The Biotechnology Industry Organization (BIO) represents more than 1,100 member companies and research organizations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products to heal, fuel, and feed the world.
At its simplest, biotechnology harnesses cellular and biomolecular processes and puts them to work to solve some of the greatest challenges facing our society—whether it’s finding cures of cancer, protecting against bio-terror threats, or creating renewable energy sources and a sustainable food supply for a growing world population.
BIO’s Mission
BIO’s mission is to be the champion of biotechnology and to advocate for a policy and business environment that supports ongoing biotech innovation. As the world’s largest biotech industry organization, BIO (http://BIO.org) provides three broad areas of service to our members:
• Advocacy: BIO has a world-class advocacy team, attracting leaders from the ranks of Congress and federal regulatory agencies to work on the issues that matter most to the future of biotechnology at the state, federal, and international level.
• Events: BIO produces the annual BIO International Convention—the global event for biotechnology leaders—and other meetings and investor conferences throughout the year. The 2012 BIO International Convention will take place June 18-21 in Boston. Learn more at http://convention.bio.org.
• Business Services: BIO offers business development programs, award-winning publications, and discounts on essential products and services.
Unleashing the Promise of Biotechnology
BIO recently launched Unleashing the Promise of Biotechnology, a new policy initiative to advance American biotech innovation.
Biotech research and development is a particularly high-risk undertaking due to substantial start-up costs and a lengthy research phase and review process for most new products. The typical biotech firm is a private company with fewer than 50 employees, has up to five therapy products in development, and is three or more years away from having product revenue.
These factors make most biotechnology companies almost entirely dependent on investor funding. The scientific and business risks biotech companies must navigate make having the right policy environment to support innovation all the more critical. We need a policy environment that incentivizes the magnitude of investment necessary to translate the scientific potential that resides in thousands of American biotech companies into breakthrough cures, treatments, vaccines, and diagnostics that will lead to a healthier America; and the enhanced agricultural products, biobased materials, fuels, and industrial processes which are the foundation of the biobased economy.
Stimulating a Biobased Economy
The biobased economy refers to economic activity and jobs generated by the use and conversion of agricultural feedstocks to higher value products; the use of microbes and industrial enzymes as transformation agents or for process changes; and the production of biobased products and biofuels. BIO seeks to elevate awareness of the biobased economy and highlight the outstanding job creation and rural/Rust Belt economic development potential of industrial biotechnology and biorefinery commercialization.
Federal policies and programs in several areas can stimulate the development of a biobased economy. BIO supports reauthorization and enhancement of the Biomass Crop Assistance Program (BCAP) which encourages farmers to produce purpose-grown energy crops for advanced biofuels and biobased products. Formally establishing a federal crop insurance program for energy crops will also advance development of this sector.
The Unleashing the Promise initiative also includes proposals for tax law changes, tax credits, and grants targeted to stimulate advanced biofuel and biochemical production, promote research in synthetic biology for enhanced sustainability of biofuels and renewable chemicals, and advance projects in industrial biotechnology and biobased chemicals.
Promoting Investment in Innovation
Congress has historically provided tax incentives to high-risk endeavors (such as oil and gas exploration, alternative energy, and high-tech start-ups) as a means for encouraging new investment. However, current tax law does not do enough to foster investment in healthcare, green technology, or energy-focused biotechnology companies.
Given the economic and societal benefits of ensuring a robust biotech industry in the United States, it is imperative that Congress and the Administration adopt policies that recognize the unique financial structure and capital needs of biotech companies. BIO’s Unleashing the Promise proposals to promote investment in biotech innovation includes:
• An angel investor tax credit, modeled after numerous state programs, to encourage individuals to invest in early stage biotech companies.
• Improved capital gains treatment for qualified investments in capital-intensive, small biotech companies which currently do not enjoy the same treatment as other small businesses.
• A “Patent Box” which provides a reduced corporate tax rate on income flowing from certain types of intellectual property. Many Western European countries have adopted such a plan to attract more research and development activity. A patent box provision will make investment in U.S. biotechnology more attractive by enabling innovative companies to get a greater return from their R&D expenses.
• A repatriation tax holiday for funds brought back to the United States from abroad by multinational companies and invested in biotech research and development.
These measures, and others in our proposal, will attract more investment to the biotechnology sector, strengthen small business, and promote American innovation.
Creating an FDA that Turns Hope into Cures
Creating a 21st Century FDA that can turn hopes into cures is a major focus of BIO’s Unleashing the Promise initiative.
The U.S. Food & Drug Administration (FDA) has the important mission of reviewing new drugs (and other medical products) for safety and efficacy. However, the FDA’s regulatory processes have not kept up with rapidly advancing science. The FDA product review process has become too lengthy, too expensive, and too unpredictable, contributing to delays in needed therapies reaching waiting patients at a time when the need for biomedical innovation is growing.
The American population is aging—ten thousand Baby Boomers will turn 65 each day for the next twenty years. In all, 72 million people will enter Medicare over that period. Unfortunately, a growing number of Americans of all ages suffer from chronic disease, such as heart disease, cancer or diabetes. Today about 45% of the population has at least one chronic disease. About 75 cents of every dollar that the U.S. spends on health care goes to treat chronic disease, and these costs will rise dramatically along with a projected increase in the incidence of chronic disease.
Biotechnology innovation can save lives and save dollars. By developing new therapies to better detect, prevent, and cure disease we will have fewer sick people, less suffering, and significant healthcare savings. For example, delaying the onset of Alzheimer’s disease by just five years could save the Medicare program $50 billion per year.
Congress should add update FDA’s mission statement to include advancing biotech innovation. This will give the agency a renewed focus on improving its process for getting new treatments and technologies to patients faster, without compromising safety. The FDA can advance innovation by reviewing products in a timely manner and by having a consistent and science-based decision-making process that is reflective of patient needs.
FDA must have both the capacity and commitment to incorporate the latest scientific advances into its operations. Our proposal includes ways to provide FDA with better access to external scientific and medical expertise, along with periodic external management review of its operations.
FDA should employ transparent review processes and requirements that are understood by patients, physicians, industry, investors and policymakers. Also, the agency must develop better, more collaborative ways to incorporate the views of patients when evaluating the health products it regulates.
Heal, Fuel, and Feed the World
The policy agenda I’ve summarized here reflects the big, bold and daring thinking required to create new models to encourage investment in innovation and to speed up the discovery of scientific breakthroughs. In short, this agenda will enable the biotechnology industry to fulfill its promise to help, heal, fuel, and feed the world.
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