Chicago's McCormick Place just hosted the world's largest biotechnology convention. The location is only fitting, given the impressive role Illinois' biopharmaceutical companies are poised to play in the industry's future.
Indeed, according a new report, biotech firms -- including many right here in the Prairie State -- are in the process of developing 907 advanced new therapies. Of those medicines, all are either undergoing human trials or under review by the Food and Drug Administration.
All told, these new therapies target more than 100 different diseases including type 2 diabetes, asthma and melanoma.
Illinois stands at the center of this surge in biotech development. We host the second largest biopharmaceutical cluster in the country. In 2011 alone, Illinois biotech groups introduced 31 new treatments into the development pipeline, including eight new cancer medicines and nine infectious disease therapies.
Each new drug requires a discovery and manufacturing process that can take well over a decade and cost more than $1 billion. Failure is an enormous part of the process: For every 5,000 compounds that make it to preclinical testing, only five are approved for human testing and only one of those actually makes it onto the market.
Given the enormous risks involved in creating these medicines, lawmakers need to do their part to foster biotech innovation. Leaders in Washington need to uphold the current 12-year exclusivity protections for biologics, which provide a temporary market monopoly to recoup upfront investments. If this period is too short, firms will be hesitant to sink hundreds of millions into developing a drug.
Policymakers also have a great opportunity to bring down the total cost of treating serious diseases through the use of biologic medicines. Even though new drugs can be very expensive due to their high development costs, they can eliminate much more expensive hospitalizations and doctors' costs.
Indeed, branded drugs constitute only 6 percent of total health care spending.
Lawmakers must therefore resist a penny-wise, pound-foolish proposal to "reform" the Medicare Part D prescription drug program. Part D has already proven to be incredibly successful at keeping costs in line. The program is on track to cost 45 percent less than initially projected over its first 10 years. And a government commission recently reported 94 percent of Medicare patients are satisfied with the program.
In his budget, the president put forth a plan to impose rebates on Part D drugs sold to low-income enrollees. In effect, the government would be implementing price controls on these medicines. This move would drive up supplemental policy premiums by as much as 40 percent for some beneficiaries, according to a former director of the Congressional Budget Office. And if the price controls are too onerous, folks could be prevented from getting the medicines they need, thereby incurring higher hospital and physicians' expenses and driving up the taxpayers' total Medicare bill.
Illinois has a stake in seeing the biotech sector reach its full potential. We also want cures for our loved ones and our state to be a leader in medical breakthroughs. It's up to lawmakers to set the stage for a thriving bioscience future.
David Miller is president and CEO of the Illinois Biotechnology Industry Organization.