The Global Biomedical Industry: Preserving U.S. Leadership

Study Scope and Economic Impact:

• The Milken Institute's new report, The Global Biomedical Industry: Preserving U.S. Leadership, documents the U.S. rise to prominence in the sector.
• The industry directly employs 1.2 million people, generating approximately $70 billion in wages and over $200 billion in economic output.
• Ripple effects across the supply chain create a total of over 5 million jobs (direct and indirect) for every single biomedical job.

Structural Industry Shifts:

• The "blockbuster drug" era (drugs generating over $1 billion in annual sales) is largely over due to the shift toward personalized medicine.
• Future pharmaceutical revenue is projected to range between $400 million and $500 million per drug, significantly lower than historical peaks.
• Current regulatory approval processes are not adapted to the methodologies required for personalized medicine and adaptive trial designs.

Policy Recommendations for Competitiveness:

• R&D Tax Credits: The U.S. R&D tax credit ranks 17th out of 21 countries with such programs; the report recommends increasing the credit by 25% and making it permanent, as the U.S. is the only major industrialized nation without a permanent credit.
• Corporate Tax Reform: The U.S. corporate tax rate of 35% is the highest among advanced economies (second only to Japan); recommendations include cutting the federal rate to the advanced economy average of approximately 23%.
• Agency Funding: Policymakers should increase funding for the FDA to support personalized medicine frameworks and raise NIH funding to improve clinical trial efficiency.
• Fiscal Prioritization: In an era of fiscal austerity, government spending must be differentiated, prioritizing biomedical R&D over less critical expenditures.

Workforce and Talent Supply:

• Domestic STEM (science, technology, engineering, mathematics) enrollment and graduation rates are shrinking.
• Competing nations, specifically China, India, and Singapore, are vastly expanding their STEM student pools.
• Failure to increase domestic STEM enrollment risks ceding the U.S. biomedical industry to these international competitors.

Global Competitive Landscape and Emerging Technologies:

• International competitors are aggressively investing in both research institutes and commercialization seed capital, often outpacing the U.S. in regulatory environments.
• In nanotechnology, the U.S. retains the largest patent share at 26%, but China has surged to over 20%, indicating rapid catch-up in emerging fields.
• The U.S. faces a slipping regulatory edge in several major areas while other nations improve their regulatory landscapes.