I never intended this blog, or my writing, to be so heavy on medical technology but I suppose we all end up writing the most about whatever it is we think most about and understand best. As part of this, I'm starting to worry about where the U.S. is going to be in 10 or 20 years with our biological science infrastructure.
The starting point for this was reading Merck's announcement today that they were firing a large number of workers and closing manufacturing facilities and research facilities. Over the past few years, virtually all of the major pharmaceutical firms have fired scientists and researchers, including Pfizer, AstraZeneca, J&J, Novartis, and GlaxoSmithKline. On top of that, the stock, private equity, and venture capital markets have been so weak that biotechs cannot get the funding to start up or expand their research (and absorb those scientists).
Where do these researchers go? Academia is not much of a backstop. Although Obama's stimulus plan did give a significant boost to NIH funding (the NIH funds an enormous amount of university-level biology research), that funding had been in decline for years and looks poised to fall sharply once the stimulus runs out. Moreover, considering the budget issues of tomorrow that are being written by the spending of today, I don't see the financial flexibility to really spend more in the future.
Even if there were a lot of money available, it would not necessarily help all that much. Academic research is often very highly specialized and focused more on figuring things out for their own sake. If you ask most academic researchers how their work will directly benefit mankind, you might get a puzzled stare or a rude "harrumph" about the inherent value of knowledge for its own sake (or a spiel about how biological research is a large mosaic/tapestry woven together by hundreds of independent discoveries).
And I'm fine with that. It's not academia's job to develop preclinical compounds. Moreover, there is a lot of value to pursuing knowledge for its own sake - oftentimes, some of the most important discoveries are made when a scientist simply digs in to "figure something out" as opposed to looking for a targeted solution to a particular problem. After all, penicillin and pacliataxel were "happy accidents" that stand in sharp contrast to the inability to find cures for ailments like malaria and HIV/AIDS.
Right now, at least some of those academics are flowing into CROs and maybe that's the ultimate destiny of biological research outside of academia. More and more, Big Pharma is shaping itself as a marketing enterprise and looking to get out of the businesses of manufacturing and R&D. That's fine; it's worked pretty well for Forest Labs.
All in all, though, I'm worried about where this could leave the U.S. science infrastructure in a decade or two. I don't think it's a coincidence that U.S. electronics firms cut back on their engineering and R&D and ultimately found themselves getting lapped by the Japanese, Koreans, and now Chinese. While the U.S. still has plenty of high-quality electronics engineers (in fields like semiconductors, especially), I would still maintain that there has been something of a "brain drain" that has translated into the U.S. no longer being the default leader in bringing new technologies and concepts to the market.
A lot of work goes into getting a PhD in biological sciences, and these people are not stupid. If they see their career prospects (and the prestige of their potential profession) increasingly devalued, they are going to do something else. Once that happens, once talented people abandon science because they don't see a fair return on the efforts involved, we're going to be in a bad situation.
Right now, the U.S. is hands-down the leader in biological science. Let's hope we don't see a repeat of what has happened to our electronics sector.
Disclosure - I own shares of JNJ
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