What has remained constant and what has changed since you joined Life Sciences Pennsylvania?
A main constant is the tremendous desire and willingness to work together, particularly in our two core areas: public policy advocacy and facilitating strategic connections. The only other constant is change. Pennsylvania, and Philadelphia in particular, have quickly emerged as centers for cell and gene therapy, which is continually evolving due to innovation. What has changed is the acceleration of company formation, and advancement of technology. This is evident in the academic research community, which is much more open to tech-transfer and commercializing technologies.
Would you say that the Inflation Reduction Act will slow this acceleration?
Discovering, developing and commercializing a pharmaceutical project is by default very high risk. The IRA is throwing in additional uncertainty on the possibility of product reimbursement after it eventually reaches the market. This increases investor skepticism. The act's provisions that affect pharmaceutical pricing cause uncertainty, which is detrimental to the process of creating new drugs.
Do you think the industry now benefits from a better public perception than it did before the pandemic?
The industry absolutely enjoyed a better image and reputation in early 2022, because of the work that was done at the peak of the pandemic.
The pharmaceutical industry saved the world - and to say this is no overstatement.
Unfortunately, during 2022, a year with significant senate and house elections, many political opportunists in the United States returned to the argument that drug manufacturers charge too much for their products. That is a very expeditious and simplistic message that is not grounded in fact. In fact, even though drug companies are achieving lower revenues from their products, patients are still paying the same, if not higher prices for medicine, because of the insurance industry and pharmacy benefit managers, two players in the healthcare system that extract revenue without adding any value.
What makes Pennsylvania attractive and competitive in the Life Sciences industry?
First and foremost, the region’s continuous expansion. In 2020, there were over 3000 Life Sciences establishments across Pennsylvania, which is a 17% increase from 2015. Companies continue to grow, and there is heightened opportunity from the universities. Large pharma companies in particular work more closely with the research community to spin out companies as they face patent cliffs on their larger products. In 2021 Pennsylvania received more than $2 billion in funding from the National Institute of Health, which is essential to support early discovery that ultimately leads to commercialization.
Pennsylvania fosters a tremendous innovation ecosystem that spans multiple sectors. New Jersey is often called “the medicine chest of America”. Cambridge and Boston have a huge reputation for biotechnology. Pennsylvania has big pharma, biotech, a significant medical device and diagnostics presence, research institutions, investment organizations and all the service providers that are essential to maintaining the ecosystem. In our membership alone we have 59 CROs. This translates to a diverse mix of talent in all stages of development in life sciences.
LSPA members range from established multinational pharma companies to fresh start-ups; how do these two blend?
It is critical to have this ecosystem of large pharma legacy and young startups. Big pharma is an excellent training ground for executives, scientists, and commercial business leaders, and this homegrown talent moving to startups and fostering innovation is crucial for the sector. The second big ingredient is financing. The industry faced economic headwinds in 2022 and because of the high-risk nature of our business, a lot of investors stayed on the sidelines. But companies actively engaged in looking for partners and assets. We hold programs throughout the year to help make those connections and introduce startup companies to large pharma and investors so they can get a view into what's available.
The term ecosystem is used a lot when describing our industry - maybe even overused. However, the life sciences community in Pennsylvania truly is an ecosystem in the biological sense of the word. Every entity is dependent upon the other and if one falters it can damage the rest.
What are your main objectives over the coming years?
Our focus is public policy advocacy and facilitating connections. We have a very thorough state and federal policy agenda, and overarching all of it is the desire to operate in an environment that is conducive to starting and enhancing companies. We would like to see more financial support and incentives and increased seed investment. We have good programs in Pennsylvania, like the Life Science Green Houses or Ben Franklin Technology Partners that offer seed investment and are currently well funded, but we want to help increase the financing options for the start-up community. We are also looking at the expansion of the research and development tax credit. There are many financial incentives and programs run by the Commonwealth of Pennsylvania that we would like to see increased.
