Innovation — often a key factor in determining if a biotech drug will emerge as the next blockbuster — is difficult to measure quantitatively. The Santa Monica, Calif.-based Milken Institute — a not-for-profit, nonpartisan economic think tank — has developed a tool to measure innovation. Termed the Biopharmaceutical Innovation Pipeline Index,” it measures innovation and compares states’ abilities to provide a successful climate for biotech industry growth.
What makes one region more desirable than another, and how does the level of innovation in one area compare with another? What makes a region successful at bringing new products to market? The Milken index cumulatively measures four key areas that affect the biotech industry — research funding, risk capital funding, human capital and labor, and biopharmaceutical innovation output. To bring a medical breakthrough to market, research funding and risk capital funding are essential in providing monetary resources to emerging biotechs. More important is an educated workforce to develop that blockbuster product. Finally, biopharmaceutical innovation output measures tangible biopharmaceutical assets that are emerging or will emerge from a particular region.
The report emphasizes that a state’s ability to attract and retain biotech companies is linked to its ability to provide strong research incentives, skilled labor, and timely funding and grants — a difficult task considering the associated economic demands.
Massachusetts achieved the highest score, based on its large and tightly knit biotech presence, generous human capital assets that flow from two top research universities — Harvard and MIT — as well as numerous independent and hospital-affiliated research labs. Of the 10 top-ranked states in the Milken study, 7 are in the Eastern United States.
Relative scores (100=top) indicate a state’s strength in providing research funding, risk-capital resources, and a skilled workforce, coupled with its biopharmaceutical output.
SOURCE: “BIOPHARMACEUTICAL INDUSTRY CONTRIBUTIONS TO STATE AND U.S. ECONOMIES,” MILKEN INSTITUTE, SANTA MONICA, CALIF., 2004