Last week, the President's Council on Advisors on Science and Technology (PCAST) released its "Report to the President on Propelling Innovation in Drug Discovery, Development, and Evaluation" this week. NVCA Board Member and MedIC Chairman Jonathan Leff of Warburg Pincus, participated in the release of the report.
NVCA/MedIC is pleased to see many of the key messages and recommendations for which we have been advocating included in the report.
The report acknowledges the U.S. leadership and tremendous progress in biomedical research and discovery of breakthrough treatments for patients but also recognizes that the current system has not kept pace with the explosion in scientific knowledge.
The report concludes that the biopharma ecosystem is under stress primarily due to the cost, time and risk of drug development which have reached unsustainable levels. The report reinforces the importance of many of the steps we have been advocating throughout the FDA reform debate, and also calls for a national innovation strategy and the creation of a public-private "Partnership to Accelerate Therapeutics," involving all key stakeholders. NVCA/MedIC believes that the development of a national innovation strategy and this type of partnership could help provide the comprehensive framework needed to tackle the critical issues facing the future of the biomedical enterprise.
PCAST is an advisory group of the nation's leading scientists and engineers, appointed by the President to augment the science and technology advice available to him from inside the White House and from cabinet departments and other Federal agencies. PCAST is consulted about and often makes policy recommendations concerning the full range of issues where understandings from the domains of sciences, technology, and innovation bear potentially on the policy choices before the President. Therefore, since PCAST is appointed by the President, we are hopeful that if the President is re-elected to a second term, the issue of biomedical innovation will become a national priority in the second term.
With the Republican and Democratic conventions front and center, NVCA and MedIC were pleased to see language around preserving American medical innovation included in the GOP Platform. On page 34 of their document, we applaud the following section:
Reforming the FDA
America’s leadership in life sciences R&D and medical innovation is being threatened. As a country, we must work together now or lose our leadership position in medical innovation, U.S. job creation, and access to life-saving treatments for U.S. patients. The United States has led the global medical device and pharmaceutical industries for decades. This leadership has made the U.S. the medical innovation capital of the world, bringing millions of high-paying jobs to our country and life-saving devices and drugs to our nation’s patients. But that leadership position is at risk; patients, innovators, and job creators point to the lack of predictability, consistency, transparency and efficiency at the Food and Drug Administration that is driving innovation overseas, benefiting foreign, not U.S., patients.
We pledge to reform the FDA so we can ensure that the U.S. remains the world leader in medical innovation, that device and drug jobs stay in the U.S., that U.S. patients benefit first from new devices and drugs, and that the FDA no longer wastes U.S. taxpayer and innovators’ resources because of bureaucratic red tape and legal uncertainty.
Clearly this language dovetails with the efforts of NVCA and MedIC over the last several years and we are encouraged by the support. We are hopeful the Democrats will also make medical innovation a priority issue in their platform, expected shortly, as well.
After more than eighteen months investigating the Department of Energy Loan Guarantee program, the House Energy and Commerce Committee yesterday passed H.R. 6213, the “No More Solyndras Act” by a vote of 29-19. The bill prevents loan guarantees for any applications submitted after the end of 2011, and would place new restrictions on application reviews and existing loans.
The NVCA, along with TechNet, ACORE, SEIA and E2, put out a statement against the bill saying that the program should be reformed, not shut down. Our statement read in part, "While the DOE Loan Guarantee Program can be improved, elements of the ‘No More Solyndras Act’ go far beyond reasonable reforms and threaten to shut down a successful policy that has helped drive billions in private capital investment, supported tens of thousands of badly-needed jobs and spurred innovation across the sector.” You can read the full statement here.
The bill will be voted on by the full House in September. However, we believe passage in the House would only send a political message rather than ensure passage of a substantive piece of legislation as it stands no chance of moving in the Senate. Chairman Bingaman and Ranking Member Murkowski have both indicated that they see a role for the federal government in programs like the DOE loan guarantee and, despite the failings of Solyndra, the entire program is not a failure.
When it was first enacted in the energy bill of 2005, the DOE loan guarantee program had the strong support of the Bush Administration and bipartisan support. The program was accelerated and began making loans following President Obama’s 2009 economic stimulus bill. The NVCA will continue to support the DOE loan program with a commitment to appropriate reforms to protect taxpayers.
|Today the NVCA and Deloitte released the results from our first ever Global VC Confidence survey which measured the confidence levels from more than 400 investors around the world on a variety of issues. The various categories are extremely interesting and you can view the results here . But here are our top 5 big picture takeaways from this survey:
1) When it comes to overall confidence among global venture capitalists, there is significant room for improvement. Venture capitalists are eternal optimists by nature so the fact that most confidence levels averaged well below 4 (on an 1-5 scale) suggests that something heavy is dragging the industry psyche down. We believe it has everything to do with outside forces and little to do with opportunity, which brings us to the second takeaway.
2) Externalities truly impact confidence levels more than ever before, both from a market and public policy perspective. VCs were the more confident overall about investment opportunities than they were about the forces that impact those opportunities including the economic environment, capital markets, public policies and fundraising. Most concerning were the low confidence levels regarding each home country's ability to enact policies that support domestic investment where only three countries scored above 3.0.
3) With maturity comes challenges that can weigh on confidence levels. Conventional wisdom suggests that newer always feels better and that seems to hold true with investment regions and industry sectors. But that works both ways. Notably, regional hot spots of the last five years such as China and India have matured, leaving confidence levels lower than up and coming areas such as Brazil. The same seems to be the case for investment sectors such as clean tech where the capital intensive realities have impacted confidence levels of investors who were once extremely bullish on the sector in its earlier days.
4) There's no place like home. The survey suggests that investors are more confident about the economies and markets domestically than globally. Whereas earlier in 2000, there was more excitement about investing abroad, there seems to be a plateauing of enthusiasm for this strategy overall. Global economic uncertainty is clearly a driver of this but here in the US, a domestic investment strategy is also being driven by smaller fund sizes and shrinking partnerships.
5) The ebb and flow of the venture industry will always prevail. One thing is certain and that is that confidence levels are – and will always be -- highly fluid. Couple this with a venture industry that regularly moves through innovation cycles and we can only expect to see a different set of numbers next year. For our part, we hope to see an overall improvement.
Yesterday, the U.S. Senate passed S. 3187, the FDA Safety and Innovation Act, by a vote of 92-4, which now goes to President Obama for his signature where he is expected to sign it into law. This is a true win and positive step forward for all stakeholders including industry, patients and the FDA. S. 3187 will provide more than $6 billion in industry user fees to the FDA over the next 5 years to help fund the agency’s review process for drugs and medical devices. The bill also creates new user fees for generic drugs and biosimilars and includes a number of provisions that improve the regulatory approval process.
NVCA’s MedIC Coalition members have worked tirelessly to educate policymakers on the critical issues and challenges facing the U.S. medical innovative ecosystem which made a significant impact on the FDA reform debate and what was ultimately included in the final bill. As a result, we believe Congress demonstrated a keen understanding of the importance of passing legislation that provides needed changes at FDA to help bring the most advanced and innovative medical breakthroughs to U.S. patients safely and expeditiously. The final package includes several of MedIC’s priorities including:
- creates a risk-benefit framework for the drug approval process that will provide a consistent and balanced approach to FDA’s decision making;
- expands the accelerated approval process to new medical treatments;
- provides a new pathway for breakthrough therapies;
- provides incentives for antibiotic development;
- improves the FDA’s advisory committee conflict of interest rules;
- clarifies the least burdensome standards for medical devices;
- modifies the De Novo application process; and
- accelerates the appeals process for medical devices.
We would like to thank all those NVCA and MedIC members who worked tirelessly on ensuring that this legislation included these provisions which will help ensure the US competitive position in medical innovation for years to come.
As we move forward, we need to understand that our work has just started. We will continue to work with all stakeholders to ensure the new law is implemented as Congress intended and also work together to address the other challenges currently impacting life sciences innovation.
|As you have read here at NVCAccess, the Financial Accounting Foundation (FAF) recently approved the formation of a Private Company Council (PCC) which will be tasked with setting accounting standards for private companies. The PCC, which you can read about here, was formed in response to recommendations made by an FAF Blue Ribbon Panel upon which NVCA Board member Jason Mendelson participated. Subsequently, many NVCA members spoke up in support of the PCC formation.
The FAF is now seeking nominations for individuals to serve on the PCC. As they explain in their communications:
Members of the PCC will include users of private company financial statements, including bank lenders, equity investors, and/or sureties; preparers of private company financial statements from a variety of industries and companies of various sizes; and CPA practitioners from national, regional, and local firms.
The NVCA will be participating in the nomination process and encourage our members and all stakeholders of the start-up ecosystem to do the same. The nomination form can be found here. If you have questions, please contact me at Jstaylor@nvca.org. it is important that the venture capital and start-up communities are represented on this important process and standard setting body. We look forward to the work they will do an progress that will be made. The deadline for nominations is June 30, 2012.