Lilly CEO: "US is Losing it Edge in Life Sciences Innovation"
John Lechleiter, PhD, chairman and CEO of Eli Lilly & Co. today told members of the Detroit Economic Club that the US is losing its competitive edge and that “evidence is mounting for an innovation crisis in the life sciences”
Lechleiter blamed the crisis on US tax and immigration policies over the last 10 years that have reduced research and investment funding and driven away foreign-born, U.S.-trained scientists.
He also attributed the problem to the US Food and Drug Administration’s new emphasis on drug safety. “The FDA approved 92 drugs the last five years. That is the lowest of any five-year period,” he said. “We lose patent protections (on brand name drugs) and that is $100 billion less revenue for the industry and less for research and development” said Lechleiter. Further, he said that “American drug companies still spend 40 percent more on research in development in the U.S. than in other parts of the world.”
To avert the crisis, Lechleiter suggested the following:
- Increase and improve education for students in math and science
- Change immigration laws to allow more H1-B visas for scientists and ease the process that allows immigrants to gain green cards to work in the U.S. The last time the H1-B visa cap was raised was in 1990
- Increase federal funding for pharmaceutical and basic science research, which has declined over the last five years
- Change tax policies to provide more incentives for research and development. The U.S. lags behind the rest of the world in offering R&D tax credits, he said. Moreover, the U.S. should not tax foreign subsidiaries of U.S. corporations
Lechleiter, who was trained as a chemist, is the only CEO of a major pharmaceutical company who holds a PhD degree. Therefore, his ideas resonate more for me than those of his business-only CEO counterparts. To that end, his suggestions regarding improving math and science education, immigration reform (which I have long contended is killing US competitiveness) and increasing federal funding for research make sense. However, the notion that US tax laws and lack of corporate tax incentives is stifling American innovation and competitiveness is pure hogwash.
While corporate tax rates may be higher in the US than elsewhere, there are so many loop holes that most corporations pay less than their share fair. Further, let’s not forget that the personal income tax rate is much higher in the rest of the developed world than it is in the US. It is just so “American” to not want to pay taxes and then demand and expect government services at no cost to the taxpayer (at least in Europe they pay high taxes and get good services). And, let's not forget that despite their heavy tax burden it was American corporations not foreign ones that caused the recent global recession.
That said, I gotta give John some credit for his suggestions; three out of four (or a .750 average) isn’t bad in baseball or the pharmaceutical industry!
Hat tip to Ed at Pharmalot
Until next time...
Good Luck and Good Job Hunting!!!!!!
