In pursuing a strategy of Making America Great Again, the current administration is unleashing executive orders and policy proposals in a rapid and decisive way. Every part of the economy is being challenged to contribute to the President’s goal, including the biopharmaceutical sector - the collection of companies that discover, develop, and commercialize therapeutics and medicines for patients in the U.S and around the world. At the IQVIA Institute, which contributes evidence-based research to the public domain for use by all stakeholders, we have a unique perspective on how this sector works, where it can be improved, and what it will take to contribute to the strengthening of America.
Biomedical research leadership and contributions
Main Takeaways
- The current administration is issuing executive orders and policy proposals that challenge the biopharmaceutical sector to directly contribute to the President's goal of reducing disparity in international drug costs and bringing more production to the US.
- The unique ecosystem of the biopharmaceutical sector results in a multitude of scientific discovery platforms powered by a global talent pool that puts American scientists at the forefront.
- The American biopharmaceutical system is being challenged due to its reliance on offshore production sites for manufacturing.
The biopharmaceutical sector is underpinned by a unique ecosystem that combines public funding for basic research, university-led translational science, technology transfers, venture capital funding, partnerships with larger companies, and a relatively transparent and responsive regulatory system. It results in a multitude of scientific discovery platforms with robust dissemination of information, strengthened by intellectual property protection, powered by a global talent pool and funding markets that provide liquidity.
This ecosystem has put American scientists at the forefront of deploying gene editing tools, immunotherapy, monoclonal antibodies, CAR T-cell therapies, and other mechanisms and modalities. It has resulted in American companies being responsible for 46% of the 634 novel drugs approved globally over the past decade––twice the output of all companies headquartered in Europe.
Americans have the opportunity to access cutting-edge treatments through participation in clinical trials, which is particularly important for those with rare or advanced disease. The U.S. boasts more clinical trial sites and screened participants than any other country, further solidifying its leadership in medical research for the benefit of all. And Americans enjoy earlier access to innovative drugs following regulatory approval compared to those in other countries. Between 2020 and 2024, 273 novel active substances were launched in the U.S., one-third more than in the EU4+UK, and two-thirds more than were launched in Japan. The high awareness and education of healthcare professionals and patients about newly approved drugs lead to faster adoption and higher rates of use.
On top of the health and patient benefits, the economic impact of the U.S. biopharmaceutical sector is also substantial. In 2022, the sector contributed an estimated $1.65 trillion in economic output, including $800 billion in direct output and $850 billion through its suppliers and other sectors. Furthermore, the sector is responsible for the direct and indirect employment of 4.9 million Americans, demonstrating its role as a major employer and economic driver.
Areas requiring strengthening
Despite these contributions and strengths, it is important to recognize that the U.S. biopharmaceutical sector also faces several challenges––some of which are currently receiving heightened focus and attention. Dependence on offshore production sites for manufacturing, rising patient out-of-pocket costs, and increased barriers to access due to insurance design are significant issues. Additionally, the sector's focus on symptom management and late-stage disease treatment rather than prevention and early interception needs to be addressed. The rising competitive threat from China and expanded efforts by Europe to strengthen their biopharmaceutical positions also pose risks to U.S. leadership. Acknowledging that these issues are posing burdens on patients, our health system and the national economy––and that status quo approaches may not be adequate––are an important step to ensuring this sector contributes to the broader goals of enhancing America’s global leadership.
Initiative to sustain U.S. leadership
Several initiatives that address some of the identified issues and forestall competitor encroachment on U.S. leadership are necessary––all while preserving the core elements of the biopharmaceutical eco-system that have been successful to date:
Maintaining public funding for basic science is an important first step, but with an intensified focus on chronic disease, early disease interception, and understanding root causes.
Transitioning to more onshore production of key materials and active pharmaceutical ingredients through tax incentives and realistic timetables is crucial.
Addressing the "freeloading" of other countries by incentivizing sales outside of the U.S. and using America's negotiating power in trade relations can help ensure fair rewards for innovation.
Promoting provisions that simplify drug pricing, formulary plan design, and setting patient out-of-pocket costs are essential to eliminate market distortions.
Strengthening and modernizing the FDA and clinical trial environment to support innovation and clinical trial activity is also vital and will ensure the U.S. regulatory environment continues to be viewed as the gold standard by other agencies around the world.
Enabling the development of a learning health system that can improve system efficiency, enable value-based payments, and increase understanding of health outcomes by accessing interoperable data and fostering artificial intelligence learning loops while strengthening data security and handling standards.
Finally, creating an industrial policy to safeguard America's global leadership in biopharmaceuticals through public/private collaboration and monitoring systems will ensure enduring strength and ethical business practices.
The U.S. biopharmaceutical sector is a cornerstone of America's economic and healthcare systems. Its strengths must be defended and preserved even as its challenges are aggressively addressed.In this way we can collectively ensure that this sector plays a pivotal role in increasing America’s greatness and sustaining its global leadership.
Murray Aitken is the executive director at the IQVIA Institute for Human Data Science.
Read IQVIA's full report here.
