NVCA Provides Public Policy Recommendations to House Committee on Energy and Commerce to Address Current Challenges Hindering Medical Innovation
The U.S. venture capital industry has always played a critical role in advancing medical innovation through investment in the life sciences industry, which includes biopharmaceutical, medical technology and diagnostics companies. The life sciences industry has revolutionized healthcare worldwide by preventing or curing serious conditions like influenza and cancer, and transforming once fatal diseases like HIV/AIDS into manageable chronic conditions.
However, our nation’s innovators—from federal research agencies to academic research institutions to emerging biopharmaceuticals, diagnostics and medical technology companies—have come under significant stress caused by several factors, including: limited access to capital, a burdensome and unpredictable regulatory environment, and constrained coverage and payment policies of insurance companies and government health care programs.
The result is that the U.S. innovators and investors, faced with lengthy and costly regulatory delays that prevent life-saving cures from reaching the market, are going overseas where faster, simpler, more predictable regulatory environments exist.
Flawed U.S. regulatory and reimbursement policies have led to a real crisis for medical innovation. Venture capital investment in early-stage life science companies continues to fall, reaching a 15-year low in 2013. The impact of the decline in early-stage funding is significant — the lion’s share of breakthroughs in science and medicine comes from small companies. For example, in the medical devices industry, 80 percent of companies have fewer than 50 employees.
At the NVCA, we are committed to ensuring that entrepreneurs in the U.S. have the opportunity to bring life-saving medical innovations to market. Through our ongoing engagement with federal agencies, Members of Congress and staff, and collaboration with our life sciences members, we are advocating for policies promote the growth of new companies that bring value to patients worldwide and the entire healthcare system.
This year, the House Energy and Commerce Committee launched the 21st Century Cures initiative, led by Chairman Fred Upton (R-MI) and Rep. Diana DeGette (D-CO), to find solutions to ensure the U.S. remains the global leader in medical innovation.
In June, Alexis Borisy of Third Rock Ventures and Mike Carusi of Advanced Technology Ventures testified before the House Energy and Commerce Subcommittee on Health during the hearing “Examining the Role of Incentives in Advancing Treatments and Cures for Patients.” Their testimonies outlined the myriad challenges facing early-stage medical device and biotechnology companies and the factors that have led many entrepreneurs and investors to go to foreign markets first.
As part of NVCA’s ongoing work to enact reforms that will ensure regulatory and reimbursement policies keep pace with innovation, this week we submitted a set of high-level public policy recommendations to the House Energy and Commerce Committee. Our recommendations include:
- Create a national advocacy strategy focused on preserving U.S. leadership in medical innovation;
- Support for continued government funding of R&D which drives the discovery of breakthrough innovations;
- Provide appropriate incentives for collaborative public/private partnerships that can help address key barriers to innovation;
- Encourage and support continued FDA efforts to implement a patient-centered benefit/risk framework for drug and medical device development;
- Continue to develop flexible and innovative regulatory pathways for cutting edge drugs and medical devices;
- Review and ensure the effectiveness of FDA’s Special Protocol Assessment (SPA) process;
- Develop clarity, transparency and flexibility in the regulatory process for laboratory developed tests (LDTs) that will keep pace with scientific advances and genomic science;
- Provide greater transparency and use of clinical trial data;
- Develop coverage and payment policies that reward investment in medical innovations that provide value both to patients and the healthcare system;
- Provide greater patent and intellectual property incentives for medical breakthroughs;
Today, the rise of transformative technologies and advancements in science and engineering hold great promise for patients and health systems. Through these reforms, we believe the potential of the U.S. medical innovation ecosystem can be fully realized.