Biotech industry can lead way to economic recovery
A new Gallup poll should send shock waves through Springfield. Half of Illinois' residents said they'd leave the state if they could. Nearly one in five are planning to move away within a year.
The big concern prompting this discontent? Jobs. While improving, Illinois's unemployment rate stands at 7.5 percent - 1.2 percentage points above the national average. State economic growth continues to lag far behind most states.
Our policymakers should take immediate action to reverse this trend. And they should start by actively cultivating one of this state's major economic growth engines - the biopharmaceutical industry.
Drug producers already support more than 200,000 local jobs and generate $53 billion in annual economic output. And they're attracting massive investments in new drug development projects that promise to grow the industry's local footprint in the future. Indeed, biopharmaceutical companies spend about $80,000 per employee on research and development every year. And between 2010 and 2012, the Illinois biotech industry received over half a billion dollars in venture capital funding.
The Department of Commerce and Economic Opportunity's five-year economic development plan recently identified the biomedical/biotechnical industry as a high-potential industry cluster with projected job growth of 157,000 by the year 2025.
These firms are a cornerstone of the economy. And the fight to grow them should start by supporting public insurance programs that keep drugs affordable for low-income Illinois patients and ensure drug innovators are properly compensated.
Unfortunately, both Medicare and Medicaid often provide insufficient coverage for prescription drugs, forcing patients to pay for needed drugs on their own or simply go without.
Illinois instituted the Illinois Cares Rx program several years ago to make up this gap. But the program's funding was slashed in 2011 and has yet to be restored. Illinois Cares Rx needs to be bolstered. Public insurance should pay for vital new medications and keep local drug innovation humming.
Second, state leaders should streamline the tax and regulatory environment for medical innovators. Of course, these companies should pay their fair share and operate under common-sense safety rules. But too often they're getting bogged down in unnecessary hurdles.
Indeed, Illinois now ranks a dismal 42nd on the Mercatus Center's Freedom Index, which ranks states for the effects of their policies on economic, social and personal freedoms. Entrepreneurs face way too many bureaucratic burdens. Cutting away the red tape will free up biotech companies to grow, creating new jobs and attracting more development dollars.
Finally, our congressional delegation must protect and strengthen intellectual property protections that are paramount for the biotech industry. Drug development requires an immense amount of time and money. In fact, bringing the average new biopharmaceutical to market costs over a billion dollars and takes a full decade. Intellectual property protections like patents and trademarks grant drug innovators a temporary market monopoly for a new product, providing them a fair shot at recouping that huge investment.
Taking these steps will help ensure that the Illinois biotech sector continue to flourish and power the state economy. But government action that hampers growth could scare off new development investments, with firms relocating abroad to more favorable tax and regulatory environments.
Illinois can't afford to lose these valuable opportunities to other countries. Our leaders must foster a healthy policy environment for Illinois' burgeoning biopharmaceutical industry. With the right support, our state economy can continue to recover - making Illinois a place people won't want to leave.
• David Miller is president and CEO of the Illinois Biotechnology Industry Organization (iBIO) and Mark Denzler is vice president and COO of the Illinois Manufacturers' Association.