Stephen Rapundalo| Detroit Free Press
Business Leaders for Michigan recently unveiled its “New Michigan” strategy, an ambitious blueprint for the creation of 500,000 new jobs and personal income gains of $18,000 per resident by 2020.
The group identified six Michigan assets that can figure prominently in an economic turnaround for the Great Lakes State. Michigan has great engineers, a superb higher education system, abundant natural resources, and sits at the gateway to the Midwest. The auto industry is on the march again. But the sixth asset the group identifies may have the most untapped potential of all. “New Michigan” proposes heavy investments to cultivate a hub for the biopharmaceutical industry.
Our state’s business leaders are right on the money. Biotech research and development yields not only life-saving medical treatments, but also enormous economic rewards.
Nationwide, the biopharmaceutical sector employed more than 4 million people in 2009. Their wages, at an average $118,690, were more than double the national average. Total economic output produced by biopharma was $917.8 billion that year. The United States is the global leader in biotech research.
Here in Michigan, more than 525 life science companies and several first-rate research institutes already employ more than 40,000 Michigan residents. This success lies in the state’s commitment to fostering a pro-business climate and encouraging funding for research and development in innovating industries like biopharma.
Home to the Michigan Life Sciences Corridor — a $1 billion biotechnology initiative — our state now wins investments of more than $2 billion a year. Incentive programs for biotech venture capitalists and the country’s benchmark University Research Corridor, comprised of Michigan State, University of Michigan, and Wayne State, nurture a fertile life science research environment.
On top of that, a recent overhaul has made our business tax structure the seventh best in the country, catapulting the state’s overall business climate ranking to 12th. Improving conditions for leading-edge industry has been a top priority of Gov. Rick Snyder, and it has paid off.
These policy decisions emulate those that propelled the U.S. to its position as world leader in biomedical innovation from the 1980s on. Unfortunately, in recent years, this favorable national environment has begun to deteriorate. Food and Drug Administration (FDA) review times for new medicines and treatments have slowed considerably. The process is increasingly burdened by uncertainty and a lack of transparency. Funding for basic research, particularly through the National Institutes of Health, has fallen victim to budget cuts.
The United States’ position of global dominance in biopharma is by no means a sure thing going forward. We now face unprecedented global competition. In light of the recent economic downturn, other countries have increasingly recognized the economic potential of the biosciences. Our foreign competitors are racing ahead, fast-tracking their own biopharmaceutical sectors for development.
The United States has the potential to meet this mounting competition and sustain its leadership in biosciences. Lawmakers in Washington took a big step in this direction by reauthorizing the Prescription Drug User Fee Act (PDUFA), which requires biopharmaceutical firms to help fund the review process at the Food and Drug Administration. These funds help the FDA review new medicines in a timely and predictable manner, which gives investors the confidence they need to pour money into research and development.
Lawmakers should next consider the corporate tax rate. America’s 39.2% rate – well above the 25.4% average — undermines the competitiveness of firms headquartered here.
America cannot afford to lose its competitive edge in the biopharmaceutical industry. The life-saving advantages of new medical treatments and the enormous benefits throughout our economy are just too valuable.
Stephen Rapundalo is president and CEO of MichBio and co-chair of We Work For Health Michigan.
