-constitutional grounds whenever possible.) It explained that NOTA did not prohibit blood stem cell donations through the apheresis method because "none of the soft, fatty marrow is donated, just cells found outside the marrow, outside the bones, flowing through the veins."

On this point, the government's argument was that NOTA's prohibition applies because blood stem cells should be treated as a subpart of "bone marrow" and because NOTA not only prohibits compensation for trasnplant of an organ, but aslo "any subpart thereof." The court rejected this argument because if accepted it would have also prohibited compensation for ordinary blood donations since mature blood cells are also "subparts" of bone marrow.

The court added that the government's argument went against the ordinary meaning of "bone marrow." Blood stem cells are subparts of blood, not bone marrow because "the word 'subpart' refers to the organ from which the material is taken, not the organ in which it was created."

Thus, because it does not prohibit compensation for blood donations and the substances in it, NOTA does not prohibit compensation for blood stem cell aphoresis.

Writing for the New England Journal of Medicine, Harvard University assistant law professor Glenn Cohen says the Ninth Circuit's decision represents both a win and a loss for advocates of organ markets. Although patients will now be able to buy and sell peripheral-blood stem cells derived through aphoresis, Congress may at any time amend NOTA and put an end to the practice because the Ninth Circuit's ruling was based on statutory interpretation.

Gene patents won't impede whole genome sequencing, law professor says

In a working draft titled "Will Gene Patents Impede Whole Genome Sequencing?: Deconstructing the Myth that 20% of the Human Genome Is Patented," University of Missouri associate professor of law Christopher Holman argues that the fear that gene patents will have a substantial negative effect on genetic testing is unfounded.

Holman takes as a backdrop to his discussion the case of Association for Molecular Pathology v. PTO where, during oral arguments at the Federal Circuit, Judge Bryson asked the patentee's attorney whether the patent would be infringed by the sequencing of an individual's genome. Underlying that concern was the widespread belief that 20% of the human genome is patented, which Holman traces to a study by Jensen and Murray published in 2005. Holman deconstructs that study and explains that there is no evidence supporting its conclusion.

The Jensen and Murrary study, Holman points out, was not based on patents claiming human genes. Rather, it considered issued US patent in which a human gene sequence, or the protein enoded by a human gene sequence, was merely mentioned.

Upon reviewing a random group of the gene patents used in the Jensen and Murray study (533 out of 4270), Jensen found that many would not be infringed by DNA sequencing and few, if any, include "claims that a court would necessarily find valid and infringed by all forms of DNA sequencing."

Holman explains that patent claims covering isolated forms of DNA molecules are unlikely to be construed broadly because if they were, they would facilitate invalidity attacks based on the novelty, written description, or enablement requirement.

In addition, sequencing may avoid infringement based on the differences between cDNA and genomic DNA. Most gene patents are based on the isolation and sequencing of cDNA. Genomic DNA, however, contains introns which would be present when a genome is sequenced thereby avoiding infringement.

DNA sequencing technology also usually avoids infringement because it does not involve isolating the full-length gene. Rather, only fragments of the full-length gene are physically sequenced and then pieced together.

Holman concludes that the Jensen and Murray study provides no basis to infer that 20%, or any defined percent of human genes, are covered by patents that would be infringed in the course of gene sequencing.

CRS report discusses role of trade secret law in innovation policy

Primarily a creature of state law, a trade secret refers to commercially valuable information the owner of which has taken reasonable efforts to keep secret. The misappriopriation of trade secrets is a tort and may result in compensatory and punitive damages. Common examples of trade secrets include, chemical formulae, manufacturing techniques, customer lists, marketing strategies, and sales techniques.

The value of trade secrets owned by publicly traded US companies has been estimated at five trillion dollars.

A Congressional Research Service (CRS) report from last year notes that the rise of computer technology has made it more difficult for owners to maintain the confidentiality of their proprietary information. Today, the United States is the main target of foreign economic and industrial espionage. In fact, the Office of the National Counterintelligence Executive, in a report titled Foreign Spies Stealing US Economic Secrets in Cyberspace, accuses China and Russia of engaging in online espionage against the United States for economic advantage.

Trade secrets and patents form alternative types of intellectual property. As the report points out, an inventor must decide whether to keep the invention as trade secret, obtain a patent, or disclose and allow it to enter the public domain. One factor influencing this decision is whether the technology can be copied easily in which case it cannot be kept secret, and hence not the proper subject of a trade secret. Other factors include the costs associated with obtaining and maintaining a patent, the time required to obtain a patent, and the limited duration of patent rights.

More generally, trade secret protection implicates competing policy considerations. The report explains,

The availability of legal protection for trade secrets potentially promotes innovation, encourages firms to invest in employee development, and confirms standards of commercial ethics and morality. On the other hand, trade secret protection involves the suppression of information, which may hinder competition and the proper functioning of the marketplace. An overly robust trade secret law also could restrain employee mobility and promote investment in costly, but socially inefficient security measures.

Congress has legislated on trade secrets to a limited extent only. A federal statute enacted in 1996, the Economic Espionage Act, makes it a crime to misappropriate a trade secret under certain circumstances.

On the question of the federalization of trade secret law, the report cites arguments in favor for and against. Arguing in favor, some commentators point out that some state trade secrets laws place the United States in violation of its obligations under the NAFTA and TRIPS agreements which call on their member states to provide certain levels of trade secret protection. Those against the enactment of a federal trade secret law contend that it raises federalism concerns and might create additional, unnecessary burdens and costs on the federal judiciary.

Obama proposes plan to ban pay-for-delay agreements, cut exclusivity period for biologics to 7 years

Noting the spiraling costs of health care ($2.6 trillion in 2010, or 17.6 percent of US GDP) and the pressing need to reduce the national deficit, the Obama Administration recently submitted a Plan for Economic Growth and Deficit Reduction (the Plan) that seeks to cut federal spending on health care.

The Plan mainly takes aim at the Medicare and Medicaid programs but also calls for significant regulatory changes in the pharmaceutical and biotech industries. It proposes a prohibition on "pay-for-delay" agreements and a reduction of the exclusivity period for generic biologics from 12 to 7 years.

Prohibition on "pay-for-delay" agreements

The Plan seeks to increase the availability of generic drugs and biologics by granting the Federal Trade Commission (FTC) the power to prevent companies from entering into so-called "pay-for-delay" agreements. "Pay-for-delay" agreements refer to deals in which brand-name pharmaceutical and biotech companies pay generic competitors to delay the entry of their products onto the market for a certain period of time.

In support, the Administration cites a 2010 FTC study finding that "pay-for-delay" agreements delayed entry of a generic by 17 months on average and cost American consumers as much as $3.5 billion per year.

Under the Hatch-Waxman Act, a generic competitor can obtain FDA approval to market its generic drug before the expiration of a brand-name company's patents provided that the generic competitor can show that its product does not infringe the relevant patents or that the relevant patents are invalid. In patent litigation lawsuits brought against generic competitors, brand-name companies attempt to prevent FDA approval of the generic by arguing that it would infringe their patents. A 2002 FTC study, however, showed that in 73 percent of such cases, courts ruled in favor of generics. Given the costs and uncertainty of litigation, brand-name companies often prefer to settle with the competitor in exchange for delaying entry of the generic onto the market.

In light of the antitrust issues presented, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) requiring pharmaceutical companies to file certain agreements with the FTC and the Department of Justice within ten days of their execution.

The FTC's 2010 study is based on the agreements filed between 2004 and 2009. During that period, 66 agreements involved some form of compensation from the brand to the generic company combined with a delay in generic entry. Out of these, 51 (77 percent) were between the brand pharmaceutical company and the generic company that was the first to seek entry prior to patent expiration for the relevant brand-name drug. Settlements with first-filers delays the entry of all generics because other generic competitors cannot enter until the first-filer's product has been marketed for 180 days.

The 2010 study also points out that in 2003, the Sixth Circuit held such agreements to be per se illegal in Cardizem CD Antitrust Litigation, 332 F.3d 896, but the Second, Sixth, and Federal Circuits subsequently have upheld them.

Many of these agreements are still in effect. Together they protect at least $20 billion in sales of brand-name pharmaceuticals from generic competition.

The study concluded:

Given the magnitude of consumer harm from pay-for-delay settlements - an estimated $35 billion over the next ten years - a legislative solution offers the quickest and clearest way to deter these agreements and obtain the benefits of generic competition for consumers. 

It should be noted that the study was based only on pharmaceuticals because prior to the Biologics Price Competition Act (BPCA) that was passed as part of the Affordable Care Act of 2010, there was no mechanism for biologics to obtain FDA approval as generic-type products based on brand-name reference biologics. (Under the BPCA, a generic-type biologic is called a "follow-on" biologic.) Modeled after the Hatch-Waxman Act, the BPCA provides such a mechanism by creating an abbreviated approval pathway for a follow-on biologic provided that it can be shown to be "biosimilar" to or "interchangeable" with an FDA-licensed reference biologic.

Presumably, the Administration's position is that a prohibition of "pay-for-delay" agreements would also benefit consumers by promoting competition in the biologics market.

Exclusivity period

Like the Hatch-Waxman Act, the BPCA defines an exclusivity period during which a brand-name biologic is protected from competition. During that period, a competitor may not seek approval of its product based on the clinical and non-clinical data generated by the brand-name manufacturer. Faced with the high costs of producing original data, competitors are dissuaded from entering the market altogether. The BPCA sets the exclusivity period at twelve years. This period is significantly longer than the one provided to pharmaceuticals, which the Hatch-Waxman Act sets at 5 years.

In the Plan, the Administration seeks to reduce the exclusivity period to seven years believing that it "will encourage faster development of generic biologics while retaining appropriate incentives for research and development." In addition, the Plan would prohibit "evergreening"; the process through which brand-name manufacturers are awarded additional exclusivity periods based on minor changes in product formulation. The Administration says that the proposal will result in $3.5 billion in savings over 10 years.

Prior to the enactment of the BPCA, a lively debate took place as to the appropriate duration of the FDA period of data exclusivity for biologics. The Obama Administration argued that 7 years was sufficient but Congress ultimately went with 12. The reason for providing biologics with a significantly longer period of data exclusivity than pharmacauticals was based on the assumption that the patent system was not sufficiently protective of biotechnology innovations and, as a result, did not provide time for innovators to recoup their substantial expenditures in research and development.

Industry response

Unsurprisingly, the pharma and biotech industries have voiced their strong opposition to the measures proposed in the Plan.

Seeking Alpha reported that Jim Greenwood, CEO of the Biotechnology Industry Organization, the world's largest biotech organization, said, "A reduction of the exclusivity period will jeopardize the careful balance established in the biosimilars pathway to reduce costs, ensure patient safety, and encourage continued biotechnology innovation."

PhRMA, which represents leading US pharmaceutical research and biotech companies, also criticized the President's Plan stating that "reducing the 12 years of data protection that was approved in strong, bipartisan votes by Congress ... would seriously jeopardize innovative companies' ability to fund research on future treatments and cures. If the proposal were successful, the U.S. would then provide less data protection for new, innovative biologics that is currently bestowed in Europe."

Intense lobbying surrounding AIA highlights importance of changes to US patent system, report shows

Last September, President Obama signed into law the America Invents Act (AIA), a law that will bring about significant change in the US patent system for the first time in sixty years.

First Street Research Group, an organization that studies the forces influencing policy in Washington, recently released a report on the relationships and lobbying spending that surrounded the passage and implementation of the AIA.

The report shows that some 300 organizations lobbied the Act, both in the Senate and House. Together, these organizations spent over $400 million on all of their lobbying activity in 2011, an amount which suggests that an important segment of the entire lobbying industry was mobilized for the AIA. In fact, the Center for Responsive Politics, a non-profit research group, has valued the lobbying industry at $3.51 billion in 2010.

Over 1000 individual lobbyists lobbied the AIA, eleven of whom are former members of Congress. The top five organizations that lobbied the Act based on the number of lobbyists who lobbied the Act were: Independent Community Bankers of America, Security Industry and Financial Markets Association, AT&T, Yahoo!, Hewlett-Packard, and Research in Motion.

Rep. Schwartz (D-PA) calls on Congress to extend biotech tax credit

Last month, Rep. Allyson Schwartz, a sernior member of the House Budget Committee, said Congress should extend the biotech tax credit to stimulate the industry in an opinion piece published in Politico.

Rep. Shwartz was referring to the H.R. 1988, the Qualifying Therapeutic Discovery Project Tax Credit Exentsion Act of 2011, which she is co-sponsoring with Rep. Susan Davis (D-CA). The bill was introduced on May 25, 2011, and seeks to "amend the Internal Revenue Code to extend for an additional five-year period the authority to invest in and allocate credit amounts for a qualifying therapeutic discovery project."

She pointed out that the Therapeutic Tax Credit of 2009 made $1 billion available for some 3,000 small biotech and bioscience companies in 47 states through tax credits and grants, and as a result contributed to growth in the biotech sector over the past year. The original law authrorizing the tax credit was effective for two years only.

If passed, the bill would provide an additional $1 billion dollars to biotech and bioscience companies with fewer than 250 employees through 2017.

Advances in DNA technology hold great promises and... threats

DNA sequencing technology has come a long way since the Human Genome Project (HGP) was completed in 2000. HGP was a decade-long international research effort that decoded the first human genome and cost a whopping $1 billion dollars. Today, anyone's DNA can be sequenced for a few thousand dollars, and this figure is expected to go down significantly in the next few years.


Cheap DNA sequencing holds great promises because, among other things, it will make personalized medicine possible. Based on a unique DNA sequence, scientists will be able to determine the molecular bases of a patient's condition and, consequently, design extremely efficient biotech drugs.

In fact, scientists are now able to "write" DNA from scratch. Using this technology, bacteria will be synthesized such that they produce patient-specific drugs.

Yet, as Vivek Wahwa points out in the Washington Post, these advances in genomics can also be used for nefarious ends. Bio-toxins intended to infect a certain person or a group of people could be nearly impossible to detect precisely because of their specificity.

WIPO launches new consortium offering IP for fight against tropical diseases

In a new effort to combat neglected tropical diseases, the World Intellectual Property Organization (WIPO) recently announced the formation of a new consortium of private and public institutions called WIPO Re:Search. The consortium was established to facilitate the exchange of IP with researchers working on neglected tropical diseases, including malaria and tuberculosis.

WIPO Re:Search brings together large pharmaceutical companies like Pfizer and prominent research institutions. It makes certain IP assets of its participants available to researchers anywhere in the world under royalty-free licenses provided that the researchers work on neglected tropical diseases.

It is estimated that neglected tropical diseases negatively affect the lives of a billion people worldwide.

Provisions of the America Invents Act taking immediate effect

In an ABA-IP Section legislative update, Hayden Gregory listed the provisions of the America Invents Act taking immediate effect upon signing. President Obama signed into law H.R. 1249, the "Leahy-Smith America Invents Act," on September 16, 2011. The overall effective date of the Act is September 16, 2012. Certain provisions, however, will take immediate effect. They include:

- authority of the Director to set or adjust fees.
- ban on tax strategy patents
- ban on patenting human organisms
- reform of false marking of patents
- virtual marking
- changes to best mode
- changes to prior user defense
- standards for ex parte reexamination
- change in venue from D.C. District Court to E.D. Virginia for various patent and trademark actions
- clarification of filing deadline for applications for Hatch-Waxman patent term extension
- exclusive jurisdiction of Federal Circuit of Appeals cases with compulsory claims
- limitations on joinder of infringement defendants
- changes in statute of limitations for USPTO disciplinary actions.

Big Pharma relying on deals with small biotech firms in the wake of financial crisis

Large drug companies like Roche are increasingly making deals with smaller biotech developers to diversify their research projects. As a result of the economic crisis, small biotech firms have seen a significant decrease in funding from private equity, hedge funds, and venture capitalists. Roche's shares outperformed the sector this year due in part to collaboration with US biotech Plexxikon.

Bitech sector seen as recession proof

Market Watch reports that while Big Pharma is losing jobs, small biotech companies are growing. Employment in US biotech increased by 0.2 % between 2007 and 2009 to 1.36 million jobs. The resilience of the biotech sector is attributed to the fact that people continue to buy medications, even in times of economic difficulty.

PhRMA supports new legislation designed to combat online piracy

Congress is considering new legislation that would give the Department of Justice the power to shut down websites that host pirated material. The legislation would also provide copyright holders the ability to obtain injunctions against internet companies that aid in copyright infringement.

Critics say the legislation will punish search engines that link to pirated content and, as a result, negatively impact innovation on the internet.

Hollywood music companies and movies studios are pushing for the legislation, whereas Silicon Valley giants Google, Facebook, Ebay and Yahoo say it threatens free speech and would destabilize technology on the internet.

Representative Anna Eshoo, who represents the Silicon Valley, says that an epic battle is being waged.

The LA Times reports the U.S. Chamber of Commerce and the Pharmaceutical Manufacturers Association (PhRMA) support the legislation because it will protect against counterfeit drugs and safeguard prescription drugs. PhRMA says it represents the country's leading pharmaceutical research and biotechnology companies.