opinion | Congress’s Biotech Unicorn

Congress says the NIH is slow, bureaucratic and risk-averse. They have a point. A Johns Hopkins study last year found that only 2% of NIH’s 56,169 grants in 2020 went to Covid-19 research. That’s because the agency looked at grant applications and needed multiple reviews by more than 20 scientists.

Some researchers compare the NIH grant application process to college admissions—secret, often arbitrary, and sometimes nepotistic. The NIH grant process needs to be streamlined. But the solution is not to create a new agency that can replace some of the private investment.

The House bill gives the agency broad discretion to “accelerate innovations in health and medicine to promote the development of new, breakthrough capabilities, technologies, systems and platforms that are not being accomplished by federal programs or private entities.” ” and “promoting high-risk, high-reward innovation.”

But private industry is taking bigger risks, such as mRNA technology. Biotech startups and drugmakers are spending billions of dollars to optimize mRNA platforms for personalized cancer vaccines, regenerative drugs (rebuilding damaged tissue) and autoimmune treatments, among other uses.

Large drug manufacturers invest more than $90 billion annually in research and development. Last year the Life Sciences venture-capital funding — on which most small biotech startups rely — raised a record $33 billion. Some 260 vaccines are in the pharmaceutical pipeline, and more than 1,300 gene and cell cancer treatments are under development.

There is no shortage of personal risk taking. But there is a huge risk that government policies may erode private investment by reducing the rewards for innovation, i.e. profits. Democrats are threatening drug price controls. Progressives are calling on the Fed to strip patents of drugs they deem too expensive. This may include mRNA treatments.

The Centers for Medicare and Medicaid Services set an ominous precedent this spring when it refused to cover

biogen‘s

The novel Alzheimer’s drug EduHelm—the first treatment shown to slow disease progression—outsides a randomized controlled trial. This was the first time CMS denied a Food and Drug Administration drug approval.

Let’s hope that opposition to high-priced drugs like EduHelm doesn’t cause the FDA to go back to its old, risk-averse habits. Canada this month approved an experimental amyotrophic lateral sclerosis (ALS) drug that slowed disease progression by 25% over six months in a clinical trial. But the FDA is faltering on approval after critics decried these benefits.

America doesn’t need another bureaucracy to finance new technologies. We need an existing bureaucracy to encourage private innovation. Politicians on both sides of the aisle nowadays think the US needs to use industrial policy to compete with China. But China’s only pandemic innovation was the lockdown and surveillance.

Congress allocated $1 billion in an omnibus spending bill to seed funding for new government healthcare startups, but it doesn’t need to sink further.