Biotechnology belongs to the new generation of industries based on science and technologies created and funded mostly by the US government. Such developments represent an unprecedented level of government involvement in the creation and support of new sectors of economy. In this part of the article we will discuss US societal factors that led to the origin and development of the biotech industry. Following parts will discuss economics of the US biotechnology as well as relevant US regulatory and legal environment.
Societal factors
Direction of public expenditures has always been a subject of heated debate. Political debates over almost every item in the US budget is one of the most obvious representations of conflicts of interests inside the society. It may seem unusual that the decision to double National Institutes of Health (NIH) budget in 5 years (1998-2003) was not met with any visible opposition. In fiscal year 1998, the NIH budget stood at $13.6 billion. NIH budget grew by about 15% for the next 4 years, as planned, and reached $23.28 billion in fiscal year 2002. Said growth was supported by democrats, republicans, journalists and practically all other societal forces involved in the budget allocation decisions. Doubling of the NIH budget was originally proposed and carried by Clinton Administration (Democratic Party). Republican President Bush made finishing the doubling effort a presidential campaign promise. President's budget proposal includes the $3.9 billion needed to take the NIH budget to the $27.2 billion mark for 2003. The question here that one asks oneself is - Why did the doubling of already substantial funding for biomedical research not spark controversy? There were several reasons for said unanimous support.
From a viewpoint of political correctness, what may be more honorable than to allocate funding to care for the sick? However, as the legend of American business J.P. Morgan used to say, people act for two kinds of reasons, good ones and the real ones. Most people have their personal health problems and they hope that science will find a cure for it. Active supporters of biomedical research funding have their word when it comes to decision-making processes regarding asset allocation towards particular diseases. The diseases that get funded are the ones that have the most powerful supporters.
Another factor that played a role in this year's budget decisions is the threat of bioterrorism. Approximately $1.5 billion are proposed for anti-bioterrorism research, a five-fold increase over the $300 million budgeted for the previous fiscal year.
Diseases, sickly politicians and journalists, as well as threat of bioterrorism do exist in other countries. Why then do we not see a similar support towards biomedical funding in other countries? Therefore there has to be other factors contributing to this tremendous support in the U.S.
Technology-oriented Government and Nation.
Founding Fathers provided in the United States Constitution (1787) that "Congress shall have the power … To promote the progress of science and useful arts". It shows that at the time when this nation was born, Founders realized not only the importance of progress in science and technology, but also the role of the government in the promotion of this progress. Government uses technology to achieve its goals.
Let us look at American history. Majority of the leadership positions acquired by American industries are due to exceptionally fast paced technological advances. The Government follows the same path. The way America fights wars is probably one of the most obvious and dramatic illustrations of the mentioned approach to achieve superiority. Nuclear bombing that caused immediate capitulation of Japan is the most dramatic example. Serbia was the most recent. This approach has centuries of history.
Let us consider a key battle of Spanish-American war, Naval Battle of Manila Bay, May 1, 1898, as an example. In this battle U.S. fleet met with the Spanish fleet near the Philippine capital. Parties had about the same number of men in their crews (1,748 Americans, 1,875 Spanish). But the Spanish fleet was deadly outdated in comparison with the U.S. one. U.S. fleet average velocity was more than 40% higher than maximum speed of Spanish severely underpowered ships. Spanish flagship, the "Castilla", was a wooden cruiser, a very poor match to the steel and armor of the American Asiatic Fleet. Differences in artillery proved to be the most dramatic. U.S. had modern rapid-fire long-range artillery, whereas Spanish, in their own assessment, were "very short of rapid fire". Most of their artillery was short-ranged as well.
At 5:45AM of May 1, 1898 American Admiral Dewey decided to launch an attack. He issued the most famous order of the Spanish-American War. Turning to the Captain of the heavy cruiser Olympia, he said "You may fire when ready, Gridley!". U.S. ships fired heavily at Spanish fleet from a long distance. Most of the return fire from Spanish ships fell short of the Americans. In less than 2 hours the Spanish fleet was in ruin. As a result of the battle all the Spanish ships were sunk or destroyed. Spain lost 167 killed. For the Americans, not a single ship was disabled. The only casualty of the day was the death of the engineer a victim of heat stroke.
US main priorities were technology and proper personnel training. American sailors were praised for "accuracy and rapidity of their fire". Spanish soldiers were praised for their unquestionable heroism in the battle. The attempts to combat modern technology with heroism led to a lost battle with vast casualties and damages.
US government takes responsibility for the health of the U.S. population very seriously. And science and technology are the main means used for this battle. The fight against smoking was one of the hottest topics for the last couple of decades. First Surgeon General's Report on Smoking and Health was released in 1964. On the basis of more than 7,000 articles related to smoking and disease that were available in biomedical literature, the report concluded that cigarette smoking is a cause of lung cancer and laryngeal cancer in men, a probable cause of lung cancer in women, and the most important cause of chronic bronchitis.
The report stated "Cigarette smoking is a health hazard of sufficient
importance in the United States to warrant appropriate remedial action." From that time all branches of government at all levels became involved in the battle. "Remedial actions" included, but were not limited to, special labeling, advertising restrictions, smoking bans, cigarette taxes and legal actions against tobacco companies. For example, in 1965 Congress passed the Federal Cigarette Labeling and Advertising Act, requiring the appearance of a health warning on all cigarette packages: "Caution: Cigarette Smoking May be Hazardous to Your Health." In 1966 the Health warning label appeared on all cigarette packages. Multiple actions were also taken at the State and local level. Results
of such actions were quite significant. For example, smoking prevalence among men fell from 52% in 1965 to 28% percent in 1994.
The campaign against smoking demonstrates that the U.S. Government and society trusts science, they care about health and are ready to take prompt actions based on scientific conclusions. These actions are diverse and taken by different parts of the society demonstrating deep and widespread trust in science among the population. The fight against smoking was not an easy task.
Smoking is addictive and represented long-term traditions; powerful tobacco industries did not give up without vigorous fights. However the trust in science and health concerns overbalanced other considerations.
Of note, tobacco industry is not the only one affected by scientific research. For example, reports that obesity has become one of the most serious health problems in the U.S. adversely affected the fast food industry but supported enormous growth of sport-related industries. One could thus conclude that trust in science and readiness to act in accordance with scientific conclusions has a dramatic influence on different sectors of economy.
Pride, respect and benefits for the public
Another factor that serves U.S. biotechnology well is emotional support.
Biotechnology is the darling of the American public. Americans are proud of it. They love to be the leaders. Leadership position in biotechnology lacks the controversy of superiority in other fields. For example, military superiority is much more controversial. It is difficult if not cruel to justify superiority when the cost for it is a huge "apparent draining of resources", loss of lives etc. Biotechnology provides a lot more "obviously apparent" benefits to average members of the society than, for example space research that sends men to the moon.
Biomedical research is considered as one of the most efficient investments this society ever made. Leadership in biotechnology provides the country with non-controversial respect from all over the world.
Economic benefits
U.S. runs a substantial trade deficit. Trade imbalance reflects problems that U.S. economy experience in competition with other countries. Higher labor costs, stricter environmental standards and other governmental regulations are the most frequently cited reasons. As these reasons are hard or unreasonable to change, competitiveness of the U.S. economy has to be improved by other means. Modern
technology remains the favorite choice in this regard.
Biotechnology exports are much less problematic than the export of other products like military equipment. Likewise, import of drugs and medical equipment by importing countries may be supported by humanitarian reasons. These humanitarian reasons in many cases overrule commercial, economic and regulatory ones.For example, countries such as India do not impose tariffs on life-saving
medicine providing financial benefits to the exporter. As the result worldwide sales of biotechnology products may have some financial, political and psychological advantages over other industries exports.
Governmental support of biomedical research which represents direct contribution towards biotech/pharma R&D, lacks the controversy of the Governmental subsidies to the other fields such as agriculture or steel industry where subsidies caused a lot of criticism.
Finally support of the biotech sector at each level increases the tax revenue base for the corresponding Government.
Main conclusions
At least 3 major societal factors contributed to enormous success of U.S. biomedical sciences, biotechnology and biotech industry.
1. Orientation towards technological progress. Trust to science and technology, reliance on them
2. Attention to the individual's interests and needs, with health as main priority
3. Willingness of deeply individualistic, capitalistic and democratic society to provide enormous power to the government for appropriate cause. Nevertheless the picture is not as rosy as it appears. U.S. biotechnology and society in general face a lot of problems. Some of them we will discuss in the next parts.
(Concluded)
-- The authors are research scientists based in the United States.