NCPA - National Center for Policy Analysis

Medical Innovation: How the United States Can Retain Its Lead

February 20, 2012

The United States has consistently been on the cutting edge of health care innovation for decades.  However, American companies are increasingly regulated and limited by a burdensome U.S. Food and Drug Administration (FDA) that is driving some of the best innovators abroad, says the Wall Street Journal.

  • The U.S. biomedical industry is essential to the American economy, employing 1.2 million people directly and over 5 million throughout its supply chain.
  • The total output of the industry in 2009 amounted to some $519 billion, according to a 2011 Milken Institute report.
  • From 2001-2010, U.S.-based companies produced nearly 60 percent of the world's new medicines, up from 42 percent the previous decade.

Given these substantial features of the industry, it becomes crucial that market participants not be alienated and instead feel free to experiment and innovate inside of the United States.  Instead, cumbersome FDA requirements regarding clinical trials and delayed market introduction make investors wary.

  • The Tufts Center for the Study of Drug Development reports that clinical trials from 2003-2006 were nearly 70 percent longer than those from 1999-2002.
  • According to the 2012 California Biomedical Industry Report, about 80 percent of life-sciences CEOs surveyed don't believe that the FDA regulatory approval process "is the best in the world."
  • Eighty-one percent of respondents in that same survey states that, "within five years, another country could conceivably recreate the ecosystem that has made the U.S. the leading biomedical region in the world."

If the United States is to retain one of its flagships of a strong economy, it must reign in the burdensome nature of the FDA and allow medical innovators to operate effectively within its borders.  The primary focus of reform, then, should be on allowing new technologies to reach the market faster to the benefit of producers and consumers.

To this end, the FDA should consider approving for market introduction those medicines that are proven safe, even if their effectiveness has not yet been thoroughly proven.  This will allow for broad experimentation and shortened trial times.

Source: Andrew Von Eschenbach, "Medical Innovation: How the U.S. Can Retain Its Lead," Wall Street Journal, February 14, 2012.

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