FDA: A Cornerstone of America’s Economic Future

By Nancy Bradish Myers, JD, President, Alliance for a Stronger FDA

For close to 20 years, we have been told that FDA oversees products that represent 25 percent of all consumer spending. This has always been an impressive statistic and often awakened Capitol Hill to the realization that FDA matters in important and unexpected ways. But is that all there is to FDA’s role in the U.S. economy?

Nancy Myers

Nancy Bradish Myers, JD

Fortunately it isn’t. FDA is a regulatory agency that can help the economy expand while at the same time assuring that our foods are safe and our biopharmaceutical, medical devices and vaccines are safe and effective. To show the breadth and depth of these impacts, the Alliance for a Stronger FDA released a white paper in early March 2011, entitled The U.S. Food and Drug Administration: A Cornerstone of America’s Economic Future.

The Alliance’s report provides timely, useful information about FDA’s economic impact. It covers medical products, the American food supply, and FDA’s role in fighting bio- and agro-terrorism. It also describes some of the advantages of maintaining the United States’ leadership role in the global economy and the potential costs to the domestic economy and U.S. exports if FDA falls behind.

The report’s findings were supported by a raft of important stakeholders. BIO President Jim Greenwood commented on the report, saying: “The promise of the life sciences – economic expansion, jobs, and new therapies for unmet medical needs – requires an adequately funded FDA and a strong, reliable regulatory environment.”

Margaret Anderson, president of Faster Cures, added: “If we are to advance medical progress and improve patients’ lives – which will significantly bolster the U.S. economy – we need to start making the FDA a national priority.”

Other patient, consumer and industry voices have joined in this view and helped spread the word to policymakers and media.

Here are some of the statistics that demonstrate the success of a biosciences industry that works with a strong FDA. Life science companies:

  • Employed 1.42 million people in the United States in 2008 and generated an additional 8 million related jobs.
  • Provided better paying jobs—the industry average annual wage was $77,595 in 2008, over $32,366 more than the average private-sector annual wage.
  • Invested $105,428 per employee from 2000 to 2007 – more than 10 times the average amount of R&D per employee spent in other industries.

These numbers will rise further with a supportive, strong FDA focused on reviewing products quickly and well so patients and consumers can gain access to new innovative products. Biotechnology is also increasingly important to the food industry, which contributes nearly $1.2 trillion to our economy, or 8 percent of the U.S. gross domestic product.

The report also addresses the risks of not having a well-funded, effective, scientifically advanced FDA, including a direct negative effect on the biopharma, medical device, and other innovative industries. In particular, the potential costs to the American economy of losing our competitive edge are enormous. The United States’ lead in drug development that emerged in the 1990s is associated with the increased rapidity with which the FDA reviewed new drug applications for safety and efficacy and increased consultation with drug developers.

Many leaders in the bio-pharmaceutical industry believe that the determined efforts of Europe and China can only be rivaled if the FDA is given the resources to provide the guidance that medical products companies need. Billions of dollars and millions of American jobs depend upon those endeavors.

In addition to its role in innovation, one of the FDA’s most important contributions is its capability relating to reducing health care costs. For example, the Alzheimer’s Association has calculated that a breakthrough that delays the onset of Alzheimer’s disease by five years would mean 1.6 million fewer Americans would have Alzheimer’s ten years later. Further, the United States would save $50 billion per year in medical costs within 10 years of the approval of such a product and $111 billion per year within 15 years.

The FDA needs adequate resources to continue to ensure that biopharmaceutical, medical device and vaccine applications are reviewed for safety and efficacy in a timely manner. Societal savings from life science innovation can be enormous – but it cannot be achieved without recognizing the FDA’s central role. The members of the Alliance hope you agree and take the time to read the report. If you see this as an important issue, please consider joining our efforts to support a well-funded FDA through federal appropriations.

The Alliance’s 180 members – comprised of consumer, patient, professional and research groups, companies, trade associations, and individuals – represent millions of Americans who support increased appropriated funding for FDA. BIO is one of the founding members of the organization. More information about the Alliance can be found at www.StrengthenFDA.org.

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