Fresh off the whirlwind development of Covid-19 vaccines and therapies, biopharmaceutical innovators could be excused for wondering why D.C. policymakers suddenly seem intent on curtailing the industry’s ability to respond to the next public health crisis.
On Capitol Hill, lawmakers are debating whether to import foreign pricing for novel medicines. In the White House, the Biden administration is endorsing the removal of patent protections for Covid-19 vaccines, even though such a move would provide a negligible boost to global vaccine production. Both measures threaten to dramatically undermine the ability of American companies to develop innovative medicines that could treat and cure innumerable diseases in the future.
There should be no doubt that we are living at the dawn of a golden age of biomedical innovation. The American scientific engine that produced Covid-19 vaccines in record time was fueled by a convergence of advances in genomics, biomarkers, data science, and manufacturing years in the making. The first Food and Drug Administration approvals of a host of new product formats—oligonucleotide, bispecific, oncolytic virus, CAR-T, and lentivirus/AAV—all took place within the last decade. These represent an unprecedented expansion of the armamentarium that physicians have at their disposal to treat and cure disease. In the last few years, 47% of all new medicines were invented by U.S. biopharma companies, with homegrown startups driving the majority of innovation. The bulk of the remainder were developed by foreign companies specifically for the U.S. market.
An indirect benefit of these trends is that most novel therapeutics undergo clinical development and early commercial launch here in the U.S. The rest of the world understands that the American patient has earlier and broader access to groundbreaking therapies via these mechanisms. Indeed, the past decade is filled with examples of medical “firsts” for American patients: the first cure for Hepatitis C, the first gene therapy for blindness, the first immunotherapy for cancer. Future rewards will be greater still if we preserve our current system of incentivizing and protecting innovation.
The remarkable innovation capacity of our biopharmaceutical industry ought to be a source of national pride. Yet while “Made in America” is the global standard for medicines in development today, misguided policy risks ceding our scientific prowess to other countries in the future. This is particularly true in the case of China, where biotechnology has become a strategic pillar for the health of its people and economy.
From 2016 to 2020, the market capitalization of all Chinese biopharma companies increased exponentially from $1 billion to over $200 billion. China saw over $28 billion invested in its life sciences sector in 2020, double the previous year’s amount. Returns on China’s investment are already arriving. The FDA approved a drug developed in China for the first time ever in 2019. While China’s innovation capacity currently remains behind America’s, my experiences as a biopharma professional make it clear they are doing everything they can to catch up and catch up fast.
In fact, when I speak to Chinese biotechnology executives, they boast that they can run clinical trials faster than their U.S. counterparts. The danger of misguided policies that disincentivize pharmaceutical innovation in the U.S. is effectively driving that same innovation to China. If we close off the market in the U.S. at the same time that China is opening its market to innovative new products, then we will see companies choose to first launch impactful novel medicines in China, based on clinical trials conducted in China. Because the FDA rarely accepts data generated entirely outside the U.S., this relocation of research capacity will negatively affect Americans’ access to cutting-edge therapies.
The biotechnology field is advancing rapidly. Promising technologies such as targeted protein degradation and gene editing are perhaps not far from being developed into impactful medicines, and the U.S. risks these technologies being mastered by Chinese companies.
It is widely held that allowing China to gain an asymmetric edge in critical technologies such as AI or quantum computing could destabilize the geopolitical balance of power. The same is true of biotechnology. Chinese scientists were the first to edit the genomes of human embryos, in contravention of international standards, and the U.S. national security community believes China is pushing ahead with experimental concepts for biological and cognitive enhancement of soldiers and civilians. American policy should be focused on protecting, rather than undermining, the global dominance of our biotechnology industry.
Gaurav Gupta, a physician, is the founder of the biotechnology investment firm Ascendant BioCapital.
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