Innovation vital to economy
By Courtney Prestia
Americans are still worried about the economy. According to a new Gallup poll, about 45 percent of Americans consider the economy or jobs the most important problem facing the country.
Fortunately, those of us in Massachusetts are better off than most. While there's ample room for improvement in the Bay State economy, our 6.7 percent unemployment rate is well below the national average.
As the president and founder of Trident Search LLC, a company that specializes in human capital talent management for the biopharmaceutical sector by providing staffing, recruiting, and executive search services, I can tell you these industries have been vital to sustaining the Massachusetts economy.
If we want our job market and local businesses to succeed, we must do all we can to continue supporting medical research and innovation.
The biopharmaceutical industry alone directly employs more than 53,000 people in Massachusetts, and these are great jobs. The average annual salary of pharmaceutical industry workers in our state is $113,364.
Even if you don't work in the industry, you still benefit from it. The industry produces $27 billion of our state's economic output, indirectly supporting another 87,000 jobs and contributing $144 million to the state's tax base.
Medical innovation is the heart of a broad economic ecosystem of Massachusetts businesses. If you tally up all the vendor relationships in the state, that is, business between biopharmaceutical firms and other companies, it accounts for $4 billion worth of business involving nearly 10,000 companies. These relationships sustain a lot of Massachusetts's small businesses, the engine of job creation.
While the economic upside of this industry is impossible to ignore, my experience placing key clinical development staff with several biotech companies around Massachusetts has taught me firsthand about the other big benefit of supporting medical innovation: It saves lives.
The FDA has approved 340 new treatments in the last decade for cancer, Alzheimer's, lupus and hepatitis, as well as numerous other well-known maladies and rare diseases. We're making major breakthroughs. According to the Journal of Clinical Oncology, life expectancy for cancer patients has increased three years since 1980, and 83 percent of these gains are credited to new treatments. Just imagine the pride we would feel if someone in the Bay State's vibrant biotech sector cured cancer.
And yet, members of Congress are considering a proposal to extend Medicaid-style price controls to the highly successful Medicare prescription drug program, Part D. Since it began in 2006, Part D has cost 43 percent less than initial projections, saving $13.4 billion in the first full year alone. Imposing rebates on Part D would place hundreds of thousands of American jobs, more than 6,400 in Massachusetts, at risk and raise health care costs for seniors.
We can't afford such policies that take our biopharmaceutical industry for granted. In recent years, China and countries in Europe have become much more competitive in luring away high-paying, economically beneficial biotech jobs.
At the same time, the economic challenges to medical innovation are greater than ever. Biopharmaceutical companies invested $49.5 billion in research and development last year. That would average $1.4 billion in research expenditures for each of the 35 new drugs the FDA approved last year.
Relative to sales, the pharmaceutical industry spends five times more on research and development than the average U.S. manufacturer.
Biotechnology is a high-risk, high-reward business. It's also highly regulated. Though the industry has weathered the economic difficulties of recent years reasonably well, continued success is by no means a given.
If lawmakers implement Medicaid-style price controls, the industry may be forced to reduce its investments in research and development. The economic impact, to say nothing of delays to medical breakthroughs, could be severe.
That's why it's important we do everything we can to continue to support our vibrant biotechnology sector. Biopharmaceutical companies have a proven track record of helping us live longer, healthier, and more productive lives. Saving Medicare Part D and medical innovation is one thing that everyone in Massachusetts and can agree on.
Courtney Prestia is the Founder of Trident Search LLC.
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