The passage of the Inflation Reduction Act last week is an important milestone in the history of American biotechnology. I’ve been honored to participate in that history from a variety of perspectives: White House adviser, congressional staff, senior biotech executive, public company board member, lawyer, and venture capital investor.
Those experiences shape the lens through which I view the industry’s evolution and its future. Over the past four decades, our freedom to innovate has been underpinned by — and helped create — a marketplace that was open enough to fully reward risk-taking investors devoting capital to cutting edge science. And so I am disappointed by the new law’s price-setting provisions and market distortions. But I remain optimistic about the ability of modern bioscience to deliver new treatments and cures.
The arc of the industry’s progress bends toward access and availability to new medicines for patients. Going forward, modest changes to these new regulations can ensure that progress continues. In the 1980s, the early days of my career, there was no viable domestic process for enforcing process patents and no international standard for protecting pharmaceutical innovation. Patent life was shortened by a slow, unfocused regulatory review process. No meaningful generic drug industry existed, and inventors faced uncertainty in enforcing patents. Medicare had no drug benefit, meaning seniors and the disabled were often denied access to life-saving therapies.
Over the intervening years, elected officials of both parties — from presidents to members of Congress — have helped nurture a uniquely important American asset. The result: American leadership in the bioscience sector is unquestioned and unchallenged. What was an infant industry at the start of my career is now one of the largest private sector employers in several states and regions. There are five main reasons for this success story.
Support for Basic Research
The first key to this success has been public policy support for basic science research. That research occurs in the private sector, supported by tax credits; at universities and independent labs, encouraged by public-private partnerships; and at the National Institutes of Health…