I was recently asked what the single biggest threat to the biotechnology industry is today. My answer was immediate – the biggest threat to biotech innovation is the unsustainable mismatch of spending and revenue in the U.S. federal budget. The enormous national debt and the huge annual budget deficits that feed it endanger America’s entire economic future – but the nation’s dire fiscal situation is particularly threatening to our industry.
Part of the reason for that is that tight budgets have squeezed the funds Congress makes available to the National Institutes of Health (NIH) and the Food and Drug Administration (FDA). Without adequate funding for basic research by the NIH, the pace of new discoveries is slowed. Without a fully funded FDA, the regulatory review process for new drugs becomes slower and it takes longer for safe and effective new medicines to reach patients. These are serious challenges for BIO members and the patients who depend on them.
But the real threat to biotech’s future is in the government’s healthcare entitlement programs, mainly Medicare and Medicaid. Healthcare spending continues to grow at a rate that outpaces both inflation and federal revenue growth. Sooner or later, Congress will have to take up the difficult and unpleasant task of reforming these entitlement programs.
The serious concern for the biotech community is that Congress will approach reform as a matter of cutting costs by imposing cost controls and reducing reimbursements for innovative drugs. This would inevitably drive investors away from the biotech sector, and just as inevitably mean that many much-needed new treatments and cures would either be delayed or stuck on a shelf and abandoned for lack of funding to complete their development. This would be a fatal blow for thousands of small biotech companies – and most importantly – for potentially millions of future patients who won’t get the new treatments they desperately need.
Entitlement reform in some form is inevitable – but how it is accomplished will make all the difference in the world for biotech innovators and the people we serve.
The 2013 BIO International Convention will tackle these difficult issues head on. I will welcome to our Keynote stage former Senator Alan Simpson and Mr. Erskine Bowles, co-chairs of President Obama’s National Commission on Fiscal Responsibility and Reform and co-founders of The Campaign to Fix the Debt. I am looking forward to moderating a lively discussion with these two knowledgeable leaders at our Keynote Luncheon panel, “Debt, Taxes, Government Services and Politics – Is There a Way Out?” on Wednesday, April 24th, 2013.
Simpson and Bowles will share their vast experience dealing with the federal budget issues that so impact our industry’s ability to innovate and will discuss their non-partisan movement to put America on a better fiscal and economic path.
To learn more about the Keynote Luncheon and the 2013 BIO International Convention, please visit http://convention.bio.org/keynote/.
Filed under: Events, Jim's Corner, 2013 BIO International Convention, BIO Events, BIO International Convention, BIO President and CEO Jim Greenwood, budget deficit, debt ceiling, Events, FDA, federal budget, finance policy, Food and Drug Administration, Health Care, Medicaid, medicare, National Institutes of Health, NIH, simpson-bowles