Every day, more than 140,000 of America’s biopharmaceutical researchers go to work to discover new lifesaving treatments and cures aimed at improving lives. As a result of their hard work and perseverance, today’s new era of medicine has brought about novel, targeted treatments for a variety of diseases, including cancer, neurological conditions, mental illnesses and many rare diseases, among others.
What many may not know is the impact of life sciences in America extends beyond the lab into a larger impact on our nation’s economy and health care ecosystem. This includes investment from corporate venture capital (CVC) arms of leading biopharmaceutical companies taking big bets on challenging early stage research, millions of direct and indirect jobs, and billions in economic impact and industry-sponsored clinical trials that not only help advance potential lifesaving medicines, but also have an impact on state and local economies.
Corporate venture capital pipelines.Most biopharmaceutical companies in the United States are small startups, which devote substantial resources toward research and development (R&D) efforts. Yet while these companies have helped produce some of the most advanced treatments and cures in today’s new era of medicine, innovation doesn’t happen by accident. To bring about new breakthroughs, financial backing is required to operate during the long R&D time frame for new medicines. A considerable share of this financial support comes from CVC arms of established biopharmaceutical companies. A 2018 report found the rise of biopharmaceutical CVC has been strong, growing to $3.2 billion in 2017 or 664% since 2000. These investments not only aid faster discovery of new therapies and treatments, but also support many knowledge-intensive, high-impact jobs, which helps generate a positive ripple effect throughout regional economies.
More than 4.7 million supported jobs. The complex and lengthy process of drug development requires a massive workforce equipped with an array of skills to support research, development, manufacturing, transportation and logistics, among other fields. In total, the biopharmaceutical sector supports more than 4.7 million direct and indirect jobs that together contribute to an economic output of $1.3 trillion, according to a 2017 report. Additionally, the average salary of jobs directly supported by the industry is $129,527 per worker—more than twice the U.S. private sector average of $58,688, and an indication of the high-quality jobs the industry provides.
Clinical trial investments that empower local economies. Clinical trials, which generate the evidence needed to bring safe and effective medicines to patients, are not just a central part of drug development; they are also a powerful engine for jobs and local economies. A 2018 report found that America’s biopharmaceutical companies invested more than $15 billion to sponsor more than 4,500 site-based clinical trials with nearly 1 million participants. Collectively, this investment generated $42.6 billion in economic impact to communities throughout the country.
While economic benefits like these should be protected, the ability of America’s biopharmaceutical companies to continue investing in U.S. communities is under threat, as Washington is considering a set of misguided policies that could reduce incentives to invest in cutting-edge research.
The potential impacts of these policies are demonstrated by a recent survey conducted by the law firm of Manatt, Phelps & Phillips, LLP, which revealed that if certain Medicare Part B proposals go forward, 66 percent of companies expressed concerns about near-term job cuts, the eventual closure of facilities or the abandonment of expansion plans. Additionally, 80 percent of companies said the proposal would reduce their opportunities to partner with early stage biotech companies that currently benefit from a robust CVC pipeline, as detailed above. In other words, Washington’s proposals threaten not just potential innovation; they also threaten the accompanying jobs, CVC pipelines, public revenues and robust local investments that benefit countless communities across America.
For these reasons, we’re committed to advocating for policies that support ongoing investment into developing the next innovations for people everywhere so we can continue to go boldly, together.
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