Biotechnology companies provide unique benefits to the United States and the world. In the health care sector alone, the industry has developed and commercialized more than 300 biotechnology drugs and diagnostics and there are over 400 products in the pipeline. In the agricultural field, biotechnology innovations are simultaneously increasing food supplies, reducing damage to the environment, conserving natural resources of land, water and nutrients, and increasing farm income and economies worldwide. In the energy and environmental sector, biotech innovation is cleaning our environment and fighting global climate change by reducing our dependence on petroleum and fossil fuels. Biotechnology innovation, if supported by appropriate public policies, has the potential to provide treatments for some of the world’s most intractable diseases and address some of the most pressing agricultural, energy, and environmental challenges facing our society today.
The biotechnology industry relies heavily on patents. The development of a single biotechnology product often takes more than a decade to be commercialized, and hundreds of millions (if not a billion) of dollars of capital investment, a significant amount of which comes from private sources. Biotechnology product development is also fraught with high risk – the vast majority of biotech products fail to ever reach the marketplace. In addition, while biotech health inventions are entitled to the same patent term as all other inventions − 20 years from the time they are filed – they have the additional hurdle of a rigorous pre-launch regulatory review process during which they may lose between 8 to 10 years of the patent life. Venture capital firms invest in capital-intensive, long-term, and high-risk research and development endeavors only if they believe there will be a return on their investment. Patents help provide this assurance. According to a patent survey conducted by researchers at the University of California Berkeley, 73% of the biotechnology entrepreneurs surveyed reported that potential funders, such as venture capitalists, angel investors, and commercial banks, etc. indicated patents were an important factor in their investment decisions. Without strong and predictable patent protection, investors will shy away from investing in biotech innovation, and will simply put their money into projects or products that are less risky – without regard to the great societal value biotechnology can offer.