Here's the Reason America Is an Innovation Powerhouse

It’s no question we are in a new era of medicine. From personalized medicine to the most advanced cancer therapies that utilize the patient’s own immune system to fight disease, treatments which just a few years ago seemed like science fiction are today reality. 

American patients in particular are fortunate enough to be able to typically access new treatments months or even years before patients in other countries. In fact, America leads the world in new medicine approvals and availability of treatments. 

But it hasn’t always been this way. Just a few decades ago, more than 70% of medicines were first approved outside the U.S. Back then, inefficient regulatory procedures and rules surrounding intellectual property (IP) made it difficult for biopharmaceutical companies to deliver innovative medical treatments to patients in a timely manner. 

In the 1980s and ‘90s, Congress passed a series of laws that helped unify, modernize and support the U.S. ecosystem of medical innovation. These laws have brought the landscape we have today, in which more than half (57%) of new medicines come from the U.S. In 2018 alone, of the 59 new medicines approved by the U.S. Food and Drug Administration (FDA), 42 were first approved in the U.S. before receiving approval in any other country.

Take, for instance, the Prescription Drug User Fee Act (PDUFA),which allows the U.S. Food and Drug Administration (FDA) to collect user fees from biopharmaceutical companies to help support the regulatory review process for new medicines. PDUFA was enacted by Congress in 1992 in response to a bottleneck of new medicine approvals that left patients waiting for years—29 months, on average—for an under-staffed and under-funded FDA to review new drug applications. PDUFA has been transformative in accelerating patient access to innovative new therapies. Now, more than 27 years after the law was first passed, the average FDA approval time for a new medicine is just 10 months. 

In addition to a more efficient regulatory system, American policymakers developed policies to drive innovation by protecting IP, while also leaving space for market competition. Biopharmaceutical companies take on enormous risk when developing new medicines, investing an average of $2.6 billion over a 10 to 15-year period. Robust IP protections are thus needed to spur biopharmaceutical growth. 

Experts agree market competition is necessary for industry health. That’s why in 1984, Congress passed the Hatch-Waxman Act, which fosters robust competition through the timely entry of generic medicines into the marketplace while also respecting our right to IP protections. Due in part to incentives in the law, 90% of U.S. prescriptions today are filled with generics—up from just 19% in the year Hatch-Waxman was passed. 

Also, supporting the American IP infrastructure is the Bayh-Dole Act, which enables research institutions to license the patents on inventions they generate from federally-funded research to private sector partners, including biopharmaceutical companies, who then work to develop these inventions into promising treatments or cures. The resulting collaborative ecosystem between the government, academia and the biopharmaceutical industry is one of our country’s greatest strengths in moving medical advances forward. One study found that between 1996 and 2013, academia-private sector patent licensing across all industries bolstered U.S. GDP by up to $518 billion and supported up to 3,824,000 U.S. jobs.

Because of a strong U.S. patent system, America’s biopharmaceutical companies are willing to invest more than any other industry in R&D and bring forward medical advances critical to addressing some of our most challenging diseases. And because of an effective regulatory process, those medical advances make their way to U.S. patients faster, on average, compared to patients in other countries.

Let’s keep it that way.