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If you had infinite foresight and knew a pathogen like Covid-19 was coming, what would you do to prepare? You’d certainly stockpile N95 masks and ventilators. But you’d also invest billions of dollars, or perhaps even trillions, in biopharma research and development to get ready to fight back.

The latter is exactly what we have done. Since 1995, businesses and government agencies have spent almost $2 trillion on health-related R&D in the United States alone. From that spending has come a series of scientific and medical successes, including the sequencing of the human genome, the taming of HIV, a cure for hepatitis C, the slow rollout of gene therapies, immunotherapy for cancer, and more.

And yet, the real promise of “The Biotech Century” — a deeper understanding of human biology so new treatments can be developed faster, cheaper, and with fewer failures — never panned out. Instead, the cost of drug development just kept rising, and only 14% of drugs that enter clinical trials eventually get approved. — maybe even fewer.


There’s no agreement on why scientific advances have not translated into lower costs and faster drug development and the full flowering of the Biotech Century. There are three leading hypotheses that aren’t mutually exclusive:

  • The intricacies of medicine are a lot harder and more complicated than first thought.
  • The profit motive could be diverting biopharma firms from truly important research and development.
  • Excessive or misdirected regulation could be slowing down biotech innovation.

I have argued in favor of the third one: that well-intentioned government regulation systematically impeded disruptive innovation in the biosciences.


A disruptive innovation, according to Clayton Christensen, the Harvard academic who coined the term and who died in January, starts out as less capable than existing technologies but, as the innovation evolves, becomes both less expensive and more powerful.

The first automobiles, for example, cost more than a horse and were less reliable. Similarly, the first personal computers were basically toys compared to the existing minicomputers and mainframes. But they got better and cheaper over time.

Or take cellphones. When they were first introduced in the 1980s, they were bulky, heavy devices that retailed for $4,000, provided terrible reception, and could barely fit in a briefcase, much less a pocket. By any measure, they were inferior in phone quality to existing wired telephones. Today, most people have given up their landlines in favor of mobile devices.

From this perspective, it’s clear that a government regulatory body with “too-high standards” can choke off innovation and stifle the biotech century. Imagine how different the history of computing would have been if Steve Jobs and Steve Wozniak had to prove that the Apple I could meet government performance standards before it could be sold.

FDA standards require both safety and efficacy, meaning that a drug or medical device must perform better than existing alternatives, or at least just as well. That reasonable requirement systematically blocks disruptive innovations, in Christensen’s sense, by running everything through a single funnel and slowing things down.

I have to be honest here. Even though I favor the regulatory hypothesis, I can’t dismiss the other two alternatives out of hand. Science is hard.

But along comes Covid-19 and the biotech R&D engine has been opened up to full throttle. Multiple vaccine candidates and multiple potential treatments have been put into development in parallel around the world.

Faced with the pressure of a global pandemic, profit motives and regulatory barriers are falling by the wayside. Researchers and companies are sharing intellectual property rather than hoarding it. Regulators are accepting higher levels of risk. For example, a Covid-19 vaccine candidate, from Moderna, is being tested for safety in human volunteers before testing its safety and efficacy in animals, flipping the usual order and despite the fact that, as the New York Times wrote, “no vaccine made with this technology has yet reached the market.”

With any luck, the global search for Covid-19 vaccines and treatments will be fast and successful, multiple times over, saving millions of lives and avoiding trillions of dollars in economic damage.

As these tests proceed, we will also learn something important about progress and innovation. Under ordinary circumstances, people want assurances that a new drug or medical device is safe and will work at least as well as the alternatives.

But these are not ordinary circumstances. The tragedy of the coronavirus pandemic is forcing us to try things and make decisions that we would never do in the normal course of affairs. We are in uncharted territory, and there are no guarantees. We could learn that the regulators were right, and disruptive innovation is the wrong model for medical science. Or we could learn that medical science has advanced far enough to produce vaccines and treatments for new diseases in far less time than normal.

And that would be the true dawn of the Biotech Century.

Michael Mandel is the chief economic strategist for the Progressive Policy Institute and a senior fellow at the Mack Institute for Innovation Management at the University of Pennsylvania.