As the global economy becomes more competitive, our nation’s ability to innovate and encourage growth will determine whether or not we leave more opportunity to our kids and grandkids, as past generations of Americans have done before us. Today, innovation’s promise has never been greater. Groundbreaking scientific research in treatments for cancer, cardiovascular disease, diabetes and other conditions is moving decidedly forward in scientific labs across the country.
But too often, the unintended consequences of policies hatched in Washington stifle new ideas.
A report released earlier this month by the National Venture Capital Association’s MedIC Coalition found that venture capital investment in the most innovative life sciences sectors has been declining due, in large part, to a complex web of regulatory challenges and competition for investment from other sectors with more predictable regulatory prospects (and reliable returns on that initial investment).
The report shows that unpredictability, a lack of transparency, and an imbalance in risk/benefit assessment at the Food and Drug Administration are key factors driving investment toward health care sectors and outside the United States.
This hasn’t always been the case.
In the 1980s, the creation of a clear regulatory framework at FDA, lack of price controls, supportive intellectual property system, and the ability to attract foreign scientific talent made the United States the world leader in biomedical innovation — a major advantage that it continues to hold today.
But a recent Milken Institute study found that funding cuts, corporate taxes, coverage and payment policies and increasing complexity of the regulatory framework are jeopardizing that lead.
FDA Commissioner Peggy Hamburg understands this dynamic and deserves credit. She has pushed to modernize the agency’s focus, expertise and process to define, encourage and ultimately advance medical innovation.
Her initial successes include release of the “Advancing Regulatory Science” initiative and creation of an Entrepreneur-in-Residence Program for startups looking to navigate the FDA system.
The agency has begun to look at significant reform so that it can better serve the American people and contribute to U.S. economic growth. It has put a focus on regulatory science and continued to work with industry to negotiate improvements to give clarity and predictability.
I look forward to additional initiatives to spur even more innovation. But Congress now needs to ensure that the FDA’s ongoing efforts have sufficient resources and the laws that govern, and sometimes hinder, the development of new drugs and devices are modernized.
In Washington, we are engaged in a politicized and hyperbolic debate on jobs, the debt, and the economy. Conforming the FDA’s regulatory framework to today’s science will actually spur investment, create new jobs, generate new therapies and ultimately have a tangible — and lasting — impact on reducing our debt.
The MedIC survey shows that a lack of clarity and predictability in the current regulatory structure is driving critical investment away from biotechnology and medical device startups.
It found that FDA-related regulatory challenges such as unpredictability, lack of transparency, and an imbalance in risk/benefit assessment are key factors driving investment toward health care sectors and geographies far from U.S. shores.
If we don’t work together to rebalance the risk/benefit equation at the FDA and establish a predictable, efficient process, we’ll see innovation continue to slow and the economy will pay the price.
Without alternative funding sources for high and manageable risk, long-term investments in life sciences companies, our best medical innovations will remain in the labs, never reaching the patients who need them.
Since its inception in the 1980s, the U.S. life-sciences sector has created high-quality jobs and economic prosperity. Health care companies that were founded with venture capital as small startups employed an estimated 1.7 million Americans in 2010, according to IHS Global Insight.
As venture investment wanes, so too will the number of startup companies.
Frustrated scientists and investors, who are starting to abandon the medical innovation process, need the current trend reversed.
Hamburg heard this first hand at a roundtable we hosted in Colorado with life-science companies, top researchers, and investors who are looking for an end to the status quo in Washington’s bubble.
We can work to facilitate innovation while maintaining FDA’s mission to ensure the safety and effectiveness of the medical products that Americans rely on every day and to facilitate the scientific innovations that make these products safer and more effective.
It is clear that the time has come for Congress and FDA to work together and set forth a reform path that puts our country back on track toward innovation and economic growth. Our nation’s health depends on it in more ways than one.
Sen. Michael Bennett is a Colorado Democrat.
