A walk to remember, actually

           In business and professional worlds, one should always deliver on their word. Of course, things are said from time to time that we want to deliver on, or we mean to uphold, and somewhere it gets lost. But even if we mess up, we should take care in the present and future to uphold our word.

           Promises are different. In the personal, professional or any other world, a promise is a promise. I don’t make promises I can’t keep, just as I don’t state my intentions with conviction unless I really mean it. I only make personal promises to those I care for because I mean it. Most of us operate this way, or at least try to.

Still, convictions and words that we mean we also want to uphold. I only tell a confidant (like a friendly basketball team owner) that I’m going to shape healthcare redesign for cures, treatments and delivery if that is what I will do. Others are the same way, and if we ever find ourselves off track we remind one another of those intentions. These intentions don’t have to be life-encompassing….but in the end our efforts and accomplishments should match.

           It’s like those times we meet others for a walk. Oh, in the past it may have been school friends, childhood playmates, acquaintances that have returned from an overseas military trip, routine best friend talks, or children looking for a few moments out of the house. Even daily walks with the dog after work come to mind - we said we’d be home as soon as possible and they are expecting us to deliver on our word.

           In fact, we may or may not formally agree to walks, we may not need to, but the walks are expected. And we remember them.

           Lots of words are said when it comes to global social impact, actions taken for benefit of society, deliverables on medical research, cures and better treatments. People and companies want to do good and they say it all the time. Still, we often see our intentions our very different for our very different pockets of life. We want to do social good because it’s the right thing to do personally. Professionally, we want our companies to capitalize and maximize profit. We may even want our family members to spend more time with one another – actions all members agreed upon. But like statements made with conviction, often we can’t silo these intentions. Life doesn’t happen that way. Professional and personal lives cross over in various ways. Social and family goals even accompany one another at times. We make it work, because we said we’d be there for that walk.

           We make it work.

           So when it comes to healthcare funding and impact, our convictions should match. We should make it work, because we said we would.

           Medical research funding is often different than the funding that accompanies healthcare businesses and startups, but often the two go hand in hand. Medical research in the United States is funded by different parties. In 2012, pharmaceutical firms funded 32%, biotechnology funded 17%, medical device companies funded 10%, the government and the National Institute of Health funded 38% and charities/private donations funded 4% of medical research. Dollars flow to and from these entities, and some of those dollars delivered with venture capital support.

           Venture capital (VC) seeks profits in medicine through product and early stage funding(1) of companies. As recent as 2010, 462 VC firms in the United States invested $22 billion in 2749 companies(1). Like other industries, the goal of investors is to maximize profit and that is the measure of success. Unlike other industries, however, some in healthcare measure success differently. This creates a mismatch between what an investor and company sees as success and what others in the healthcare world, patients, the public, and medical researchers see as success.

           Venture capital funding is usually set up in a way where financing is agreed upon with long-term investment potential in mind. Biomedical research and life science funding is not as popular as biotechnology and other tangible deliverables to venture capitalists(1), simply because the former may not be as lucrative.            

           The full scope and benefit of VC in healthcare is tough to detail, because subsets of medicine (biotechnology, pharmaceutical enterprise, translational science, etc.) are not consistently accounted for in funding analyses. As an example, in 2007 it was reported that venture capital investments in biotechnology totaled $7 billion(2). Another readily available analysis attributed $4.1 billion in technology venture spending in 2007. These are not dollar amounts to be compared, nor viewed as one subset from a whole. Until categories and return data are consistent, a complete financial picture in VC for healthcare may remain out of reach.

Governments have created funds and actions to promote VC funding in healthcare. This view of VC as a catalyst for innovation and economic opportunity is popular, but it’s not consensus. In fact, some point out that VC funding may misguide healthcare successes in that funding is distributed without regard to health missions or goals for the public. Some of these goals potentially include public health agenda, healthy outcomes in patients, decreasing healthcare cost, finding cures, access to care and eliminating health inequalities. One study from a recent survey reported that 85% of investors do not consider public health impact at all or only consider public health impact of their investments as “somewhat important”(3,4). While this study didn’t include all VC companies in the United States, it did provide honest perspective.

Investor financial goals and stated social impact goals can be accomplished together, actually.

Here’s where we remind each other about that walk we said we’d take together.

Venture capital companies often seek social impact. They strive to make the most of their dollars in donations or investment in economic opportunities of choice. That effort can be realized in healthcare efforts, too.

It is imperative to design ideal relationships between VC, the public and medical industries. We can work together, walk together, in better policy, comprehensive measurements and impact analyses.

We make it work because we said we would.

As we remember that walk we’re about to take with our venture capital investor companions, here are a few recommendations:

• Lots of new ways to gain funding are discussed in medicine. We can examine the reasons why these new avenues may work and potentially find those attributes in venture capital. Strategies that apply creative tax policies, bond and trust tactics and bringing foreign money back (repatriation of capital investing)(2) may be reworked in venture capital funding incentives. Specific parts of medical research lack funding because of the risk – but perhaps venture capital investors can be advisors or contribute to the formation of safety net partnerships to see the research through. Working those words of social good aspirations into professional goals of maximized profit helps remind us of that beautiful walk. We don’t have to wait for new funding sources to applying creativity. Actually in fact, creative methods can potentially harness VC funding….or at least VC expertise.
• Helping VC investors understand the impact of their investments achieves those multiple intentions, too. Social impact and innovation reflective of investor desire can be reported alongside financial and profit calls. These reports can be assisted by healthcare. For example, medical research impact indicators have been put forth recently. These measures seek to quantify health service impact, scientific product, dissemination, collaboration and industrial production of biomedicine. These measures may even produce long-term analyses and trajectories on venture capital. What a great starting point to present to investors, groups that already seek social impact in their personal and professional lives. The healthcare industry should work to assist funders in understanding broader impact through direct reports, in good faith and visible to the investor eye. A reminder as the investor goes about his or her day. A reminder as they meet for that walk.
• Global alignment in medical research, even with minimum policy and operations points, may assist VC interest. Globalization continues to change economic landscape, and countries’ economies, biomedical science and health are bound. The United States has been the world leader in biomedical research investment for 60 years but other countries continue to catch up. There have been many speculations that the U.S. may not continue to be the world leader in biomedical research investment(2) due to growing interest by other governments. While investment by venture capitalists in emerging life science markets (like Brazil, China, South Africa and India ) do not show a lot of activity, and the data is unreliable and poor(5), there are opportunities for VC investment in other countries. Global harmonization may assist in VC funding, thereby assisting in even greater alignment and health impact. Aligning basic policies such as patent reform, regulatory policy and funding considerations are just a few of the ways global harmony can ease medical innovation. These policies can be shaped in effort to minimize investor fears of risks as well. Finally, U.S. leadership in policy reforms and shaping public interest should seek to maintain U.S. status as the world leader in biomedical research investment alongside global harmony.
• Fatigue and discouragement in medical innovation must continue to be addressed. It’s tough to keep funding science when we don’t see cures for cancer, Alzheimer’s, rare disease, and it is tough when scientists still can’t pinpoint the exact causes for disorders like autism. It’s really tough. But you know what? The whole world feels the same way. Even VC investors. And remember: because the whole world feels the same way, because global sentiment is aligned, global hope can be aligned too. We can get right back up because we remember our intentions.

In venture capital and healthcare, we can walk the walk together. We can do this by creating the best environment for venture capital investors while setting expectations that investors deliver on their social impact discourse.   

We can create a walk to remember, actually.

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References

1.       National Academy of Sciences. Strategies to leverage research funding. Washington, D.C.; 2004. 1-293 p.

2.       Moses H, Matheson DHM, Cairns-Smith S, George BP, Palisch C, Dorsey ER. The Anatomy of Medical Research. Jama [Internet]. 2015;313(2):174. Available from: https://jama.jamanetwork.com/article.aspx?doi=10.1001/jama.2014.15939

3.       Lehoux P, Miller FA, Daudelin G. How does venture capital operate in medical innovation? BMJ Innov [Internet]. 2016;2(3):111–7. Available from: https://innovations.bmj.com/lookup/doi/10.1136/bmjinnov-2015-000079

4.       Ackerly DC, Valverde AM, Diener LW, Dossary KL, Schulman KA. Fueling innovation in medical devices (and beyond): Venture capital in health care. Health Aff. 2009;28(1).

5.       Chakma J, Sammut SM, Agrawal A. Life sciences venture capital in emerging markets. Nat Biotech [Internet]. 2013;31(3):195–201. Available from: https://dx.doi.org/10.1038/nbt.2529\n10.1038/nbt.2529\nhttps://www.nature.com/nbt/journal/v31/n3/abs/nbt.2529.html#supplementary-information