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Healthcare entrepreneurs get some support from Uncle Sam

Posted by: Brian O'Connell on January 04, 2012 Source: Kauffman Foundation

The government is already working on shoring up patent processing for 2012, a move that can only help Uncle Sam’s relationship with healthcare entrepreneurs.

The U.S. government has stepped up its public relations effort for healthcare entrepreneurs, most likely to build support for the polarizing and controversial Health Care Reform Act, which is already in operation and will be fully implemented in 2014.

Uncle Sam knows he needs healthcare startup owners to have his back, and increasingly, the strategy to get that job done from Washington is to let healthcare business owners know that the government has their backs. More streamlined medical device patent rules are a big part of that campaign.

One profound example of that comes from the Under Secretary of Commerce David Kappos, in a revealing speech detailing just how badly the government needs entrepreneurs’ support, and how it intends to get that support.

The speech, given back in June, 2011, to the Medical Device Manufacturers Association, dealt primarily with the key issue of intellectual property and medical entrepreneurship – but Kappos and the federal government have plans in 2012 to go way beyond that.

But everything starts with the speech, and Kappos started with a big pat on the back – always job number one when you’re out to gain support from business owners:

At a time where government struggles to balance its checkbook, your dedicated research is unearthing new, cost-effective ways to tackle cancer and cardiovascular disease; at a time where countries are grappling with generational challenges, your determination is harnessing data and the Internet to more efficiently share information about pandemic disease across borders; and at a time where families around the country are faced with daunting financial decisions, like choosing between a mortgage payment and antibiotics, your partnerships are distributing medicines in ways that make it a little easier for Americans to find and access affordable, life-saving drugs.

To make sure the medicine really went down, Kappos told the group of medical device manufacturers what they came to hear – that Uncle Sam will make it easier to get their products out of development, past regulators, and out into the marketplace:

In order to optimize the ability of entrepreneurs to thrive, the United States Patent and Trademark Office is working in concert with the Department of Commerce and the Obama Administration to reduce barriers to medical device business development and accelerate success. First and foremost, the capacity for growth of any inventor or entrepreneur or new enterprise rests in their ability to raise capital, spur additional research & development, and ultimately bring their ideas to the marketplace. Recognizing that need, the Administration is taking concrete actions to improve the environment for high-growth innovation through the Startup America initiative.

What’s the Department of Commerce going to do in that regard? Starting in 2012, it will take the following steps:

  • Match up to $2 billion for private funds that invest in early-stage R&D
  • Invest in businesses in underserved communities
  • Invest in small entities that face difficult challenges in accessing capital. 

That’s just the appetizer. The Commerce Department has already begun rolling out the “DC-To-VC” summit, where healthcare entrepreneurs can meet with the federal government and be steered to funding sources straight from the address book of Uncle Sam. It plans to increase those meet-and-greets. Check the Commerce Department web site for more details.

Kappos also noted progress in the halls of Congress to support healthcare entrepreneurs in 2012. He cited the recently enacted (in September, 2011) America Invents Act that will allow small and independent inventors to move their ideas to the marketplace faster and enable entrepreneurs  a cleaner shot at a litigation-free, innovative product development  process, one that Uncle Sam hopes will lead to more desperately needed jobs for the economy.

Kappos has said that passage of the act will reduce patent cycles, cut fees, reduce medical device approval backlogs, and increase efficiencies between the government and healthcare companies.

Now that the Act has been passed, Kappos said the U.S. Patent Office is already working on key provisions impacting healthcare entrepreneurs. In a December, 2011 public comment on the implementation of the Act, he said that the agency will have more specifics in “mid-to-late January” of this year. He cites several examples that should directly impact new patents in the pipeline:

We have identified many excellent suggestions that we believe will help us implement a 21st century patent system and patent office, and we are incorporating those suggestions into our proposed rules. As one example, comments suggested particular ways to handle confidential information during inter-partes and post-grant reviews, which we had not considered and are building into our proposed rules. As a second example, comments suggested that the patent owner have the opportunity to dedicate subject matter to the public in its preliminary response during an inter-partes or post-grant review.  We had not considered this idea either and are incorporating it into our proposed rules too.

Once the U.S. Patent Office proposals are in place (once again, in mid-to-late January), business owners will have 60 days to provide comments, according to Kappos. The agency expects to provide final rules, with another window for comments, by August, 2012.

“Patent reform” is a phrase likely to bring a smile to the face of a medical device business owner. There are no guarantees – this is, after all, the federal government we’re talking about – but it seems like Uncle Sam is dedicated to warming up to healthcare business owners in 2012, and has adopted the carrot over the stick as an operational philosophy.

And that’s got to be good news to a healthcare sector that needs all the help it can get in moving medical device products to market.

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