How America Risks Surrendering Its Global Dominance In Drug Discovery

Chinese regulators just granted conditional approval to the world's first Alzheimer's treatment in over 15 years.

This potential breakthrough, invented by a Shanghai startup, offers hope to Chinese patients and their families. But it also serves as a reminder that the United States could soon lose its perch as the world's biomedical leader.

Drug development is a long, hard, and risky process that usually begins at one of America's top universities or research institutions. Supported with funding from the National Institutes of Health or private foundations, scientists in these labs research how the genes, proteins, cells and organs in our bodies work. Their discoveries and insights serve as building blocks for new drugs.

Generally, researchers' discoveries have no immediate or obvious medical application. But occasionally, scientists discover something with therapeutic potential. When that happens, a biopharmaceutical company -- often a small start-up -- typically begins investigating how to transform this research into a new drug.

If early lab experiments and animal testing show success -- judged by safety and efficacy -- researchers begin trials on human patients. Just 12 percent of drugs that enter phase 1 clinical trials on humans eventually gain FDA approval.

Despite these challenges, the United States has led the world in medical innovation for more than 30 years. Whereas only 31 percent of new medicines were invented in the United States in the 1970s, roughly two in three new drugs originate here today.

This success is no accident. It's the direct result of smart policies that, for decades, have nurtured a strong public-private ecosystem for drug discovery.

As one example, America's robust intellectual property protections reward private firms for taking risks, both scientific and financial. Just as these risks enable the development of new smartphones, they enable the development of breakthrough medical treatments.

The structure of America's drug marketplace also gives us a leg up. Unlike governments in the United Kingdom, France, and Canada, the U.S. government doesn't set prices for medicines. This ensures that life sciences companies can price their inventions according to the value they provide and the market, thus stimulating the enterprise of drug development.

As a country, we cannot take our global leadership for granted. Policies that look inward only -- and do not consider the global context of scientific discovery -- can produce unintended consequences.

In recent years, China has committed itself to overtaking the United States as the world's top drug creator. The country now offers incentives for Chinese scientists working abroad to return home. These incentives work. Roughly 250,000 life scientists returned to China between 2012 and 2018, and private investment in China's biotech sector hit $17 billion in 2018. Biotechnology parks are being created as a result of the government’s long-range planning initiatives.

India and Brazil are also trying to bolster their pharmaceutical industries -- often at the expense of U.S. innovators. Both countries undercut our scientists by imposing tariffs on American pharmaceuticals. In the past, these two nations have also threatened to ignore patents and other intellectual property protections.

If one believes, as some do, that the price of American-made drugs is too high, do we imagine that the cost of importing life-saving drugs from China or elsewhere will be less expensive?

Increased importation would also change the balance of trade in biopharmaceuticals, which has been consistently favorable for the United States. At a time of intense global competition, we shouldn't abandon a drug-invention ecosystem that has enabled the nation's biotech sector to lead the world in innovation. Unfortunately, that's precisely what some policymakers are trying to do. They want to increase the government's role in both manufacturing and pricing drugs.

Some lawmakers think the government should seize patents for many drugs that are tied to past government-funded research. By exercising these so-called "march-in" rights, the government could then license the patents to generic manufacturers, who would produce knockoffs.

Proponents of march-in rights advocate for this mechanism in order to widen access to drugs in the short-term. But the long-term consequence would be a chilling effect on innovation, as capital would flee from efforts to create therapies for unmet medical needs. "March-in" approaches would also destroy the fruitful relationships between the government, research scientists, and biopharmaceutical firms that take decades to establish -- and are the envy of other nations.

Imagine what would happen if the government claimed ownership of every new app and website because the Department of Defense helped create the internet. Everyone in Silicon Valley would seek refuge in a more innovation-friendly country. The same thing would happen in the biopharmaceutical industry.

Some policymakers want to let the government set prices based on how long new treatments extend patients' lives -- a metric known as "quality-adjusted life years" (QALY). Others want to tie U.S. drug prices to those set by foreign countries, many of which set artificially low prices, restrict new medicines from entering the market, and already employ QALY analyses. In those nations, patients have less access to lifesaving drugs. This is particularly true for patients with disabilities, rare diseases, and cancer.

If we apply these policies here in the United States, drug innovators would have no way to predict whether patients will have access to their latest inventions, placing a large question mark over the wisdom of investing in new research.

America faces stiff competition in the global race for drug invention. If our leaders implement shortsighted policies, we could easily lose our place at the top.

Michael Rosenblatt, M.D., is the chief medical officer of Flagship Pioneering, a venture firm that originates life sciences companies. He previously served as the chief medical officer of Merck and the dean of Tufts University School of Medicine.