Investment in Medical Innovation Produces Immense Value for Patients, Economies

Medical Innovaiton

Earlier today, I participated in a panel discussion entitled “The Value of Medical Innovation to Patients, Economies and Societies”, which was a part of the Pharmaceutical Research and Manufacturing Association’s Annual Meeting. The discussion centered on one common theme – prioritizing medical innovation has far-reaching benefits for society.

In the U.S., public health problems take a toll not only on individual patients but also on society as a collective whole. The Milken Institute recently concluded that the most common chronic diseases cost the economy an estimated $1 trillion each year and that figure could rise to $6 trillion by 2050. More specifically, a study conducted by the Harvard School of Public Health and the World Economic Forum found that cancer costs the economy about $250 billion in 2010 and anticipated that expense to rise to at least $458 billion by 2030. Promoting and investing in medical innovation could significantly reduce these economic costs and improve public health outcomes.

In addition, the U.S. economy benefits tremendously from expanded medical innovations and the industries it promotes. The field, which accounts for $69 billion of U.S. economic activity, produces highly-skilled jobs that pay, on average, $85,000 a year. Also, 1.2 million jobs in the life sciences industry support 5.8 million jobs in other fields and, while manufacturing jobs in other sectors have decreased, positions in this field have remained consistent.

The U.S. is considered a global leader in medical innovation, for good reason. From 1997 to 2010, half of the world’s medical patents originated in the U.S. and an American has received the Nobel Prize for Medicine 18 times over the past 30 years. A key factor in spurring these new discoveries is our innovation economy, which rewards the enormous risks in time, people, and investment that are needed for the development of new, cutting-edge medicines. Another driver of innovation is our commitment to support research through the National Institutes of Health (NIH) and a robust university system. Additionally, the U.S. has been at the forefront in demonstrating how strong intellectual property rights protections, like those provided for new and innovative medicines, can reinforce and grow an already robust economy.

However, the U.S. cannot rest on its laurels. Intellectual property rights must continue to be a priority not only domestically but globally if we are to achieve the full potential of biomedical innovation. The U.S. should also make permanent and expand the current research and development tax credit so that innovators will have a strong economic incentive to pursue their ideas. Furthermore, funding for NIH should be doubled to ensure that the U.S. remains a global leader in medical innovation.

The U.S. has already made great strides in the field of medical innovation. Maintaining our focus and investment in this field is a critical necessity in order for patients, economies and societies the world over to reap the benefits of future discoveries.

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About the author

Dr. Robert D. Atkinson is one of the country’s foremost thinkers on innovation economics. With has an extensive background in technology policy, he has conducted ground-breaking research projects on technology and innovation, is a valued adviser to state and national policy makers, and a popular speaker on innovation policy nationally and internationally. He is the author of "Innovation Economics: The Race for Global Advantage" (Yale, forthcoming) and "The Past and Future of America’s Economy: Long Waves of Innovation That Power Cycles of Growth" (Edward Elgar, 2005). Before coming to ITIF, Atkinson was Vice President of the Progressive Policy Institute and Director of PPI’s Technology & New Economy Project. Ars Technica listed Atkinson as one of 2009’s Tech Policy People to Watch. He has testified before a number of committees in Congress and has appeared in various media outlets including CNN, Fox News, MSNBC, NPR, and NBC Nightly News. He received his Ph.D. in City and Regional Planning from the University of North Carolina at Chapel Hill in 1989.