News Life Sciences Industry, government seek united front on promoting life sciences
Industry, government seek united front on promoting life sciences
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By Nathan Peck | LabWork
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KALAMAZOO — The U.S. is the leader in the medical device market worldwide.
That position, however, is at risk.
From lengthy approval processes at the Food and Drug Administration to unfair trade practices abroad, leaders of the medical device industry say that the U.S. is at risk of losing its place at the top to Europe and Asia. Today, the U.S. accounts for 40 percent of the global medical technology market, but more than 87 industry leaders expect greater employment growth overseas.
Advanced Medical Technology Association (AdvaMed) called on the Obama administration and Congress to help ensure the industry’s competitiveness and adopt its competitiveness agenda to help ensure U.S. dominance in the marketplace. At a June event at Stryker Medical’s East Center Avenue facility, Sen. Debbie Stabenow, Rep. Fred Upton and representatives from the life sciences industry pressed for administration focus on the industry.
The medical device industry represents $33 billion to the economy, employs 400,000 people nationally, having created 70,000 new jobs between 2005 and 2007, and is a net exporter. That position, however, is threatened, said Stephen MacMillan, president and CEO of Stryker Corp., because of unfair trade policies overseas, 
regulatory and tax policies in need of reform, and a corporate tax rate above that of competing nations.
“Maintaining that leadership into tomorrow requires two things — our ability to continue to innovate and the reduction of the regulatory cost and burden,” MacMillan said. Stryker has created 3,200 new jobs outside the U.S. with another 5,300 jobs in the U.S. over the last two decades. “It is no secret that much of the growth in U.S. multinationals has occurred outside the United States.”
Stephen Ubl, president and CEO of AdvaMed, said any conflicting policies and strategies have proved a disincentive for innovation domestically. The regulatory approval process has increased 45 percent in duration for incrementally improved products, and 73 percent for new products over the last decade. The result has been that startup companies looking to launch new products are finding overseas markets friendlier to innovation rather than seek 510(k) approval from the FDA. 
Just 45 percent of medical tech clinical trials were carried out in the United States in 2009, the last year for which complete data is available. That is down from nearly 87 percent in 2004. The U.S. growth rate lags behind that of the BRIC countries, as well as France, Germany, Israel and Japan.
“All the road signs we see in Washington are telling us one thing: We are putting everything at risk,” Ubl said. “Our industry trade balance has been cut by two-thirds. The U.S. once had a tax policy that led the world in encouraging innovation. Now we are lagging.”
Trade policies play a significant role in the risks to the domestic industry as developing nations are adopting trade policies to favor home-grown medical technology companies, or are requiring the U.S. to locate research facilities locally. AdvaMed highlights the fact that China’s “Indigenous Innovation” policies for government procurement will require the purchase of products based on domestic 
intellectual property and force IP to Chinese companies.
“Other industries are seeing the promise of the medical technology. … Chinese leaders are picking this industry as a winner and growing it on their own,” Ubl said.
Stephen Rapundalo, president and CEO of MichBio, said that for the life sciences industry to grow in the region, federal agencies, elected officials and state and local officials need to be focusing on a comprehensive strategy.
“For the first time, a lot of diverse people are on the same page — state officials, trade associations, our friends in Washington (D.C.). With sufficient support we can change policies. We are seeing some alignment of goals here,” Rapundalo said. “We have had a governor that gets it, understands our impact on the state and that we need to continue to build upon our biosciences legacy.”
Rapundalo is heartened that, in spite of the budget constraints, the Michigan House and Senate are reconstituting subcommittees on the biosciences. The changes in economic development strategy at the Michigan Economic Development Corp. means that the incentives landscape is shifting, but Rapundalo is optimistic.
“It is a sea change. (The MEDC) is much more focused on working with industry partners,” he said. Though less funding is directed toward tax incentives, “there are different ways to play the game. We have to make sure we have the right tools in place. From what I’ve seen, we’re headed in the right direction. I’m glad we have shifted the focus to economic gardening. We have to take care of what we have here.” lw
