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Why Life-Sciences Innovation Is Politically “Purple”— and How Partisans Get It Wrong

Why Life-Sciences Innovation Is Politically “Purple”— and How Partisans Get It Wrong
February 22, 2016

America’s success in discovering and developing drugs depends on the twin pillars of federal support for scientific research and a strong IP and reimbursement system that promotes private-sector innovation.

The United States has long had the world’s most effective and competitive system for discovering and developing new drugs—and for more than a half century, there has been a bipartisan consensus that there are two reasons for that success: First, the federal government provides robust funding for scientific research, mostly through the National Institutes of Health (NIH). Second, the U.S. system encourages vigorous innovation in the private sector by providing strong intellectual property protections and a drug reimbursement system that together allow companies to earn sufficient revenues to reinvest in highly risky research and development. But today that consensus is fraying as populists on the left and libertarians on the right question both the policy means and the end result. If the center cannot hold and the longstanding bipartisan policy framework falls apart, then the future of U.S. biomedical innovation will be in peril.

Many on the left have long voiced concerns about drug prices, but most of these have acknowledged that the U.S. system for discovering and developing drugs has worked well and that America has benefited by constantly improving drugs and fielding a globally competitive biopharmaceutical industry (biopharma). Now that view is under attack from an ascendant camp that may be fairly described as “drug populists.” These left-wing advocates complain that biopharma companies charge too much for drugs and that government should impose price controls, weaken patent protections, and shorten the term of intellectual property protection for the clinical test data related to new biologic drugs (known as “data exclusivity”). This is part and parcel of a larger policy agenda for the federal government to assume a significantly increased role in drug development, and the biopharma industry to be significantly hemmed in. These populists embrace the view that health care is a fundamental human right, and they deeply distrust the private sector, which leads them to argue that health care should be a government responsibility—and that government should not only provide insurance through a single payer plan, but also direct and fund development of new medicines.

Meanwhile, just as “drug populists” demonize the biopharma industry, an increasingly vocal band on the right discounts the need for government support for life science research. Motivated by an antigovernment attitude and an overarching focus on fiscal discipline, these “drug libertarians” argue that the private sector can and should do most, if not all, of the work involved in driving biomedical innovation.

Both sides are wrong, however. Implementing their respective proposals to reduce revenues for U.S. biopharma firms and slash government funding for biomedical research would significantly reduce life sciences innovation—potentially increasing, not lowering, future health care costs, slow the rate of improvement in longevity and quality of life for all Americans, and likely lead the U.S. biopharma industry into decline. Following in the path of the U.S. auto and steel industries, it likely America would lose global market share, risking tens of thousands of high-wage jobs.

As such, it is time for policymakers to renew their longstanding bipartisan consensus—recognizing that, politically, biologic innovation is colored neither conservative red nor liberal blue. It is a “purple” issue. Both the public and private sectors have their own distinct and important roles in ensuring the country has a robust biopharma innovation ecosystem. Policymakers should allocate more money, not less, for NIH. And they should push back against efforts to shrink and remake the biopharma industry—either through weakened intellectual property rules or government price controls, which are a form of “free riding” that expects others to pay for the costs of drug development.

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