Advances in life sciences—including pharmaceuticals, biotechnology, and medical devices—were a major driver of global economic growth in the second half of the twentieth century. Since World War II, the United States has stood firmly at the forefront of the life sciences revolution, with this leadership built upon a solid commitment to robust and sustained federal investment in biomedical research and development (R&D), channeled primarily through the National Institutes of Health (NIH).
This public investment laid the foundation for the development of scores of breakthrough pharmaceutical drugs and therapies—from personalized gene therapies to synthetic skin to cures for certain types of cancer—and has catalyzed the development of a globally competitive, high-wage life sciences industry in the United States. Today, the U.S. life sciences industry supports more than 7 million jobs and contributes $69 billion annually to U.S. gross domestic product (GDP). But U.S. leadership in the global life sciences industry is today under threat on two fronts. First, federal investment in biomedical research through NIH has decreased, both in inflation-adjusted dollars and as a share of GDP, nearly every year since 2003. Put simply, the United States is not sustaining the historically strong investment in biomedical research that once propelled it to global life sciences leadership.
At the same time, global competition has intensified, as a growing number of countries, including China, Germany, India, Singapore, Sweden, the United Kingdom, and others have recognized that life sciences represents a high-wage, high- growth industry and have taken measures seeking to wrest life sciences leadership from the United States.
These nations have not only significantly expanded their financial support for biomedical research, they have also implemented a range of policies designed to enhance their biomedical innovation ecosystems, such as tax incentives through “patent boxes,” regulatory reforms to speed drug approvals, and immigration and education policies designed to attract and to educate the best life sciences talent. As this report demonstrates, in an increasing number of indicators—from trade balances in pharmaceuticals to shares of global pharmaceutical-industry output—such policies and investments have enabled several countries’ life sciences industries to become competitive with that of the United States.
China, for example, has identified biotechnology as one of seven key strategic and emerging (SEI) pillar industries and has pledged to invest $308.5 billion in biotechnology over the next five years. This means that, if current trends in biomedical research investment continue, the U.S. government’s investment in life sciences research over the ensuing half-decade is likely to be barely half that of China’s in current dollars, and roughly one-quarter of China’s level as a share of GDP. And China already has more gene sequencing capacity than the entire United States and about one-third of total global capacity. Other countries are also investing more in biomedical research relative to the sizes of their economies. When it comes to government funding for pharmaceutical industry-performed research, Korea’s government provides seven times more funding as a share of GDP than does the United States, while Singapore and Taiwan provide five and three times as much, respectively. France and the United Kingdom also provide more, as shares of their economies.
Yet the challenge to U.S. biomedical research competitiveness is not just that other countries are investing relatively more in biome