Last year, the Life Sciences Discovery Fund (LSDF) was defunded. 2015’s legislative session was shaped by a squeeze for education spending and a transportation package that did not leave appetite for renewing LSDF funding.
The 2015-17 state budget shifts $11 million from the LSDF to the state’s general fund, and also diverted $51 million that the LSDF would have received between 2016 and 2017. Support for the life sciences sector took a hit in 2014 as well, when tax incentives (first enacted in 1994) were not renewed. 40 other states offer R&D tax credits and other incentives that help the life sciences sector.
What is the LSDF?
The LSDF was established in 2005 by former Governor Christine Gregoire to invest in life sciences research and technology commercialization. LSDF operates as a vehicle for carrying new companies through the so-called “valley of death”– the perilous time during which an innovation moves from lab to the market.
The LDSF has served as a crucial resource for small and big projects alike. Large institutions like University of Washington and Fred Hutchinson Cancer Research Center are excellent at attracting federal grants for research. However, once researchers wish to take their work to market, and possibly start a business, funding opportunities taper off. For small, tech-based companies, it can be difficult to attract private venture capital, which makes the LDSF even more critical. Approximately 40 startup companies formed or expanded in Washington with the help of LSDF grants.
Now the Life Sciences Discovery Fund has $2 million left in its treasury account, which will be used for a grant competition called the Life Sciences Ecosystem. The fund’s website claims that LSDF grantees have produced a 7:1 ROI to Washington State. LSDF grants and follow-on funding are responsible for at least $67 million in health-care savings, over 3,500 jobs, and at least $1 billion in statewide economic activity.
It’s the economy, stupid
The LSDF goes beyond advancing public health, it’s long driven economic growth as well. The Life Science & Global Health sector is emerging as a pillar of Washington’s economy. It is made up of 191 biopharma companies, 294 medical device companies and 78 non-profit research institutions, spread throughout over 70 Washington cities.
Via the Governor’s OfficeThe life sciences and global health sector is Washington’s fifth largest sector with an average salary of more than $80,000. The state Department of Commerce conducted an analysis and determined that Washington’s life sciences and global health sector is growing, though not as fast as competitor states. For example, research funding to Washington from the National Institutes of Health continues to lead most other states, topping $906 million last year.”
According to Washington’s Department of Commerce, the state’s science and global health sector is responsible for $11.1 billion of the state’s gross domestic product (GDP). Employment in this sector tops 34,000 direct jobs and another 57,000 indirect jobs, making it the 5th largest employment sector in the state.
Other state’s clearly see the value of investing in life sciences, and, unlike Washington, they are scaling up their efforts. States such as Pennsylvania, Indiana, Texas, California, and Massachusetts are investing to grow the sector as part of their economic development strategies.
Unfortunately, what is happening in Washington State is part of a larger phenomenon. Nationally and even globally, R&D for life sciences is shrinking due to cuts in “discretionary spending” beginning in 2011 and continuing with the sequestration of 2013.
The largest federal funder of life sciences research, the National Institute of Health, is suffering. Since 2004, the NIH budget has decreased by more than 20 percent
Looking forward
The fate of the LDSF has left many wondering if lawmakers truly understand the value that life sciences research brings to society. During the 20th century, life sciences research led to control over many parasitic and infectious diseases, eradication of smallpox and other scourges, and protection against killers like polio and measles. These advances were fuelled by scientific discoveries made in basic research – the 20th century saw everything from the discovery of antibiotics to the sequencing of the human genome. These feats would not have been possible without public investment and the creation of public agencies like the NIH and the NSF.
Look at the April 2015 Crosscut guest op-ed jointly written by former Governor Christine Gregoire (D) and U.S. Senator Slade Gorton (R): State Legislature must step up on cancer research. The two authors identify with different political parties, but they share a concern for Washington’s life sciences research funding.
“As other states make significant public investments in cancer programs,” they wrote, “our state’s institutions and life sciences industry are at a competitive disadvantage. Most significantly, our patients are getting left behind.” The opinion piece was written a couple months before the Legislature axed LSDF funding. Gregoire and Gorton’s concerns with underfunded life sciences research are more salient now than ever before.