For decades, the United States has enjoyed technological leadership in medicine thanks in large part to the robust pipeline of innovation that has flowed from our university labs through development, regulatory approval and commercialization to the American people.
The combination of the National Institutes of Health, outstanding university-based research, access to capital and sound regulation has enabled our country to build a thriving therapeutic medical device and biopharmaceutical industry, create millions of jobs and provide the most advanced health care for our citizens.
Yet, in recent years, an alarming crack has formed in this pipeline and, if left unaddressed, the flow of innovation that reaches American patients will slow to a trickle, putting our global technological and economic leadership in jeopardy.
Because the process of bringing medical innovation to patients is so time-intensive and high-risk, universities have relied largely on the venture capital system to translate our basic research into safe and effective drugs and devices. But this critical collaboration may now be compromised.
A new study published today by the National Venture Capital Association’s Medical Innovation and Competitiveness Coalition found that venture capital firms have been decreasing their investment in biopharmaceutical and medical device companies in the United States over the past three years and expect to curtail further such investment over the next three years, primarily because of challenges related to the Food and Drug Administration.
The resulting investment decline is anticipated to be in the billions of dollars, putting at risk the delivery of many of the promising discoveries currently in our country’s university labs and thousands of American jobs. Without venture investment, these discoveries have limited avenues to market and will wither on the vine.
Ironically, the promise of medical science has never been greater. Potential breakthrough treatments for prevalent and deadly conditions are being discovered at a faster pace than ever before.
Venture capitalists remain committed to shepherding these innovations through clinical trials despite the fact that today it requires 10 to 15 years and more than $1 billion to develop a new drug.
The venture industry has long understood and managed the scientific and business risks of investing in medical devices and biopharmaceuticals.
Many breakthrough technologies have been borne from this process including: MRIs, angioplasty and minimally invasive surgery for heart disease, blood glucose monitoring, implantable defibrillators and many lifesaving and life-sustaining new drugs for cancer, diabetes, heart disease, AIDS, multiple sclerosis, rheumatoid arthritis and orphan diseases of childhood and adults.
Yet, according to the survey, unpredictability and an imbalance in risk/benefit assessment at the FDA, and the difficult reimbursement and economic environment, are driving investment in innovative medical technology away from the United States and threatening our leadership position in the delivery of quality health care.
The time for FDA reform has come. The consequences of inaction are significant for our public health and economy. Faced with these regulatory and economic risks, venture investors — and the endowments and pension funds who fund them — believe they have no choice but to turn their attention and funding away from lifesaving and life-sustaining therapeutic products for highly prevalent diseases and into areas not regulated by the FDA such as health care information technology and services.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.