Guest Column by Patrick Plues

Biotech Can Give Our Economy the Boost It Needs—If We Let It

The key to a stronger, more vibrant and more secure American economy could be staring us right in the face. A groundbreaking new report circulating in Washington reveals that one of America’s leading industries still has untapped potential to drive job creation, competitiveness and long-term economic growth.

That sector? Biotech. America’s biotech industry already contributes $3.2 trillion to the economy—but could add much more with the right reforms. Healthcare spending accounts for more than 17 percent of U.S. gross domestic product, and life-science companies are uniquely positioned to curb those costs.

That’s because the biopharmaceutical sector is our primary source of new medicines. Preventing or curing diseases like cancer and diabetes would avert trillions of dollars in future spending on hospitalizations and long-term care. At the same time, more breakthrough medicines would return productive workers to the workforce, a key driver of economic development. 

A few simple policy changes could spur the industry to new heights.

Already, more than 2 million Americans work in biotech across roughly 150,000 companies, according to a recent BIO report. Moreover, every biotech job creates 3.48 additional jobs in industries like manufacturing, utilities, and healthcare, supporting eight million workers nationwide. 

We’ve all witnessed the industry’s transformative impact on public health. In 2020, biotech companies teamed up with government agencies as part of “Operation Warp Speed.” Together, they developed and delivered lifesaving vaccines in record time, hastening the end of the pandemic and the recovery of the U.S. economy. The various technologies that contributed to vaccine development are now being deployed to combat other global threats like HIV and bird flu. 

At the same time, life-saving treatments for sickle cell disease and hepatitis C are now a reality, and next-generation immunotherapies are improving cancer survival rates. Experts say we’re on the brink of a “golden age” of bioscience—a moment brimming with transformative potential.

Yet the industry faces headwinds. 

For example, 18 state legislatures have introduced bills seeking to establish Prescription Drug Affordability Boards. These unelected boards threaten drug R&D by arbitrarily dictating how much manufacturers can charge for certain drugs. When these price caps make it impossible to recoup investment, manufacturers are forced to abandon research into much-needed therapies. 

Other ongoing threats to innovation stem from the 2022 Inflation Reduction Act, which gave Medicare officials the power to set prices for an annually expanding list of medicines. 

Among other flaws, the IRA discriminates against small-molecule drugs—the kind that typically come in convenient pill form—by giving them a shorter reprieve from price controls compared to large-molecule drugs. This penalty is distorting drug development, tilting it toward large-molecule injectable medicines and leaving research on promising pill-based medicines abandoned.

These policies are already harming biotech firms. Venture capital funding has dropped 49 percent since 2021. Hiring has slowed, layoffs have increased and fewer patent applications are being filed. 

Congress, the new administration and state governments have the power to roll back these harmful policies. A more cooperative regulatory environment would spur biotech companies to hire more workers and invest in transformative research. This could lead to lifesaving—and deficit-shrinking—cures for heart disease, diabetes, Alzheimer’s, and other chronic conditions that gobble up an increasing share of the federal budget. 

Simply put, Americans want both cutting-edge medicine and strong economic growth. Our leaders can help achieve both of those goals by fostering a thriving biotech sector.

Patrick Plues is senior vice president of State Government Affairs & Affiliate Relations at the Biotechnology Innovation Organization. This article originally appeared in RealClearHealth.