Innovation impact

U.S. ranks first in ITIF analysis of policy impact on life-sciences innovation

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WASHINGTON, D.C.—The Information Technology and Innovation Foundation, (ITIF), a global technology policy think tank, marked this year’s World Health Day with an analysis of how different countries’ domestic policies affect life-sciences innovation on a global scale. The report, “How National Policies Impact Global Biopharma Innovation: A Worldwide Ranking,” found that of 56 countries comprising nearly 90 percent of the world’s economy, the United States ranks first in terms of the impact of its scientific research, drug pricing and intellectual property policies on global biopharmaceutical innovation.
The study focused on three policy areas that support life-sciences innovation domestically and also have positive spillover effects globally: governments’ R&D expenditures on health, the extent of price controls on biopharmaceutical drugs and intellectual property protections for life-science innovations. The coauthors, J. John Wu and Stephen Ezell, ITIF vice president for global innovation policy, found that the United States, Switzerland, Taiwan, Singapore and Sweden have enacted policies that, on a per-GDP basis, contribute the most to global life-sciences innovation, while India, South Africa, Thailand, the Philippines and Australia have policies that contribute the least.
“It is, on the one hand, understandable that policymakers tend to focus first and foremost on the short-term interests of their own citizens, but too many ignore the fact that this comes at the expense of less innovation of new drugs,” said Robert D. Atkinson, ITIF president. “The bottom line is that all nations need to do their part to support robust global biopharma innovation.”
This was ITIF’s first study of this nature, says Ezell.
On the financial side, in the past decade the United States has led the pack in terms of government funding, with Ezell noting that “From 2007 to 2012, European governments invested just 60 percent the amount the U.S. government invested in biomedical R&D expenditures, while the governments of China, Japan, Korea, India and Australia invested just 25 percent as much, even though the GDP of both regions is larger.”
“Robust federal investment in basic scientific research in the life sciences has long been a distinguishing feature, along with strong intellectual property rights, of the U.S. life-sciences innovation ecosystem. And while the United States has and continues to lead the world in federal investment in basic life-sciences research, to remain a leader into the future, the U.S. government should restore federal investment in life-sciences research to the levels attained in the early 2000s,” he remarks, adding that “ITIF has called for Congress to maintain NIH funding at a level commensurate with at least one quarter of one percent (0.25 percent) of national GDP or higher.”
According to Ezell, one U.S. policy that has significantly and positively impacted global innovation is the 12 years of data exclusivity protection afforded for novel biologic drugs. Ezell notes that the United States is far from the only country that has added policies to boost its footprint in the life sciences.
“In recent years, a growing number of nations have sought to introduce policies to bolster their life-sciences sectors,” he explains. “Nations such as the United Kingdom, Singapore, China and Sweden have not only significantly expanded their financial support for biomedical research, they have also implemented a range of policies designed to enhance their biomedical innovation ecosystems, such as tax incentives through “patent boxes,” regulatory reforms to speed drug approvals and immigration and education policies designed to attract and to educate the best life-sciences talent.
In particular, Ezell points out, “Singapore’s government has provided direct funding for life-sciences industry R&D, investing nearly five times as much in the industry as did the United States in 2009, on a share of GDP basis.”
Ezell says innovation in the biopharmaceutical and life-sciences industries has generally trended upward in the past 10 years, highlighting 2014 as the best year for the industry since 1996 in terms of drug approvals.
“One thing to note here is that we really only finished mapping the human genome in the early 2000s, and given that it takes at least a dozen or more years for new drugs to work their way through the development pipeline, we really should only be starting to see the fruits of the Human Genome Mapping Project now. So new insights derived from better understanding of the human genome should put us on the cusp of more discoveries,” says Ezell.
“Moreover, biopharma research has started and will continue to leverage technological advances of the fourth industrial revolution, such as big data analytics, supercomputers, smart manufacturing and so forth, to improve R&D and health outcomes. There have also been breakthroughs in other areas, such as personalized medicine and gene editing. As long as countries continue to put the right conditions in place—robust investment in life-sciences R&D, strong intellectual property protections and drug pricing policies that balance access to medicines with financial returns for innovators—we should expect to continue to see robust rates of biomedical innovation,” he concludes.

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