DC WIRE

President’s Policies Will Hamper Discovery
By Robert Goldberg, PhD
LAST MONTH, President Barack Obama said small businesses “are the heart of the American economy.” He promised his administration would do everything it could to help entrepreneurs since they were the “core of America’s story.”

Yet, Mr. Obama’s policies are threatening biotechnology, one of the most vibrant and important forms of small business our nation has ever produced. Medical innovations have added wealth and health to our nation. From 1970 to 2000, increased longevity added approximately $3.2 trillion per year to national wealth, the equivalent of half of the average annual gross domestic product (GDP) over that period.

Many Jobs
According to Milken Institute research, biopharmaceutical companies are responsible for creating over 2.7 million jobs across the United States. The industry was directly responsible for $63 billion in real output in 2003 and a total output of over $172 billion when its ripple effect is factored in across other sectors.

The President has increased federal funding for basic research and stem cell science. With $20 billion a year in research funding, the National Institutes of Health is important. But to translate discoveries into treatments will require more than the nearly $60 billion currently being invested by pharmaceutical, biotech and venture-capital firms on cutting-edge treatments for cancer, Alzheimer’s, AIDS, mental illness and heart disease.

That investment is (in real dollars) declining. Less than half of all public biotech firms have six months of cash left for research. For startups the situation is more dire, even though the scientific promise of their investment is great.

Bad Choices
Yet at every step of the way, President Obama supports policies that will stifle the entrepreneurship that he praises—and is vital to actually producing real cures:

President Obama is establishing a comparative effectiveness council to slow down the introduction of new medical technologies. This entity would, like similar agencies in England and elsewhere, allow economists to compare old treatments with new ones and then tell doctors how much someone’s life is worth—and whether it’s worth saving—in order to save money.

The impact on innovation and patient well-being should be obvious. The UK’s comparative effectiveness panel said new cancer pills were more effective than debilitating chemo treatments and extended life but still weren’t worth paying for. No wonder the UK biotech industry issued a report blaming comparative effectiveness for killing not only people but the incentive for innovation.

The President wants to apply comparative effectiveness to Medicare and eventually to every health plan. This would delay and ration the elderly’s use of breakthrough drugs and ultimately let the government control what drugs and treatments everyone can take. In Europe, over the past 10 years, similar restrictions have caused the development of new drugs to stall. From 1993 to 1997, Europe launched 81 breakthrough drugs; from 1998 to 2002, just 44. Meanwhile, launches in the U.S. jumped from 48 to 85.

Stalling Prosperity
Together, these policies are draining the life out of the biotechnology industry. The President is investing in “green” technologies to promote the environment and prosperity. Yet, his healthcare policies will undermine private sector investment in medical innovations critical to solving public health problems related to the aging and growth of the world’s population. For all his rhetoric, thanks to his policies, the medical discoveries the President supports will never be translated into economic prosperity or treatments that transform humanity.

The views of the author are his own and are not necessarily those of the publishers of PM360.