This won't hurt a bit
Alex Lash and Cheryl Meyerby Alex Lash and Cheryl Meyerfrom The Deal.com
In any other year, healthcare and the $2.2 trillion Americans spend on it each year, might have been the signature issue of the 2008 election. But a funny thing -- several, actually -- happened on the way to the voting booth: the worst financial crisis since the Great Depression, mounting evidence of perilous climate change, the military overextended in two wars.
Healthcare still got its play, of course. Talk this year usually centered on the high costs to average citizens and government coffers. Medical bills cause more than half of personal bankruptcies. But a host of other related problems were also on the table: the nurturing of today's basic science, the extent and wisdom of safety regulations and the health industry's power to shape our public policy.
In the following story, we break the healthcare world into five pieces and examine the twin effects of President-elect Barack Obama's and the Democratic Party's surge on Nov. 4 and the looming recession with its as-yet unknown bottom.
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This won't hurt a bit
The Supreme question
State of confusion
This won't hurt a bit
The Supreme question
State of confusion
First, we look at sources of funding for the early stages of medical research -- the National Institutes of Health and venture capitalists -- and lay out their concerns for the next couple of years. Then we examine the fate of the struggling pharmaceuticals industry, especially Big Pharma, which, after years of getting its way in Washington might now face more opposition. Next is a look at Obama's chance for major changes. Then comes the Food and Drug Administration. Woefully underfunded, it stands to get a lot more cash. Finally, there is the Supreme Court's take on healthcare, with a spotlight on the current Wyeth v. Levine, the so-called pre-emption case, in which a guitarist whose arm was amputated after an improper injection of Wyeth's anti-nausea drug is suing the drugmaker. The case could have a profound effect on the drug industry and beyond. How will the justices rule -- and how much will the new president be able to reshape the court?
THE EARLY STAGES
Where will the money come from? Like thousands of scientists-turned-entrepreneurs, Erik Schwiebert asks that question every day. The former University of Alabama at Birmingham researcher is scrambling to push his startup, Discovery BioMed Inc. of Birmingham, past the seed-funding stage even as investors and government funders, two potential sources, face a fierce economic headwind.
"I can't imagine starting up right now what we started a year or two ago," says Schwiebert, who says he has raised $1.2 million from a local venture fund and with only a year of operations behind him hopes to hit six figures of revenue next quarter.
Like so much biotech research, Schwiebert's work -- genetically tweaking diseased human tissue into "immortalized" cell lines that can survive in a lab and be used as a test bed for drugs -- has also benefited from government funding. In Schwiebert's case, it's a $100,000 small-business grant for his startup, with more perhaps to come.
After the nearly $70 billion in annual industry research, the next highest source of funding comes from the National Institutes of Health, which makes up 75% of the government's health research budget. But as the industry continues to pare research, NIH becomes even more crucial in feeding the earliest exploratory work. Most NIH money goes to its own labs, to academia and to other nonprofit research, though some is funneled into small-business grants such as Discovery BioMed's. That work flows downstream into venture-funded startups and ultimately into drugs, devices and other healthcare products. Continued...
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