Late last week I posted comments by Lilly's CEO John Lechleiter stating that there was an innovation crisis looming in the US and we needed to make 4 key policy changes to combat it. These were:
- Broad improvement in science and math education
- Immigration laws that permit top foreign scientists to work in the US
- A well-funded basic research infrastructure in academic and government labs
- Tax policy that fosters innovation
Today, I came across this article by Chris Rivera, President of the Washington Biotechnology and Biomedical Association, in Xconomy. In it, a recent study by Batelle, commissioned by the Council for American Medical Innovation, states there are 4 major areas that policy needs to address to maintain America's medical innovation world leadership position. The Council is Chaired by former House Majority Leader, Dick Gebhardt (I'm a St. Louis constituent from his district).
Biotech Must Have Predictable Regs, More Capital, More Talented Workers to Thrive.
The four areas of challenge for our medical innovation ecosystem (government phrasing) were outlined as:
- Lack of consistency and predictability in US FDA regulatory review and uncertainty in reimbursement
- Inadequate private investment for company formation and R&D growth
- Gaps in translating research innovations to commercial new treatments
- Limitations in the US bioscience talent pool
Read the Batelle report here - Download Gone_Tomorrow (I didn't name it!).
How should we meet the challenge? Interestingly, Lechleiter's four suggestions probably would help address issues 2-4 identified by the Council to some degree and resemble some of the Council's own recommendations. His promoted changes probably would not address the regulatory and reimbursement challenge identified in the Batelle report.
The Council's recommendations for these 4 Challenge areas:
Regulatory Policy
- Support FDA's Advancing Regulatory Science Initiative to improve science based risk-reward analysis
- Fund FDA to support more complex science and increased jurisdiction
- Expand ICH efforts to spread best practices re: Technical Requirements for Registration of Pharmaceuticals for Human Use and increase use qualified expert input
- Adopt policies that encourage new medical technology under reimbursement policy and don't penalize early adopters of technology
Increase Private Investment
- Strengthen the federal R&D tax credit by making it permanent and globally competitive
- Adopt tax and economic incentives to boost manufacturing
- Encourage venture financing from formation through IPO by creating federal angel investment tax credit, incentives to foster capital pools, and promoting alternative stock market methods for IPOs
- Private federal financing support for bioscience R&D infrastructure
Translational Research
- Commit to 10 year growth budget strategy for NIH with more emphasis on applied research
- More specific university-industry collaboration approaches following model of National Science Foundation or Department of Energy for "innovation hubs"
- Protect university technology transfer as set out in Bayh-Dole act (cost of patent recovery, overhead support, etc)
- Funding for the Cures Acceleration Network to support innovation for rare disease
- Reform SBIR & STTR programs to address "valley of death" challenges in commercialization
- National policies to encourage participation and retention in US-based clinical trials
Talent
- Federal support for K-12 science, technology, engineering, and math efforts
- Funding for vocational, technical schools, community colleges and industry consortia to retrain existing workforce in biomedical careers
- Increase number of US and foreign students pursuing graduate degrees in biosciences in US - could include scholarships and loan forgiveness for US student in technical fields; and a streamlined green card process for foreign grads of US universities at master's and Ph.D level
At face value, this looks like it will cost some money - finding the budget with all the other federal commitments is undoubtedly a big issue. However, investment in biomedical innovation does pump needed support into an industry where the US can claim leadership. It is a major engine of economic growth and a source of better paying knowledge based jobs. It is vital to the health of healthcare and ALL its ancillary benefits to the US population.
I think a key is to get more public-private investment and to leverage collaboration between those two sectors. It goes back to exploiting more open innovation models in pursuit of new biomedical discovery - a historic US strength and an acknowledged source of our current leadership position.
If the government is to invest in an industry, this would seem to be a good choice given a current level of high competence and leadership, and with good prospects of offering a long term payoff. The payoff coming not only for the industry itself but for the public it serves as we're ultimately taking about delivery of healthcare and quality of life.
As the report states, 'global leadership in medical innovation and biomedical development is "ours to lose"'. As I posted yesterday in the Innovator's Paradox, the best time to invest in innovation is when you are in the lead.
Posted by Bruce Lehr June 25th 2010.
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