There are multiple examples of federally funded new healthcare initiatives leading to economic breakthroughs that have revolutionized daily life, put thousands of people to work and earned billions of dollars for Americans. Unfortunately, Wall Street has focused the healthcare industry on meeting today's earnings per share (EPS) demands instead of focusing on the challenges to create what is needed for tomorrow's healthcare requirements. This has resulted in neither the innovation that will be needed or even in meeting the future EPS demands. Large pharmaceutical companies are struggling to maintain their current operations by reducing or even eliminating research programs. Hospitals are increasingly financially challenged. Physicians and other healthcare professionals now work longer hours at compensation levels that bring into question the value of the many years they committed to their training.
The federal government is the only entity that has the resources to foster the technology that will achieve the breakthroughs to sustain high-quality medical care in the U.S., cut costs and sustain healthcare industries. The government already acts as the de-facto standards-setter for medical care through the Centers for Medicare and Medicaid Insurance, which decides the procedures and medicines that will be covered by health insurance and how much can be charged for each. But that is primarily a cost-cutting activity and there is an adage in business that you can't grow a business solely by cutting costs.
Compared to the potential benefit, the current investment in healthcare research is small and should be increased significantly. Research programs given the backing of agencies that most Americans only know by their initials have become the backstop of medical innovation with new Commercial Pharma, Biotech, and Medical Companies as the outgrowths of this funding. For example, the anti-cholesterol medication, Lipitor, the biggest selling drug of all time, came into being because of National Institute of Health (NIH) federal funding that identified LDL receptors.
Between 2003 and 2010, U.S. sales of Lipitor were more than $47 billion. Lipitor, and other drugs, biologics and medical devices that were made possible by federal funding have improved the quality of life for millions, provided jobs for thousands and created tremendous economic benefit to the U.S.
Just to make obvious that this process is still vibrant, an example of breakthrough technology funded by the Defense Advanced research Projects Agency (DARPA) (the scientific military collaboration agency) can be used. DARPA invested for a legitimate military need in a mechanized back support system called the exoskeleton (more equipment carried caused back problems, both short and long term impacts for soldiers). A start-up company, spun out of an academic institution brought the concept to actual practice, filling a military need and creating a whole new market. What is potential healthcare application? The 68 million people wheel chair bound worldwide which would dwarf any possible military usage.