Reece Armstrong examines the life science sector in North America and how innovation is at the heart of the market.
For medical device companies in the US, the start of 2018 was marked by an ongoing campaign to halt an industry-wide excise tax before first payments were due. US politicians and medical device OEMs led the charge against the tax, stating it would be responsible for a loss of jobs and would stem innovation in medical technologies.
The strong opposition resulted in US Congress agreeing to pass a stopgap bill for the medical tax, which is now set to resume on 1 January 2020; a minor victory for an industry which is still actively trying to repeal the medical device tax. In fact, the most recent vote by the US House of Representatives saw strong bipartisan support to fully repeal the tax.
It seems that the threat to jobs and product development in the sector seemed to be too risky and with good reason - with a medical device market of $155 billion1, the US is a world leader for life sciences and some of the most exciting developments regularly come from overseas.
The history of life sciences innovation in the United States can be traced all the way back to 1848 with the founding of the American Association for the Advancement of Science2. However, the foundations of the United States’ approach to government and academic partnerships wasn’t apparent until after the second world war and the creation of the Research Triangle Park in the 1960s. Built in North Carolina between the region’s three universities, the park then saw technology giant IBM build a research facility3 there which has since contributed to the creation of over 40,000 jobs and 1,500 companies. The nation’s efforts to invest within life sciences has paid off and the US is now the global leader for the industry. Here are some of the areas in which the US is excelling within the industry.
Advanced academia
The US has many major life sciences firms active within its borders but some of the most important developments are being made within the country’s academic establishments.
On the west coast, universities in California are utilising polymers, 3D printing and wearable technology to develop new ways at monitoring both the brain and the stomach.
Researchers at the University of California at Berkeley and the University of California at San Diego have developed a wearable device to monitor activity in the stomach. By utilising 3D printing, the team were able to produce an electrocardiogram (ECG) for the gastro-intestinal (GI) tract. The device consists of a 3D printed portable box connected to 10 wearable electrodes. Patients can use the system as well as an app to log activities such as meals and sleep. The device could lead to “new kind of medicine where a gastroenterologist can quickly see where and when a part of the GI tract is showing abnormal rhythms and as a result make more accurate, faster and personalised diagnoses,” according to, Armen Gharibans, first author of the study4.
Elsewhere, a team at the USC Viterbi School of Engineering have developed a polymer-based material which could help record activities in deeper sub regions of the brain – potentially furthering research into brain mapping.
Other advancements include a 3D printed tool for helping to scan for pancreatic cancer by include University of Washington; a miniaturised sensor which sits on the tooth to read alcohol, glucose and salt levels from Tufts University, and a device that can quickly detect cancerous tumours during surgery from the University of Dallas at Texas.
Life sciences hub
The most prominent region for life sciences companies in the US is Greater Boston, which has the largest cluster of the sector’s researchers in the country5.
The region has a number of academic institutions such as Harvard and MIT, but it is also home to companies such as Boston Scientific, Abbott and Philips.
Boston’s strong position in the industry largely comes down to a 10-year $1 billion investment in Massachusetts’ life sciences in 20086. This was to offer funding for things such as research grants, accelerators, infrastructure and also tax incentives for life sciences companies.
The results are obvious and Greater Boston now has the top three National Institutes of Health-funded hospitals in the US; one of the highest proportions of life sciences employment in the country and a high number of research and development establishments7.
More so, Boston is the hub to the Life Sciences Corridor (LSC), which runs through Massachusetts and includes over 450 companies within the industry. Within LSC is MassChallenge, the world’s largest start-up competition and accelerator. The accelerator has supported a range of start-ups across the healthcare industry and offers a range of access to lab space, manufacturing guidance, and networking within the digital health industry.
Digital Developments
The quantified world has meant that some of the biggest technology companies are now leading the charge in changing the landscape of healthcare.
In the US, this is made evident by the work the FDA is doing through its Software Precertification (Pre-Cert) Pilot Program.
Designed to help the FDA put in place the right policies to promote safe and effective digital health products, the program includes nice companies, including Apple, Fitbit, Johnson & Johnson, Pear Therapeutics, Phosphorus, Roche, Samsung, Tidepool and Verily.
The program gives the FDA access to data from the companies on the measures they are using to develop, test and maintain their products, as well as how they gather post- market data. The aim is to have the FDA examine the software or digital health developer rather than the product, to see if companies can submit less information than currently required.
Apple has a number of initiatives pushing the company towards being a potential big player in the healthcare space. The last year has seen the company develop healthtech-driven clinics for its employees, research irregular heart rhythms via its Watch Series in conjunction with Stanford Medicine, and have the first medical device accessory for the Apple Watch cleared for use by the FDA.
And with Amazon working on a secretive healthcare business, it will be no surprise if more major technology companies move into the sector.
What’s next
Recent research8 shows that the US is losing ground due to aggressive competition from competing nations. International competitors have been found to be artificially inflating the US trade deficit in the sector by relying on the government to purchase drugs and devices to limit US firms’ export prices. This is allowing other nations to benefit from better treatments without having to pay for costly research and development.
Funding cuts to biomedical research and potentially increased pricing policies are also negatively affecting the nation’s life sciences global position, especially start-ups.
ITIF senior fellow Joe Kennedy discussed the damages that would occur to the US if it were to lose its competitive edge in the life sciences industry: “Losing the competitive advantage in the life sciences would mean declines in jobs and incomes for many Americans and a larger trade deficit. Policymakers need to optimize policies affecting the life sciences sector so that the United States is in the best position to increase its global market share and competitiveness.”
Footnotes:
[1]https://www.statista.com/statistics/248676/projected-size-of-the-us-medical-device-industry/
[2]http://www.us.jll.com/united-states/en-us/Research/JLL-US-Life-Sciences-Outlook-2017.pdf?e89ae5d2-1063-4ad2-b303-bac0a93f4f1f
[3]ibid
[4]https://www.nature.com/articles/s41598-018-23302-9
[5]http://www.us.jll.com/united-states/en-us/Research/JLL-US-Life-Sciences-Outlook-2017.pdf?e89ae5d2-1063-4ad2-b303-bac0a93f4f1f
[6] http://budget.digital.mass.gov/bb/h1/fy10h1/prnt10/exec10/pbudbrief23.htm
[7] http://www.us.jll.com/united-states/en-us/Research/JLL-US-Life-Sciences-Outlook-2017.pdf?e89ae5d2-1063-4ad2-b303-bac0a93f4f1f
[8] https://itif.org/publications/2018/03/26/how-ensure-americas-life-sciences-sector-remains-globally-competitive