Blog: Stephen Rapundalo

Stephen T. Rapundalo, PhD. is the Executive Director of MichBio, the main trade organization for Michigan's life sciences and biotechnology industry. He will be writing about what Michigan can and should do to foster and improve its life sciences industry.

Post No 3: Regulation And Resources

I’m often asked what precipitated the downsizing of Pfizer in Michigan, and in particular, its decision to close the Ann Arbor R&D facility. Indeed, a member of the state’s congressional delegation inquired that of me just week and a half ago whiles both of us attended the Mackinac Policy Conference. 

Obviously, the true answer lies within the hallowed corporate halls of Pfizer in Manhattan, but it’s safe to say that a number of elements perhaps contributed to their decision-making.  In essence, it’s the business and regulatory environment here in Michigan. 

The pharmaceutical industry has been targeted by state and federal lawmakers in Michigan who favor more restrictions on companies arguably on behalf of Michigan consumers. In past years, the focus has been on drug reimportation and pricing.  More recently, the push has been to open the flood gates to frivolous litigation by repealing the state’s FDA drug immunity laws, and create added bureaucracy to oversee unreasonable drug disclosure and marketing restrictions. The latter is currently working its way through the House and would require pharmaceutical sales reps to register with the state, disclose any incentives, support and promotions to physicians and pharmacists of over $50, and institute fines of $500,000 for violations. 

Talk about a disincentive for companies to do business in the state! Throw in the new MBT that is causing considerable bottom-line headaches for companies large and small, especially those in the contract services sector, and you begin to appreciate how tough it is for life science companies to succeed. 

Michigan legislators need to learn that a more favorable regulatory environment and finding ways to help life science companies lower the costs of research and development, and thereby lowering the cost of the pharmaceuticals themselves, will better serve their constituents in the longer run. Michigan will continue to be viewed as an unfavorable business climate in which to build and expand their research facilities and manufacturing sites as long as Michigan’s legislators continue to estrange the pharmaceutical industry. Lower drug costs might play well at election time, but they do not serve Michigan’s future. 

If we truly want to deliver on the rhetoric heard at the Mackinac Policy Conference and provide resources, incentives and support to our life science companies, than legislators should turn to more constructive reform. Certainly, that’s a message that I carry on behalf of MichBio and its member companies any time I interact with policymakers. Some get it, many more don’t. MichBio will continue to further educate legislators through its Biotech Legislative Caucus and other means like last week’s PhRMA Capitol Day, and direct interactions. 

Other states and countries learned long ago to foster linkages between industry, academic research centers, and the investment community. Most importantly, Michigan’s competitors understand that it’s good business sense to make easily accessible all of the resources necessary for a start up company to succeed. We have many of the resources available to make this happen too, and now only need the political will to foster a more positive regulatory environment and business-friendly inducements.