SAN FRANCISCO, Jan. 10, 2012 /PRNewswire/ -- Access to capital, a burdensome and uncertain regulatory environment and lack of innovation and productivity in research and development are the biggest threats to the biomedical industry's growth over the next five years, according to biomedical company CEOs surveyed by CHI-California Healthcare Institute, BayBio and PwC US. The CEO Survey found:
Findings of the CEO Survey reflect issues being discussed throughout the biomedical industry by executives gathering in California this week, and provide an early glimpse into the 2012 California Biomedical Industry Report, due in February. The report, published annually by CHI, BayBio and PwC, provides a snapshot of the biomedical industry in California, the largest biomedical cluster in the world and the source of the greatest number of products in clinical development.
"As the center of biomedical innovation in the U.S., California's biomedical industry is a national treasure," said Gail Maderis, president and CEO of BayBio. "But the pace of R&D productivity and its global leadership position hang on the availability of capital to fund future innovation and a regulatory framework that is based on consistency and innovative technologies."
The CEO Survey found that biomedical companies in California have been resourceful over the past year in seeking diverse funding sources, divided almost evenly among government grants, angel investors, venture capital and licensing agreements and partnerships.
"Biomedical companies have long relied on government grants and venture capital to finance innovation, but funding sources are shifting and companies will need to adapt to a new reality," said Tracy Lefteroff, national life sciences partner, PwC US. "While venture capitalists and angel investors will continue to be an important source of funding, it has become increasingly difficult for biomedical companies to gain access to them. Alternative sources of funding are emerging, which highlight shifting opportunities and dynamics in life sciences innovation."
The CEO Survey found:
Regulatory Environment will Determine R&D Productivity
According to CEOs surveyed, FDA and regulation are the key issues affecting research and development. Eighty-one percent of CEOs also said that coverage and reimbursement issues are extremely important to the industry's ability to advance biomedical research, innovation and investment in California.
In addition, 80 percent of CEOs surveyed do not believe that U.S. FDA has the best regulatory approval process in the world, and three-quarters believe that within five years, another country could conceivably recreate the ecosystem that has made the U.S. the leading biomedical region in the world.
"Sound public policy and managerial and operational improvements at FDA, along with responsible congressional oversight, will encourage biomedical innovation and, ultimately, job growth here in California," said David L. Gollaher, Ph.D., president and CEO of the California Healthcare Institute. "Working collaboratively with other stakeholders, Congress, FDA and the biomedical industry can maintain the high standards of safety and effectiveness that address patients' need, while improving our ability to attract investment and grow in 2012 and beyond."
CHI and BayBio worked with PwC to collect and administer data for the 2012 CHI, BayBio, PwC California Biomedical Industry Survey. The survey was conducted in November 2011 and targeted approximately 100 companies that conduct business in California in the areas of pharmaceuticals, biotechnology, medical devices, diagnostics or medical equipment.
About the California Healthcare Institute
CHI represents more than 275 leading biotechnology, medical device, diagnostics, and pharmaceutical companies, and public and private academic biomedical research organizations. CHI's mission is to advance responsible public policies that foster medical innovation and promote scientific discovery. CHI's website is www.chi.org. Follow us on Twitter @calhealthcare, Facebook, LinkedIn and YouTube.
BayBio is Northern California's life science association, supporting the regional bioscience community through advocacy, enterprise support, and the enhancement of research collaboration. Its members include organizations engaged in, or supportive of, research, development and commercialization of life science technologies. Online at www.baybio.org. Follow BayBio on Twitter at @baybio.
About PwC's Pharmaceutical, Medical Device and Life Sciences Industry Group
PwC's Pharmaceutical, Medical Device and Life Sciences industry group (www.pwc.com/us/pharma and www.pwc.com/us/medtech) is dedicated to delivering effective solutions to the complex strategic, operational and financial challenges facing pharmaceutical, biotechnology and medical device companies. We provide industry-focused assurance, tax and advisory services to build public trust and enhance value for our clients and their stakeholders. Follow PwC Health Industries at http://twitter.com/PwCHealth.
About the PwC Network
PwC firms help organizations and individuals create the value they're looking for. We're a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.
© 2011 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
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