Speeches & Presentations

Lifespans and Livelihoods: The Human Dimensions of Medical Innovation

John C. Lechleiter, Ph.D.

Chairman, President and Chief Executive Officer — Eli Lilly and Company

January 14, 2010

Town Hall Los Angeles,

Los Angeles, California

Thank you, Jon [Goodman]. I'm delighted to be here. When I consider so many renowned figures who have appeared here over the years, I feel honored to have this opportunity to speak to Town Hall Los Angeles. I’m also very glad that this was scheduled for early January. It’s the best excuse I can think of to come to California and escape the bone-chilling cold that has blanketed my home state of Indiana for weeks!

[Pause]

We’re at the start of a new year and … depending on how you divide them up … a new decade – the “teens.” It’s a time of fresh starts, like those New Year’s resolutions we hopefully haven’t forgotten already.

Of course, as we embark on a supposed fresh start in this new decade, we bring some baggage with us. We face immediate problems such as double-digit unemployment and fiscal crises at the state and federal levels … and long-term challenges that include the rising costs of health care and retirement in an aging population … and growing pressures on the underpinnings of the American economy. Some pundits and prognosticators say America’s decline is inevitable. Of course, a decade ago, people predicted that Y2K would bring on the Apocalypse, and as we meet here there are always those predicting the “big one” that will finally send a big chunk of California into the Pacific.

But I’m optimistic about our nation’s successful journey through the “teens” and beyond … as long as we carry with us and safeguard the key to so much of our prosperity and health … and that’s innovation. It’s no exaggeration to say that innovation is the wellspring of California’s – and our nation’s – greatness. Whether cars or airplanes or rockets … or agriculture, computers or medicines … innovation has fueled unprecedented prosperity. California itself has brought the world the high-tech wonders of Silicon Valley … the “right stuff” that fueled our aerospace leadership … green technologies … a booming biotech sector … and of course, the movies!

At Eli Lilly and Company, we’ve staked our future on innovation. As health care undergoes radical transformation, we’re in the midst of the most sweeping changes in our company’s history … which involve a new structure and new ways to do R&D … all aimed at speeding the flow of new and better medicines to patients. It’s no exaggeration to say that every single day we’re intensely focused on cracking the nut of medical innovation.

But I’ve learned that we also have to keep making the case for innovation … to sustain an environment where new ideas can flourish … where innovative solutions can make life better for everyone … where creative thinking is nurtured and invention is rewarded … which all raises the question: Why do I have to defend innovation? What’s not to like?

Well, you see, it’s not that people oppose innovation, but they take it for granted … or unwittingly undermine the ecosystem required for innovation to flourish. I can tell you, based on the experience of a company that invests some $4 billion a year in R&D, innovation doesn’t just happen. And the conditions must be right – starting with the essential aspect of a society that appreciates and rewards innovation … which is why I’m speaking to you today.

We tend to think of innovation in terms of technology, science, labs … but innovation is essentially the application of human ingenuity to improve human life. To fully appreciate innovation, we have to see and understand clearly its benefits for humankind.

Today I want to draw your attention to those human dimensions of innovation. I’ll focus on bioscience innovation … speaking from the perspective of a research-based pharmaceutical company … but I believe my remarks will also apply more broadly to innovation of all kinds.

[Pause]

So let me begin with the first human dimension of innovation – lifespans. We’ve added a decade to lifespans in this country, just in my lifetime! Has there been any more important accomplishment in this period? A key reason why we’ve gained this extra decade is innovation. In fact, an independent study found that just one area of medical innovation – the launches of new medicines – accounted for 40 percent of the increase in life expectancy during the 1980s and 1990s.

Indeed, throughout the past century, medical innovation transformed the basic expectations of human life that had prevailed since the dawn of civilization.

  • More and more death sentences were lifted … think of antibiotics for infections, vaccines for conditions such as polio, and more effective treatments for a growing number of cancers. For example, the five-year survival rate for all cancers diagnosed between 1996 and 2004 is 66 percent, up from just 50 percent in the mid-1970s. More than 11 million Americans with a history of cancer are alive today.
  • Other dread diseases became manageable chronic conditions, such as diabetes, heart disease, and HIV/AIDS. Between 1995 and 2005, annual deaths from HIV/AIDS dropped 70 percent.
  • And countless maladies barely understood or described in 1900 … things like severe sepsis, osteoporosis, schizophrenia, and auto-immune disorders … are being brought to heel by medical interventions.

Six years ago, my predecessor, Sidney Taurel, spoke to this forum on the social implications of longer lives. Sidney made the point that we’ve added not only to life spans but also to what some call “health spans,” that is, years of life without a disabling condition. This means more people who are active, engaged, working, contributing to social progress in myriad ways.

We’re determined to keep this progress going. Today, America’s biopharmaceutical companies, including Lilly, have a robust pipeline of potential new medicines – nearly 3,000 compounds in development, some 40 percent more than we had 10 years ago. These molecules hold the potential to treat some of our most pressing unmet medical needs … and to increase “health spans” even more.

[Pause]

And there’s a second human dimension of innovation the importance of which is on par with health – and that’s livelihoods. Just the one area of innovation I’ve been discussing – bioscience – provides good jobs to 1.3 million Americans. Bioscience is a 21st Century knowledge-based industry paying an average salary around $75,000.

Now when most people think of Los Angeles, science might not be the first thing that comes to mind … but LA boasts one of the largest concentrations of bioscience employment in the country. A study by Battelle Memorial Institute, based on 2006 data from the U.S. Bureau of Labor Statistics, counted 70,000 bioscience jobs in the Los Angeles metropolitan area – LA and Orange Counties. The study breaks out four subsectors of bioscience, and Los Angeles ranks among the top U.S. metro areas in three:

  • LA is #1 in Medical Devices and Equipment,
  • #2 in Research, Testing and Medical Laboratories,
  • and #6 in Drugs and Pharmaceuticals.

The study estimated that every job in biosciences supports nearly five additional jobs in the economy … so, with the multiplier effect, as many as 400,000 jobs in the LA metro area are tied to bioscience.

[Pause]

Today the U.S. biosciences sector leads the world. In fact, it is just the kind of knowledge-based industry we need to build our economic future. But leadership can be lost. Absent policies that maintain the right conditions for innovation to flourish, we risk losing our advantage and squandering our potential. The pursuit of innovation is a very difficult, very high risk venture. If innovation is to take root and grow, it requires a combination of elements I referred to earlier as an “ecosystem” – and I believe this is a good analogy.

The first element of this ecosystem is an atmosphere in which innovation can thrive … the air and sunshine … a society that understands and appreciates scientific inquiry and innovation … and free markets where innovators can expect to be rewarded for the risks they take and the value they create.

The second element … the nutrients for innovation … come in the form of monetary investments. For investors to take the risks associated with innovation, they must have a fair shot at earning a return if the work is indeed successful. That requires solid protection of intellectual property … and a fair, rigorous, and transparent system of regulation.

In addition to better prepared teachers, we need to give teachers better support … beginning with curricular materials based on sound research. Lilly is supporting research by the National Science Resources Center – an affiliate of The National Academies and the Smithsonian Institute – to develop a hands-on, inquiry based approach to teaching science in Indiana. And we’re working with I-STEM to improve science kits and make them available to teachers throughout the state.

The third and most important element … the seeds of innovation … equate to talented people and their ideas. Ultimately, innovation grows from the human mind. So far, I’ve spoken of people as the beneficiaries of innovation … but it’s equally important to understand that we are the source, as well. We need to remind ourselves that human beings, with their talent and energy, their creativity and insights, are a priceless resource – but a resource that is woefully underdeveloped in this country, even as we congratulate ourselves for maintaining – still – the world’s largest knowledge economy.

[Long Pause]

So, in keeping with my focus today, I want to call attention to three policies necessary to allow these seeds of innovation … human talent and ideas … to take root and grow. Those three policies are:

  • First, broad improvement in science and math education in our grade schools and high schools,
  • Second, immigration laws that allow and encourage top scientists to choose to work in the United States, and
  • Third, a well-funded basic research infrastructure within academic and government labs.
    [Pause]

Let’s begin with science and math education. What I have to say will not be news to any of you, nor will it help your lunches sit any better. No matter how you look at the statistics, the United States is falling short … especially at the high school level.

  • In international comparisons, American 15-year-olds perform poorly in science and math literacy. When compared with students in 57 countries around the world, U.S. 15-year-olds rank 23rd in science literacy and 32nd in math literacy.
  • And we’re not meeting our own goals for student performance in these fields. On the National Assessment of Educational Progress, only half of 12th graders are at or above a basic level of achievement in the sciences … and average scores for 12th graders in the sciences actually declined nationwide from 1996 to 2005.
  • A recent review of science education ranked California – along with my home, Indiana – among states with what was described as “middling performance.” Better news for you is that California is among relatively few states that showed improvement in science scores between 2000 and 2005.
  • The ACT admissions test reported that fewer than one-third of students who took the test in 2008 were ready for college-level biology – both nationwide and in California. Folks, these kids are the future scientists we’ll need to discover new treatments and cures for our toughest medical problems. But, not surprisingly, the number of U.S. students pursuing bachelor’s degrees in science, technology, engineering and math – the so-called “STEM” fields – is far below what will be needed to meet future demand.

Broad understanding of math and science is essential, first of all, so that young people across our society have an opportunity to participate in the high-tech economy of the future. Further, as the technology sector grows, the Baby Boom generation retires, and shortages emerge in particular fields, we will need a large cohort with basic scientific skills to prepare for these jobs.

Meeting these needs will require continued significant attention to improving K-12 science and math education across our country, and I believe that both the public and private sectors must be involved.

Let me cite just one key imperative: Better preparation and support for teachers in STEM subjects ... teachers who know their stuff and can get students excited about math and science. In too many schools, teachers lack strong subject-matter knowledge in these fields. When I think about my own decision to pursue a career as a chemist, it was two devoted high school teachers who inspired me and put me on the right path.

Yet even the best-prepared teachers too often lack necessary curricular support, beginning with materials based on sound research. To that end, Lilly is supporting an effort by the National Science Resources Center – an affiliate of The National Academies and the Smithsonian Institute – to develop a hands-on, inquiry based approach to teaching science in Indiana.

Just last week, President Obama announced a public-private initiative to improve STEM education, building on existing philanthropic programs to expand teacher training, and to place math and science teachers with advanced degrees in hard-to-staff schools. This is just what the doctor ordered!

Ultimately, what we need is not an intensive program to produce an elite cadre of brilliant scientists, but a common effort as a society to develop whole new generations of Americans with knowledge and skills in math and science … a large pool from which great scientists and breakthrough ideas will emerge.

[Pause]

Now let me turn to the second policy to promote innovation: immigration policy that allows and encourages top scientists to choose to work in the U.S.

Let me explain why this is so important. In pharmaceutical research, only one molecule in 10,000 ever makes it to the market as an approved medicine. One discovery, one insight over the course of years can mean the difference between success and failure for an entire research program.

So, just as we look for the most promising molecules, we also look for the very best scientists. Today, many of the top candidates are not U.S. citizens or even permanent residents. This includes candidates emerging from U.S. graduate schools – and, again, it’s not surprising in light of U.S. science education. To stay and work in this country, skilled foreign nationals typically need H1B visas, but the number of those visas has been subject to impossibly low limits in federal law.

Since Congress last raised the annual cap in 1990, U.S. GDP has grown by nearly two-thirds, and the demand for skilled workers has risen commensurately.

We’re not talking about big numbers. At Lilly – a Top Ten global pharma company – we currently employ a grand total of 230 people in the U.S. on H1Bs and other temporary visas … that’s about 1% of our U.S. employee population. Yet those folks are vitally important. They account for a significantly larger percentage of our senior-level scientific work force … and they make vital contributions that otherwise would not be made.

At Lilly, we’ve typically had success with only about 75% of our H1B visa applications, because once the low limit has been exceeded, we’re subject to a lottery like every other potential employer.

And that’s not all. It takes an average of five years for the Lilly employees we sponsor for residency status to obtain a green card. This kind of delay causes a great deal of anxiety and uncertainly for prospective immigrants … including promotions and careers on hold, and significant difficulty traveling outside the U.S. while green-card applications are pending.

We believe that the uncertainty and frustration of the immigration process are driving away prospective candidates before we ever see them. In fact, our nation is experiencing a trend where a significant number of talented foreign nationals who come to our universities and corporations simply return home … which is what you’d expect under these conditions.

Whether or not Congress takes up comprehensive immigration reform, we must fix the policies that are driving away talented people who want to live here and contribute to our economy. This does not require drastic changes … just a sensible increase in visas for these highly skilled immigrants and a shorter, simpler process to get a green card.

To those who argue that these immigrants are taking jobs from Americans, I respond that they’re contributing to strong businesses that help create jobs … and drive innovation … right here in this country. According to the Wall Street Journal, between 1990 and 2007, 25 percent of U.S. companies started with venture capital had an immigrant founder.

It surely beats the alternative: talented people returning to their native country or going elsewhere to start or help a foreign firm to compete against us. You want a job-killer? That’s a job killer.

[Pause]

A third policy imperative is a well-funded basic research infrastructure within academic and government labs … through increased funding for the National Institutes of Health, the National Science Foundation, and other agencies that pursue and support basic research, as well as the training of young scientists. Academic and government research has historically operated synergistically with the private biopharma sector, often supplying the raw material … such as insights on disease processes and leads on promising molecules … which industry works to translate, develop and commercialize.

Real federal funding for research actually declined over the past five years – and the decline hit basic research in government and academic labs. During this same five-year period, by comparison, R&D spending by biopharmaceutical companies grew 22 percent in real terms. The American Recovery and Reinvestment Act – the “stimulus bill” – provides substantial funding for the National Institutes of Health, the National Science Foundation, and other agencies involved in health research. While that infusion of funding is welcome, what’s more important is sustained federal support for basic research.

At Lilly, we know when budgets are tight, there’s always a temptation to cut R&D. We also know that our future depends on innovation, and we try to resist that temptation. We need the same commitment at the federal level. Inconsistency in funding means that grants dry up, projects are cut short, and progress is disrupted. In addition, too many prospective research scientists see the attendant uncertainties of a career in basic science, and look for other opportunities.

Our nation’s innovation engine works best when we’re firing on all cylinders. The indispensible role of government is to support basic research, along with translating and transferring knowledge to the private sector. U.S. companies, in turn, apply that knowledge to develop and commercialize innovative products that create value in the market.

What’s required is not some new “Manhattan Project" but rather a long-term commitment to funding for basic research … to attract more outstanding scientists to that research and keep them engaged in productive work throughout their careers, whether those careers take root in academia, government laboratories, or the private sector.

[Long Pause]

A few years ago, a business reporter offered a startling description of the business that Lilly is in:

“Drug research,” he said, “is quite possibly the least efficient endeavor in the world of business. It’s the equivalent of hiring thousands of art students and funding decades of work in hopes that once in a while one will paint a ‘Mona Lisa.’”

Now that comes across as a sobering thought … except that Lilly scientists do produce those Mona Lisas! And the portrait they paint is the face of every patient who benefits from the medicines they create.

We’re determined to paint more masterpieces … longer lives, healthier lives … through medical innovation.

Clearly, at a time when we’re up against some big economic and fiscal barriers, protecting innovation might be seen as a luxury. Yet who among us can witness the impact of cancer, Alzheimer’s disease, and other scourges and say, “We have all the medical innovation we need”? In fact, innovation may help us overcome fiscal as well as medical and technological challenges; in a world of increasingly constrained budgets, scientific innovation is likely to create new and less expensive treatment alternatives.

Furthermore, bioscience innovation is truly an “active ingredient” in the economy of our nation … and this city … a source of enhanced livelihoods and of good jobs and incomes based on American economic and technological leadership in this high-tech field. It can and must also be an active ingredient in any recipe for health care reform, representing as it does a huge part of the solution to our health care challenges.

  • Without innovation, we’re not going to be able to provide more effective health care to a rapidly aging population.
  • Without innovation, we will be defenseless against scourges such as Alzheimer’s disease.
  • Without innovation, the staggering health crises that linger in the developing world will get worse … not better.
  • And without innovation, America’s most fundamental competitive advantage will indeed decline.
    [Pause]

Fortunately, I’m an optimist. Being involved in the hard, often frustrating work of innovation requires optimism. But it generates optimism, too … because we’ve seen diseases conquered, pain relieved, lives saved by our work.

One of the most inspiring aspects of my job is the chance to meet face-to-face with patients whose lives have been touched by Lilly medicines. In a Christmas photo on my desk is the face of a young man, a Lilly employee, who had been saved from imminent death not two months ago by a Lilly medicine … and the faces of his wife and son.

Today, ladies and gentlemen, we stand on the brink of an enormous opportunity to harness new scientific knowledge that could make a further, substantial contribution to human health. It is no understatement to call this the “Century of Human Medicine.” And medicine is just one of many fields where dedicated people are pursuing exciting innovations to improve life for people around the world.

We’re fortunate to live in a time and place where we can choose to devote substantial resources to such endeavors. We owe it to future generations in this country, and to people around the world, to ensure that we create and sustain a viable ecosystem for innovation as a matter of highest priority.

We must continue to build a society that appreciates and rewards innovation, maintain a strong legal and regulatory infrastructure, and most of all, prepare and encourage talented people to pursue innovative science. All of us who care about innovation should be insistent about high-quality K-12 education, especially in math and science; immigration laws that allow skilled scientists to work in the U.S.; and steady long-term funding for basic research.

Through a commitment to innovation … founded on a deep appreciation for what innovation contributes to human lives … we can overcome the very serious problems that face us today and prepare for the challenges of the future … securing livelihoods and enhancing lifespans for Americans in this new decade and for generations to come.