Mr. Chairman, distinguished colleagues, and guests. Welcome to San Diego, California.
America's finest city. I am proud to call this great city home and look forward to listening to our panelists and discussing how these innovative local companies can create jobs and grow our economy if we just get government off their backs.
Special thanks are in order for Tony Haymet for allowing us to use this location for our hearing.
Dr. Haymet is the Director of Scripps Institution of Oceanography, Vice Chancellor for Marine Sciences, and Dean of the Graduate School of Marine Sciences at University of California, San Diego. Not only is Scripps a beautiful campus, it is home to some of the most exciting research in the world.
California, and particularly San Diego, is home to many of the most exciting and advanced life science companies in the world. The San Diego life science cluster is one of the largest in the world. There are approximately 40,000 employees at more than 700 companies, including biotechnology, medical device, diagnostic companies, and research institutes. San Diego is internationally recognized for its innovation, producing some of most important discoveries in the world.
It is no secret that the best markets are the freest markets. Removing government barriers to job growth is necessary in any business, whether it be in a biotech company looking for the cure for cancer or a device company making an artificial pancreas for a diabetic. Unfortunately, we have seen the FDA put up roadblock after roadblock for companies looking to expand their businesses and develop the next great breakthrough.
According to the California Health Care Institute (CHI), delays in the FDA regulatory process have alarmed the entire U.S. biomedical industry. For new drugs and biologics, average review times increased by more than four months. This uncertainty has lead to a decrease from investors who fear FDA's policies will impede development.
According to our witness today, Sharon Stevenson, between January and June 2011, venture capital investments in seed and first round medical device start ups declined by nearly 50 percent. This is a major decline in investments that can go towards creating well paying jobs that may someday lead to major breakthroughs. But a lack of certainty from the FDA is hindering investment.
It is not only the delay in approval that is alarming; it is the very culture within FDA that I find disturbing.
We must do more to empower the patients to be part of the entire FDA process: we need to review the conflict of interest rule so that we may have the best and brightest reviewers even if they have industry experience. We need to make the research and development tax credit permanent. We need to lower the corporate tax rate for companies who want to bring money back from overseas. We need the public and private sector research entities to work together to advocate for one another.
The San Diego region contains the best and brightest America has to offer. These innovative companies have the potential to turn our economic climate around. We need to help them by providing a clear path free of government interference. Thank you for taking the time today to tell your story.