PhRMA Report a Call to Action on the Global Challenge to US Leadership in Biopharma

The US biopharmaceutical industry faces mounting global competition from countries in the developing world and Europe that are increasingly implementing pro-innovation programs and strategies in the sector, according to a new report conducted for the Pharmaceutical Research and Manufacturers of America (PhRMA), which represents leading US biopharmaceutical research companies. The report, Closing the Gap: Increasing Global Competition to Attract and Grow the Biopharmaceutical Sector, examines the efforts of 18 so-called “benchmark nations” in pursuing economic growth opportunities from the biopharmaceutical sector. The report seeks to remind US industry and policy leaders that US global leadership in biopharmaceutical research and development (R&D) can no longer be taken for granted.

The report’s authors warn that, like other R&D-intensive industries, the US biopharmaceutical industry faces more aggresive and globalized competition that seeks to challenge the United States’ global leadership in innovation. “The United States is now facing increasing competition to attract and grow a biopharmaceutical presence not just from developed countries, but also from emerging nations such as Brazil, China, and Singapore, that are laying the groundwork for future growth,” the report concludes. Many of the countries named are borrowing effective pro-innovation practices that have worked in the United States, and are building on them at the same time that the United States is, in some respects, becoming less favorable to innovation.

“Countries outside the United States are continuing to implement new ways to seek to grow their life sciences and biopharmaceutical presence as part of their economic development strategies,” the report notes. These nations have publicly funded infrastructure investments that are specifically designed to create a competitive advantage and to make those nations more attractive to biopharmaceutical industry investments.

The report identifies countries that are increasingly focused on building their biomedical R&D and manufacturing infrastructure—with a heavy focus on growing STEM workforces—so that they can better compete with the United States and lure critical investments. Singapore and China, for example, still outpace the United States in key STEM indicators—a sobering fact given current estimates suggesting that, by 2025, US manufacturers will need to hire about 3.4 million workers, with up to 60% of positions likely to go unfilled because of STEM skills gaps in the United States.

The United States must ensure that the right policies are in place to retain its global leadership position and seize the potential for continued economic growth, the report counsels. Three areas of intensive recent activity include:

• Building R&D excellence. Benchmark nations do not pursue research simply to advance basic science; these countries place a strong focus on translating research into innovative medical products. The paper cites the leading example of the European Union’s Innovative Medicines Initiative.
• Improving access to innovation through regulatory reforms. Benchmark nations have new initiatives that focus on improved regulatory approaches to ensure that scientific advances are not held back by outdated regulations assessing safety and efficacy.
• Strengthening biopharmaceutical manufacturing capabilities. Benchmark nations develop in-country competencies in emerging technologies and specialized manufacturing.

Other policy areas of ongoing focus in benchmark nations include accelerating the commercialization of university research and new firm formation, increasing access to investment capital, fostering industry R&D investment via tax and other incentives, and building human capital. Benchmark nations have increased their levels of government-supported research funding, whereas the United States has decreased such funding. Similarly, US spending on R&D is growing at a much slower rate than that of other nations examined. US patent growth lags behind that of other nations, with China more than doubling the size of its patent activity and closing in on the United States in absolute number of patents awarded.

Anne Pritchett, PhD, Vice President of Policy and Research at PhRMA, said, “As we look to the future, our nation’s innovative biopharmaceutical companies are committed to partnering with schools of all levels across the country to develop the next generation of scientists, engineers and technicians who are critical to advancing new treatments and cures.” Continued support of STEM-based initiatives and educational opportunities will make it possible for America to continue to grow the economy, an economy that today, as Pritchett noted, includes 4.5 million jobs supported by the biopharmaceutical industry.