Health care innovation: progress report and focus on biotechnology

Abstract: Funding for biomedical research has shifted from government to the private sector. One reason is rapid expansion in the number and strength of U.S. biotechnology companies, which collectively spend more than $6 billion a year on biomedical research. Most of these companies are not yet profitable and therefore depend on flows of capital from private investors, Wall Street, and large pharmaceutical company collaborations. Investment in the new drugs, devices, and vaccines in this pipeline is sensitive to signals emanating from the debate on health care reform, suggesting that new federal policy will have a major impact on steering the type of innovation to emerge in the future.