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"Life Sciences in Massachusetts: Forging Connections to Lead in a Changing World"

EXECUTIVE SUMMARY

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Maintaining leadership in a changing world
Thanks to its unique cluster of leading companies, universities, medical centers, capital, talent, and government agencies and officials, Massachusetts is among the world's premier centers for the life sciences industry. The Commonwealth sets the pace in a wide range of endeavors, from biotechnology and next generation pharmaceuticals to devices, diagnostics, tools and equipment.

Given its natural advantages, Massachusetts is in a good position to benefit from dramatic growth in the industry in the next decade and from the changes that will result from new technologies over the longer term. But the state will miss several of these opportunities if it fails to adapt to dramatic changes now taking place.

We see five major forces shaping the industry today that will have an impact on the viability of a life sciences cluster in Massachusetts: globalization and the increasing power of competing clusters; economies of scale and scope driving industry consolidation; pressures to reduce the costs of healthcare; the emergence of personalized medicine; and the convergence of technologies and disciplines.

MA is competing with new and fast growing innovation clusters around the world. New life sciences clusters in the U.S., Europe and Asia are attracting talent, capital and, the interest of large pharmaceutical firms. As healthcare companies look to consolidate operations and pursue acquisitions to broaden their product portfolios, many are reluctant to consider the Commonwealth, given the relatively high costs of doing business here.

As payors become more cost-conscious, they will continue to put pressure on prices, especially for pharmaceuticals, medical devices, and diagnostics. This trend disproportionately affects producers of high-cost therapies, which is a large segment of the Massachusetts industry. Any increase in price pressures adds to economic challenges producers face as a result of dramatically increasing development costs. On the other hand, there are forces at work that would improve Massachusetts' position of relative advantage.

Personalized medicine offers the promise of more effective targeted therapies and it is hailed by many as the future paradigm of healthcare. Massachusetts' research strengths position it well to benefit from the new approaches to development and application that personalized medicine promises. Yet although Massachusetts enjoys a disproportionate lead, the state will need to make a more deliberate effort to harness its strengths to continue to retain that lead. Likewise, Massachusetts is well positioned to lead the convergence of engineering, information technology and life sciences, and the convergence of drugs, devices, and diagnostics. In both cases, however, decision-makers must promote cross-disciplinary and cross-institutional collaboration.

A vision for life sciences in Massachusetts
To build on its success and continue growing its economy and employment base, we propose that Massachusetts adopt three aspirations for its life sciences sector over the coming decade: become the global hub for life sciences talent; achieve global leadership in generating financial capital and intellectual property in the life sciences; and become even better at attracting new life science companies while nurturing those already here, so that a core of companies scale up and maintain their headquarters in the state.

These aspirations represent a strategic choice to build on existing strengths in research and development. We recommend this choice because we see enormous value in innovation in the life sciences and we believe the state is uniquely positioned to meet emerging global challenges in the field.

Success through collective action
To compete with the likes of Silicon Valley, San Diego, and North Carolina, as well as offshore clusters in Switzerland, India and China, Massachusetts will need to choose a destination, set a clear course and harness all of its collective resources. Government, industry, academia and capital will need to work together better to leverage their respective contributions. And given that their resources are limited, and that each constituency has its own priorities,, they will have to focus on a narrow set of initiatives.

Collective action has the greatest impact when there is some kind of "market failure," where the private motivations of individual constituents leave valuable opportunities unexploited. This kind of failure can occur for a variety of reasons, most commonly because no single constituent will make an investment without assurances that other constituents are going to make investments as well.

We see symptoms of such market failure in the Massachusetts life sciences cluster, including barriers to collaboration within the state, underexploited collaborations with other life science hubs and lack of investment in human capital. Under the broad themes of enhancing collaboration and human capital, we propose a multi-tiered approach to increase the Commonwealth's competitiveness in the life science sector. The primary goal for Massachusetts is to leverage its assets as a knowledge hub. It can achieve this goal by increasing coordination and developing its talent base.

Leverage Massachusetts as a Knowledge Hub Massachusetts should leverage its knowledge base by supporting collaborations within the life sciences sector and across industry clusters. We propose two concrete initiatives to foster collaboration and increase global competitiveness:

• Promote "translational medicine" as a mechanism for academic-industry collaboration: Create a translational medicine center (TMC) to overcome cultural inertia against collaboration across academia and industry and enhance the state's position in translational research. The TMC would evaluate proposals for collaborative research undertaken by Massachusetts institutions and local research operations, whether they are mounted by Massachusetts companies, such as Genzyme, Biogen Idec or Boston Scientific, or by out-of-state or foreign entities with operations in Massachusetts, such as Novartis, BMS, Pfizer or Merck.
• Network with other clusters to take global leadership in innovation and knowledge development: Work together to build connections with existing and emerging life science clusters, such as those in New Jersey and the European Union, as well as emerging clusters, particularly in India and China, consistent with the themes of talent development, healthcare policy and delivery, and local industry development.

Pool Resources and Enable Coordination

• Unify the IRB to increase clinical trial activity: Develop a unified, multi-medical-center institutional review board (IRB) to streamline clinical trials and make Massachusetts a more attractive location for research.
• Coordinate tissue banking to accelerate research: Expand, enhance and coordinate existing tissue banking activities to make Massachusetts the world's primary pre-clinical research center. Coordinating the activities of area hospitals would create a large virtual tissue bank with standardized permissions, cataloging, storage and retrieval. Researchers could then search across multiple institutions simultaneously, place a single order covering samples from multiple institutions, and be confident that every sample will be of high quality and uniformly prepared. Such a bank would provide researchers with access to a broader sample pool and speed research.

Develop a Broad and Deep Talent Base

• Broaden the talent pool to help the cluster expand beyond research and discovery: Close the mid-level talent gap with targeted investments in community and state colleges and the UMass system, involving industry in curriculum design and awareness-building.
• Nurture the next generation to ensure that there is future talent pool: Develop Pre-K-12 outreach programs to improve the long-term, in-state talent pipeline, leveraging scalable learning platforms and industry input for awareness-building.

We recognize that several hurdles stand in the way. Key constituents may question why these initiatives should be pursued or point to other priorities. We have highlighted specific ways to address these concerns and make these initiatives "actionable". This report describes our research and presents our recommendations for improving collaboration (both within the core LS cluster and with related clusters, e.g. IT and materials science), building human capital, recruiting and retaining life sciences companies, and enhancing infrastructure. We include data from our interviews with leaders in the life sciences sector (executives who lead the companies that make up the cluster, leaders of the academic institutions and a broad range of thought leaders), economic research, industry feasibility studies, and competitive research. We have identified big, exciting opportunities within the Commonwealth's grasp-opportunities not only to thrive financially but to provide the world with lifesaving products and innovations and inspire and attract the brightest of minds. These are worthy goals indeed, and they should inspire us all to work together. We take great encouragement from the initiatives that emerged as this report was being completed, including especially the Governor's 2007 Life Sciences Initiative. We hope that this report will add to the momentum gathered behind grasping opportunities in the sector.

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