John Castellani
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American policymakers of all stripes are talking a lot about the importance of innovation to jumpstarting job growth and regaining
economic momentum. In September, for example, President Obama signed a new patent reform bill into law, saying: "If we're
going to create jobs now and into the future, we're going to have to out-build, out-educate, and out-innovate every country
on earth."
Many of Obama's political opponents also talk about the importance of innovation and entrepreneurship as a key to short-term
economic recovery and long-term economic health. As a result, a sort of broad bipartisan agreement about the importance of
innovation to our future has emerged. It is time to embrace this common ground and find actionable, meaningful, and consistent
ways to support innovation.
The Administration and policymakers need to focus on stimulating and growing existing innovative American industries. Look
no further than America's biopharmaceutical research sector to find a dynamic, technology-driven industry. A recent report
on employment in the sector by the Battelle Technology Partnership Practice postulated that an "ideal" industry for stimulating
US economic growth would: have the ability to grow and increase output in tough economic times; provide high-wage, good quality
jobs; be innovative and deploy the latest technology to generate competitive advantages for US companies; generate significant
exports; create a strong supply-chain that drives further economic growth; encourage capital flow with sustained growth; and
be profitable and provide funds for reinvestment into R&D.
Battelle concluded that the biopharmaceutical research sector has all of these characteristics, "and more." In fact, the sector
already makes an enormous contribution to the national, state, and local economies. According to Battelle, biopharmaceutical
research companies supported more than four million jobs nationwide as of 2009, including nearly 675,000 direct industry jobs.
The report showed that each direct sector job supported nearly five additional indirect and induced jobs nationwide. The jobs
created were broad-based and touched a variety of businesses and skill levels.
Based on this sector's performance, it is both perplexing and frustrating to hear President Obama and others from across the
political spectrum talk glowingly about innovation and innovative industries. The problem is that there has been little follow-up
or a horizontal and long-term strategy designed to support their stated goal. When talking about deficit reduction and efforts
to control spiraling healthcare costs, President Obama and some in Congress have pushed for policies that could actually discourage
biopharmaceutical R&D and innovation.
Consistency and perspective are lacking. Too many policymakers often see the cost of medicines, in particular, as part of
the equation for solving immediate fiscal challenges. But they fail to recognize the long-term value of innovative medicines
as a means of helping to control healthcare costs over the long term. As a result, they often pursue policies that undermine
needed incentives for doing innovative medical R&D. These policies, in other words, that may be detrimental to both patients
and for our economy in the short- and long-term.
For much of the past 50 years, America has been at the heart of a biopharmaceutical revolution. Our companies continue to
lead the world both in investing in new medical R&D as well as in developing new drugs. The resulting life-saving medicines
and innovative healthcare technologies have contributed enormously to the fight against disease as well as efforts to promote
health and extend life.
Today, America's biopharmaceutical research companies grapple with more complex science, an evolving business model, and an
often unpredictable regulatory environment. To continue thriving, it is essential for policymakers to take a larger, more
integrated view of the role that innovative medicines play in securing quality and affordable healthcare for patients. A consistent,
horizontal fabric of policies that foster medical innovation will go far towards securing a healthier as well as more economically
competitive America.
John Castellani is president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA).
