Background: Venture capital is the backbone of healthcare innovation in the biotechnology and medical device industries. Small venture-backed companies play a critical role in revolutionizing medical innovations to diagnose, treat, and cure the most deadly and costly diseases.
- Escalating time, cost, and uncertainty of new product development, combined with increasing coverage and reimbursement challenges, provides challenges for venture capital investment in healthcare innovation.
- Approval processes at the FDA (Food and Drug Administration) and difficulties obtaining coverage and reimbursement for breakthrough products put pressure on teams of doctors, scientists, and investors that are working on next-generation therapies and cures.
- Many promising healthcare startups are not able to raise the capital they need to grow and prosper.
Policymakers must recognize that the medical innovation ecosystem in the U.S. is at a crossroads—rich with new scientific promise and opportunities to improve patient care, but harmed by outdated processes that slow and disincentivize promising new ideas from moving forward.
Bottom line: Advancing medical innovation should become a national priority for patients and our healthcare system.
- Policies that streamline the regulatory approval process at the FDA, particularly for novel technologies, and the reimbursement process at the Center for Medicare and Medicaid (CMS). Process improvements are critical to encouraging investors to take the long-term risk of pursuing new medical innovations.
- The MCIT pathway (Medicare Coverage for Innovative Technology) at CMS to benefit the Medicare population through immediate coverage of breakthrough devices and ultimately encourage greater investment into lifesaving products.
- Proposals to lower costs of prescription drugs that recognize how reforms impact early-stage investment in new medicine discovery and long-term investors.
- A federal commitment to robust basic research funding and federal technology transfer programs so promising developments can be commercialized and foster job creation.
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