CLSA Op-Ed in San Diego Union-Tribune: Life Sciences Industry Needs Nurturing to Grow


Tax policies can hurt California’s growth in life sciences

Op-Ed by CLSA Pres. & CEO Sara Radcliffe in the San Diego Union-Tribune
Feb. 5, 2016;  Download PDF

For generations, California has led the way in advancing innovations that drive the economy and create jobs. That is certainly the case with the life sciences — biotechnology, pharmaceuticals, medical devices and diagnostics — a sector that helps fuel economic growth and improves the lives of people in San Diego and around the world.

Indeed, California’s 2,848 life sciences companies up and down the state have more than 1,200 therapies under development, including new treatments for cancer, infectious diseases, central nervous system disorders and many other conditions.

This research is a testament to the values of California’s life sciences sector — helping people and saving lives. California’s life sciences sector is also driving economic growth in the state. In 2014, the industry directly employed 281,000 people. Add in indirect and induced employment — the vendors companies employ and the grocers, dry cleaners and others supported by industry employees — and the number reaches 862,000 Californians. Total salaries exceeded $30 billion with those directly employed making an average of $108,000 per year.

San Diego has particularly benefited from this life sciences boom. Companies like Illumina, Pfizer and Thermo Fisher Scientific, along with The Salk Institute, UC San Diego, The Scripps Research Institute and other research institutes, have generated nearly 40,000 jobs and enormous economic growth.

As seen in the recently released 2016 California Life Sciences Industry Report, California leads the nation in research grants from the NIH ($3.3 billion) and in the ability to attract life sciences venture capital ($4.8 billion). California also leads the nation with 11 of the world’s top 100 universities.

These statistics are compelling, but they only tell part of the story. Behind these numbers lie an army of smart and dedicated researchers, educators, entrepreneurs and investors. Ask any of these people why they chose life sciences and you will often hear variations on the same answer: they want to improve human health and well-being.

This is a powerful driver. Consider how difficult it is to move a promising idea from the lab to the clinic. Most new therapies require 15 years and around $2.5 billion dollars to make that long journey.

This says a lot about the men and women who make this sector thrive. To paraphrase President Kennedy: they choose to do this not because it is easy but because it is hard. Still, beyond these challenges lies the incredible reward of getting new medicines, medical devices and diagnostics to patients and making a positive impact on their lives.

At this point California’s life sciences sector is doing well, but that is not good enough. There are many unmet medical needs still to be addressed: cancer, Alzheimer’s, Parkinson’s, chronic pain, antibiotic resistance, rare diseases and more.

We have more to do and it’s important that we all work together to deliver on the hope and promise this sector provides.

We must adequately and appropriately fund science research. We must promote and improve educational opportunities at all levels – after all, we will only have a vibrant R&D pipeline if we have a vibrant, highly-educated and diverse workforce.

We must recognize that inefficient regulation has an opportunity cost when lifesaving therapies and technologies arrive too late, and work closely with the FDA to streamline the process while maintaining rigorous science and safety standards. We must work to protect intellectual property rights – for many startup life sciences firms, patents are their most important asset, providing the basis for the hundreds of millions of dollars in needed investments to drive product development.

We need to build a 21st Century tax system. In 2013, the California life sciences sector paid $13.2 billion in federal and California State and local taxes. But shortsighted, poorly planned tax policies can drag down growth. For example, the federal medical device tax has forced many companies, large and small, to delay investments and curtail employment.

We must also acknowledge the value of these therapies and diagnostics, which extend life, reduce suffering and improve quality-of-life. These proven results, and our ability to sustain innovation into the future, must be incorporated into any discussion about how much therapies cost and the value they deliver to patients, to the economy and to society.

California’s life sciences community is committed to helping solve many of our long-standing and emerging health problems. We believe that researchers, entrepreneurs, investors, regulators and policymakers will continue to grow California’s breathtaking innovation economy.

We are the envy of the world, and we must never give up that leadership.

Radcliffe is president and CEO of the California Life Sciences Association (CLSA), a nonprofit representing more than 750 life sciences organizations, dedicated to advancing public policies and business solutions that foster and promote medical innovation.

View online at the San Diego Union-Tribune.