Over the medium-term, I regard biosciences–pharma, medical devices, broader applications of biotech–as one of the key 2 or 3 drivers of U.S. economic growth. The elements are all lined up: Great science, skilled workers, enormous potential demand. So 5-10 years from now, we’re likely to be reading about the founder of some hot biosciences firm joining Mark Zuckerberg as the latest multizillionaire.
But in the short-term: Oh, lordy. The latest blow comes from the recent decisions to ban the diabetes drug Avandia in Europe and greatly restrict its use in the U.S. Let me quote from Derek Lowe, a pharma researcher:
The whole PPAR story looked like a great way to affect metabolic disorders and plenty of other diseases as well: cancer, inflammation, cardiovascular. That is, if we could just manage to understand what was going on. But we didn’t. Once we all figured out that nuclear receptors were involved and got busy on drug discovery on that basis, we didn’t help anyone with any diseases, and we didn’t make any profits. Big piles of money actually disappeared during the process, never to be seen again.
Megan McCardle adds:
There is a fundamental misunderstanding of the way that a modern economy drives innovation. People tend to think in terms of a “eureka!” moment–a blockbuster idea or product that springs full blown from the head of Zeus, and then exists forever. But in fact, an enormous amount of productivity improvement is driven by tiny, continuous, incremental change. This is true of treating childhood cancer, it is true of drug discovery, and it is true of Toyotas.