The Burrill Report

Although the United States has led the world in biomedical research and innovation for the past century, its leadership is under pressure as countries around the world embrace biomedical innovation as a source of economic growth and U.S. government policy becomes less consistent and predictable, according to two new reports.

Two newly issued studies, commissioned by advocacy groups worried that the government’s increasing austerity measures will have a lasting impact on biomedical innovation, show that America’s competitive advantage in biomedicine is narrowing with respect to countries around the world that increasingly view investing in the sector as an important way to boost their economies for the long term.

The first report from Battelle Technology Partnership Practice, commissioned by industry trade group Pharmaceutical Research and Manufacturers of America, examines 18 countries that are focused on boosting biomedical research and development through pro-innovation policies and programs as a major component of their economic growth strategy.

Countries selected include a mix of developed countries with existing biopharmaceutical presence (Australia, Canada, France, Germany, Ireland, Israel, Italy, Japan, Sweden, the United Kingdom, as well as the European Union) and emerging countries that are targeting the sector for new growth (Brazil, Chile, China, Russia, Saudi Arabia, Singapore, South Africa, and South Korea).

For example, these countries are increasingly seeking to make substantial public investments in R&D infrastructure, fostering R&D investment via tax and other research incentives, focusing on attracting and growing talent in related employment fields, ensuring access to capital and fostering public-private partnerships. At the same time many of these countries are cutting public expenditures, even as they continue to expand research and development incentives to attract and grow their biopharmaceutical company presence.

“If the U.S. doesn't take similar pro-innovation policy steps to counter these efforts – such as reauthorization of the Prescription Drug User Fee Act, progress on the Trans-Pacific Partnership, intellectual property incentives such as 12 years of data protection for innovator biologics, and a permanent R&D tax credit—our global leadership in medical innovation is at risk,” says John Castellani, PhRMA President and CEO.

A U.S. policy framework to help counter these efforts would provide regulatory certainty, ensure patient choice and access to medicines, and incentivize future research and development, he says. “Without a national biomedical innovation agenda, we're not pitting America up against other countries—we're pitting our states up against like-minded foreign governments. So states with vibrant biopharmaceutical research clusters, like North Carolina and Massachusetts, aren't just competing with each other. They're competing with countries like Singapore.”

According to Battelle, the U.S. biopharmaceutical sector is a large contributor to the economy, with more than 650,000 direct jobs (supporting a total of nearly 4 million jobs) and an economic output that totals more than $900 billion. The sector also accounts for nearly 20 percent of all research and development investment by businesses in America. Beyond jobs, the sector has brought more than 300 new medicines to the patients who need them.

A second report by The Information Technology and Innovation Foundation, a Washington, D.C.-based think tank, specifically examines the role publicly supported innovation through the National Institutes of Health has played in the United States’ leadership in biomedical innovation, and makes the case that this support needs to be increased if the country is to remain competitive globally. The study was commissioned by United for Medical Research, a group that advocates for NIH funding.

The report argues that the United States’ leadership position is under threat from intensifying global competition from countries such as China, Germany, Singapore, Sweden and the United Kingdom, all of which have been expanding their financial support for biomedical research and enacting policies to bolster the sector.

Despite increases to the NIH budget, the report notes that NIH has seen its annual budget decrease every year since 2003 in terms of inflation-adjusted dollars and as a share of GDP. As a consequence, there has been a sharp decline in the success rate of applications for investigator-initiated basic research grants at the NIH. The average age of grantees at the time they receive their first award has increased to 42 in 2005 from 34 in 1970.

“Maintaining our competitive edge in a globalized, 21st century economy will require us to make a renewed and strengthened commitment to public investment in biomedical research,” says Carrie Wolinetz, president of United for Medical Research. “We cannot afford to fall behind our international competitors as they attempt to emulate our past success.”


May 25, 2012
http://www.burrillreport.com/article-u_s_could_lose_its_competitive_edge_in_biomedical_innovation.html