By Joan Koerber-Walker, President and CEO, AZBio – The Arizona BioIndustry Association and Chairman of CorePurpose, Inc.
These days tales of economic vitality are few and far between making Arizona’s bioscience sector an inspiration to all as the nation focuses on jobs and economic recovery.
Thanks to a coordinated plan developed in 2002 and supported by leaders from Arizona’s healthcare industry, corporations, government, and universities that has been led by the Flinn Foundation with support from Battelle, Arizona is moving forward faster in economic development, job creation and bioscience research.
From 2002 until today, Bio jobs in Arizona have grown 32%, the number of Bio firms including research, manufacturing, testing, medical labs, and healthcare delivery systems have grown 28% and research partnerships with the National Institutes for Heath has increased 65%.
Arizona bioscience organizations now generate $21 Billion in annual revenues and $765 Million in state and local taxes.
Arizona’s impressive progress is not the result of short term thinking, one-time investments, or partisan politics. It is the result a community committed to working together to build a world-class research base, support commercialization efforts, and migrate the latest discoveries from the bench to the bedside in a manner that is both translational and transformational not just for our industry but for our community as a whole called the Arizona Bioscience Road Map. Community investments statewide include 7 new bioscience incubators and accelerators, 14 new research institutes, 16 new bioscience schools and educational programs and the attraction of investments from global leaders in healthcare and the biosciences who have elected to locate or expand operations here and now call Arizona home.
With each new addition Arizona picks up more speed.
This Fall, on October 13th and 14th, hundreds of the people credited for these great strides will gather at the 2011 AZBio Awards and Expoto celebrate the successes of their peers, share best practices and refuel their innovation engines for the coming year. Exemplary leaders in the field from education to research and from emerging companies to global giants will take the stage to not only take a bow for past success but to share what it takes to accelerate new ones so we all can to move forward faster.
Warning: Road Block Ahead
The Arizona Bioscience Road Map and scores of committed drivers are moving Arizona’s bioscience industry forward at a faster rate each year. In 2010 the Arizona bioscience sector was the only area that grew jobs (+7%) at the same time the state as a whole lost an unprecedented 11%. Alarmingly, such momentum is at risk of being stifled because of the growing federal deficit and well-intentioned but dangerously short-sighted cost cutting measures that are being proposed.
What might feel like a far-removed process, the charge to reduce federal debt, has the potential to damage what is was the only sector with appreciable growth in Arizona in 2010. Among the list of deficit reduction ideas being proposed by the federal government is drastic changes and cuts to Medicare which would devastate patient care along with biopharmaceutical and medical device innovation in our state and country. These proposed changes have been on the list for months and bioscience and community leaders from across the country continue to share their concerns with their legislators about the long term negative impact of what is being proposed.
A case in point
A prime example of this well-intentioned but short sighted thinking is the proposed changes to Medicare Part D. A federal program to subsidize the costs of prescription drugs for Medicare beneficiaries in the United States, Medicare Part D was enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and went into effect on January 1, 2006. The Medicare Part D model creates a healthy competitive environment of compromise that saves consumers money because private insurance companies work directly with drug manufacturers and pharmacies to negotiate rebates and other savings one-on-one. Most importantly, the approach is working. Medicare Part D has proven to be cost-effective, operating at 41% below the projections that were made when the legislation was originally passed.
Now, the talk of new ‘government-imposed’ rebates for this program in Washington could hinder the development of future cost –saving and life-saving medical advancements, because government-imposed rebates would reduce the dollars available for investment in research and development or bioscience from both existing leaders in the biopharmaceutical arena and investors in emerging bioscience companies.
Add to that a new medical device tax, changes to the ASP+6% rate under Medicare Part B and other proposals that sit on the table and we run the risk of bringing life saving (and cost saving) innovation to a screeching halt.
Don’t place a road block on a perfectly good road.
Now is the time to accelerate growth. The last thing we want to do is cause innovators and the investors that support them to hit the brakes. Major improvements in human health the world over—advancements in treatments of HIV/AIDS, cancer, heart disease, Alzheimer’s, diabetes and much more—are due to bioscience. These chronic diseases are the primary drivers of ever escalating healthcare costs. At a time when we need to be building momentum for sustainable health initiatives and new treatments that can manage or better yet prevent these chronic conditions even the discussion of these proposed changes has the potential to slow us down.
A collaborative approach to health care innovation has proven to be a powerful economic engine in our state. Nationally it can drive investor returns, strengthen national competitiveness, and boost economic growth. The biopharmaceutical manufacturing industry alone supports more than 3 million U.S. jobs and nearly $300 billion in total output to GDP. In 2009, industry-wide R&D investment passed a record $65 billion in goods, services and high paying jobs.
Looking down the road
Interrupting the R & D-driven scientific advancements and development in treatments for ailments that impact hundreds of Arizonans such as cancer, Alzheimer’s, heart disease and osteoporosis makes no sense. Such a move will be at the expense of patients, their families, and our economy. New industry cost burdens could result in in devastating cuts to R&D investment. In the long term, short term thinking costs us all. Setting up road blocks and other impediments for the development of new innovations adds a level of risk that is unacceptable to already risk-averse investors. Long-term, changes of this kind will cost us all, as reducing patient access to care and hampering innovation will ultimately exacerbate the financial burden of healthcare on businesses and individuals.
An unenviable position
There’s no doubt that the ‘super committee’, the 12-member panel including Arizona’s own Senator John Kyl, is in an unenviable position. Tasked with cutting $1.5 trillion from the federal budget, the committee has their work cut out for them. While they will face enormous pressure to deliver instant results, now is the time for leadership, long term thinking and strategic action based on collaboration with industry. “Reforms” that suppress competition, inflate seniors’ premiums, restrict access to treatments, discourage R&D, deter investment in innovation and cut tens of thousands of skilled, high-paying jobs in our state and others would be counterproductive and short-sighted.
The bioscience industry is committed to moving innovative healthcare solutions and the economy forward faster. Washington’s support in keeping the way clear of road blocks to that acceleration and growth rather than impeding it with short term thinking is critically important. Now is the time for a long-term collaborative view with an eye toward the economic and physical health of our country long term. It’s working in Arizona. You just activate the “collaborative gene.”
Note: This post has been expanded from “My View” as seen in the Phoenix Business Journal on September 30, 20011. To see the original editorial click here.
About the author:
Joan Koerber-Walker, MBA is the president and ceo of AZBIO – The Arizona BioIndustry Association. The statewide voice for Arizona’s bioscience industry, AZBio is dedicated to ensuring that Arizona bioscience companies have the resources, connections and economic environment they need to keep moving forward faster.
To learn more about the accelerating growth of Arizona’s bioscience industry visit:
Arizona’s Bioscience Roadmap: www.flinn.org
Arizona Bioscience 101: www.arizonabiobasics.com