Why We Need A Healthy Biotech Industry
Today, researchers all across the country are pursuing the next blockbuster medical breakthrough — perhaps a drug to prevent heart disease, cure Parkinson’s or eradicate cancer.
And because biotechnology is such a high risk but vital endeavor, we need to ensure that any political plan to reform health care does not undercut the ability of these researchers to discover cutting-edge cures.
Small Success Rates
Over the course of a decade, biotech companies spend nearly $1.2 billion researching, developing, and bringing to market a typical biologic — a complex drug created from living organisms. More than 600 such medicines are currently in the development pipeline, despite the dismal odds of success.
Nine out of 10 drugs fail before reaching clinical trials, and of those making it to clinical trials, more than two-thirds fail to earn FDA approval. Even then, two-thirds of FDA-approved biologics won’t generate sufficient revenue to cover the cost of their development. Despite these facts, more than 127,000 biotech employees keep at it here in Massachusetts, which has long been a hub of biopharmaceutical success.
With everyone increasingly concerned about the cost of comprehensive health care reform — estimates are that it will cost more than $1 trillion over the next decade — some lawmakers are aiming to drain biotech of its profit potential. They want to speed up the introduction of copycat biologics by stripping innovative biotech companies of their intellectual property rights after as few as five to seven years.
It’s no surprise that some federal legislators find biologics a tempting target. Expensive to discover and develop, these drugs are relatively pricey and cost insurers and Medicare a lot. But without a shot at recouping their investment, why would pharmaceutical companies and venture capitalists continue sinking money into the often-elusive search for a biologic wonder drug?
Our own Congressman, Jim McGovern, is among those who positively recognize the importance of a system designed to reward innovation. A majority of members of the Senate’s Health Committee and House Energy & Commerce Committee recently approved legislation to provide biotech firms with the exclusive rights to their proprietary research data for 12 years.
This approximates protections already given to competitive biotech firms all across the European Union. Undercutting their market position any earlier — as some lawmakers contemplated doing — would be counterproductive, and perhaps even drive them out of business.
What’s bad for biotech is even worse for the patients who rely on their ingenuity. At any given moment, a Bay State biotech firm could be a mere weeks away from a lifesaving discovery that could save thousands of lives and billions of dollars. A Lewin Group study, for example, concluded that within five years of a biologic breakthrough for Alzheimer’s, annual Medicare spending could decline by as much as $50 billion.
But such breakthroughs are likely to come only from a robust biotech industry here in Worcester and throughout Massachusetts.
So, the last thing these researchers need in the current economy is to yank back intellectual property rights, making it harder to attract private financing. Venture capital will continue to flow to biotech only if the government — via a reasonable guarantee of data exclusivity — gives biotechnology a fighting chance to recoup their return on investment.
Worcester and Central Massachusetts relies on life sciences, healthcare and education. Let’s make sure we continue to support these vital regional strengths as our future well-being ultimately depends on it.
Kevin O’Sullivan is the president and CEO of the Massachusetts Biomedical Initiatives. He can be reached at kosullivan@massbiomed.org.
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