Executive Summary

This proposal offers a plan to President Obama and his economic recovery team to add 200,000 jobs in the next four years in the biosciences sector by increasing funding to existing programs that target small businesses (Table 1).
(download complete report here)

At the end of 2006, the Biotechnology Industry Organization (BIO) estimated that about 43,000 large and small bioscience businesses provided 1.3 million in direct jobs and 7.5 million jobs in related employment in America.

We can create 200,000 jobs in biosciences in the next four years by increasing funding totaling $6.7 billion to five existing (“target”) programs: SBIR/STTR, TIP, military medical research, Congressional Directed Medical Research Programs, and SBIC. These target programs already operate with competitive funding guidelines; they are staffed and have proposal solicitation, review, and award infrastructure.

Table 1. Summary of Funding Increases to Target Programs

 

• This proposal focuses on increasing funding to small bioscience businesses with “development ready” projects, ie not research.
• Target funding programs would develop therapeutics, diagnostics, medical devices and biological tools where some proof-of-concept has been demonstrated. “Biosciences” may include applications for agriculture, biofuels, environmental protection and law enforcement.
• This proposal focuses on military medical needs to improve the care given to our wounded warriors. Pain is the single most challenging clinical and cost problem in treating our wounded warfighters. Treating their pain costs an estimated $150 billion, affecting 25% of our troops from Operation Enduring Freedom (OEF) and Operation Iraqi Freedom (OIF).

The key assumptions behind job creation are given in the next section. It is assumed that 60% of funds awarded support jobs, with the remainder allocated to supplies, materials, small equipments and administrative costs.

Small biosciences businesses can help reduce the economic costs of a range of diseases and conditions. For example, chronic disease now accounts for $1.2 trillion in economic cost to America, representing 1.7 million deaths, or 70% of all deaths each year. If we had a cure – not just treatment – for diabetes, we could better manage our Medicare costs: about 20% of Medicare patients have diabetes, accounting for 33% of Medicare expenditure. So the definition of “biosciences” here includes stem cell technologies that can cure, not just treat.

Because of the profound impact on American society – OEF/OIF returnees are selling VA-prescribed opiate medicines on the street, and using opiates for suicide (see Appendix C) – specific funding for new non-opiate, effective, safe and affordable medications for pain is called for in this proposal.

Section 1 gives key assumptions, reviews target programs, and then details plans to increase funding to target programs by $6.7 billion in the four-year period 2009-2012.

Section 2 presents the case for non-job benefits of federal investment in biosciences:

2.1 Early-stage private capital for biosciences is presently at a very low ebb;

2.2 The economic multiplier from “investment” in biosciences is very attractive ($6.70 per $1.00 “invested”) and represents a good use of taxpayer dollars. Micro case studies from three states are given; and

2.3 Funding these programs will strengthen America’s global competitiveness.

Appendix A gives a bio for the author, Constance McKee, President & CEO of Manzanita Pharmaceuticals, Inc.
Appendix B gives historical data for success rates of the SBIR/STTR program.
Appendix C gives more detail for the need for more effective, non-opiate pain medications for our wounded warfighters from OEF/OIF.

The increases proposed here will be leveraged by states’ efforts. “State economic development organizations …are becoming increasingly sophisticated …in building the biosciences sector and are adopting and implementing ...programs that support its growth.”

In conclusion, supporting biosciences in America is not only good for job creation, it is a strategic investment that can improve the quality of healthcare provided to our veterans, minimize the human and cost burden of chronic disease, and maintain America’s competitiveness.