While the biotechnology sector and ETFs are rocking the performance charts, an old issue is once again on the table in Washington: patent reform. If it finally comes through, it could mean big things.
The biotech industry got a boost from the health care bill, but now there are new issues to face down. Biotech heads by the hundreds are meeting in Washington this week to lobby for the sector as a patent reform bill appears on the table. Kerry Grens for MarketPlace reports that the bill could strengthen biotechnology’s position as patent holders, giving them more protection when other companies come too close to their products.
This bill would decrease the time period to oppose a patent and make it more difficult to invalidate one. If this bill doesn’t go through, it could ultimately mean even more risk for biotech companies when they embark on the expensive drug development stage and stifle innovations in treatment.
Biotech is already a struggling sector as it is. Many small firms are still in the drug development stage and waiting to make that big hit. A drug’s approval or denial can make or break them. Even if the industry gets lawmaker support, health insurers may not reimburse for the drugs they discover. If Congress comes to a decision and addresses the reform bill this year , it will be a barometer for the entire sector.
- SPDR S&P Bioetch (NYSEARCA:XBI)
- iShares Nasdaq Biotechnology (NASDAQ:IBB)
- First Trust Amex Biotechnology Fund (NYSEARCA:FBT)