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Flashback Friday: Historical Perspective on Health Care Reforms

January 26, 2018
This post is part of BIO’s yearlong, bi-weekly series called Flashback Friday, highlighting newsletter stories from BIO’s past.  To learn more about BIO’s history and our 25th Anniversary visit our interactive historical timeline.

Reprinted from BIONews, September/October 1993


By G. Kirk Raab, Chairman, Biotechnology Industry Organization

Soon after this reaches you, President Clinton is scheduled to formally announce his health care reform plan before a joint session of Congress. Rather than predict what he will propose or what the eventual legislative outcome will be, I would like to suggest criteria by which the biotechnology industry should evaluate, the health care reform proposals that emerge from Congress.

Surely the president's plan will address health care access and financing, and we are likely to see intense controversy on those issues. But the overarching concern for BIG is how the new health care reform plan will affect our mission: bringing to market safe, innovative and cost· effective treatments and cures for significant medical problems.

We must first ask this question: Will health care reform ultimately enhance the quality of care, promote the development of more cures and improve the quality of life?

During the last two decades the biotechnology industry has created important new treatments to fight serious medical conditions. The pipeline of biotechnology products under development promises to provide far more advances in the coming years. In fact, most experts agree that in the next several decades biotechnology will be the single largest contributor to medical progress from within the overall pharmaceutical and healthcare industries. Any health care reform plan that is designed to improve future medical outcomes needs to recognize and support the efforts of the biotechnology industry.

Second, in evaluating health care reform, the industry must ask how decisions will be made regarding the development and use of new technologies. Will doctors or government bureaucrats make these crucial decisions?

Doctors will decide the value of new technologies based on scientific and clinical evaluation. Bureaucratic decision making is more opt to reflect the uncertainties of budgetary and political compromises and thereby stifle investment in innovative research-the lifeblood of our industry.

Finally we must ask: Will incentives for innovation continue to stimulate research and development investment?

Policy makers must be willing to recognize the industry's massive commitment to ongoing R&D because of the extraordinary opportunities it brings. But they must recognize the level of investment and risk-taking that is being made to realize the new products in human biotechnology that will bring the important clinical advances the medical community and general public won't.

Last year the biotechnology industry spent $5.9 billion to realize the dream of medical progress. Without continuous and adequate investment capital to pay for this level of R&D expenditure, the industry will be seriously crippled. A negative impact on U.S. productivity, economic growth and competitiveness could follow.

It is crucial that policy makers understand the need to keep the spirit of capitalism alive for the biotechnology industry. Otherwise the free market incentives that stimulated the medical progress of the post will no longer spark that progress, and government restrictions and intrusion into medical decision making will blunt the effectiveness of the world's most prolific source of medical progress.

Conversely, if we are allowed to do what we do best, our industry will significantly improve quality of life, as well as contribute ultimately to reducing the cost of health care. During this reform process, none of the decision makers should ever lose sight of the fact that as important as economics ore, saving lives and reducing suffering should be a foremost priority of this notion, and that priority should be embraced as passionately by our political leaders as it is by the medical community.

I personally believe President Clinton is well intentioned in his effort to reform health care in this country. But his recommendations and ultimately the reforms that are enacted must be thoughtfully designed so that they will actually achieve those good intentions. The immediate and pressing challenge for the industry as the new health care proposals unfold is to ask the right questions and forthrightly carry the message of our mission to our political leaders.