Part 1: The emergence of the Massachusetts Biotech Industry and the Role of Government

Our team at Issues Management Group recently sat down with Bob Coughlin, an expert in the life sciences industry, to learn about the intersection of Massachusetts Biotech and the government.

Q: At the turn of the 21st century, the biotech industry in Greater Boston was nothing like it is today. Can you set the scene for the early days of the industry here?

Coughlin: You heard about biotech back then. We had companies like Genzyme that were focusing on rare genetic disorders and enzyme replacement therapies, and companies like Millennium that were leaders in developing cancer drugs. But the average person did not understand what the biotech industry really was or what it meant.

I got involved while serving in the House of Representatives, and it became important to me, not for political reasons, but for personal ones: my wife and I had a little baby with cystic fibrosis.

It opened our eyes as a family, and it also opened my eyes as a legislator. These were companies that were out there trying to solve any unmet medical need known to humankind, and I quickly understood that my son’s only hope was these amazing biotech companies that were in Massachusetts.

I realized there were things that we could do from a policy standpoint that could have an amazing, positive effect on innovation. So, we formed the Biotech Caucus in the legislature, and started to educate members of the House and Senate on why this industry was not only good for the economy and job creation here, but hugely impactful for humanity.

Now, I have been involved with biotechnology for over 21 years. It creates hope for people like my family and my son, and everybody who knows and loves somebody who has fought or lost a battle to cancer or ALS or Alzheimer’s. We have these companies right here in Massachusetts that can solve these problems.

Q: Boston was still dominated at that time by financial services and law firms, etc. How did biotech start to emerge?

Coughlin: We were known for financial services, law firms, accounting firms, but we also had higher education. What is our natural resource here in Massachusetts? We don’t grow corn; we don’t build cars. What do we do? We train and foster talent. We create and cultivate and attract smart people. So, if your natural resource is talent, you’re going to be good in an innovative economy.

Then couple that with our world-class hospitals, with significant NIH funding and the best academic medical centers, and suddenly this amazing science is happening at the cusp of research labs and health care delivery. Then there are the patients. We had really sick people coming to get care and we had really smart people caring for them and trying to figure out how to come up with new therapies and cures. We had all the ingredients for success, but that still needs to be nurtured.

Q: And state government started to play a role?

Coughlin: Government plays a role in whether or not you will grow and expand something or lose it. I remember growing up when Route 128 in Massachusetts was known as America’s information technology highway. By the time I graduated from college, all the computer companies were gone. Why was that? Our government didn’t create an atmosphere that would retain the talent or help foster and grow the industry.

Fast forward to the 2000s, and we had a string of Governors from both parties that took in interest in biotech. A lot of people don’t realize this, but it was actually Mitt Romney, a Republican, who created the Massachusetts Life Science Center. It wasn’t huge at the time, but it was an idea. It was a point of contact.

Then next comes a Democrat, Deval Patrick, who really put this industry on the map. We were going into an economic downturn, and he wanted to pull Massachusetts out of this downturn faster than anyone else.

So how do you do that? You invest in your strengths. And that’s when Massachusetts really stepped up, raised their hand and said, we’re open for business in the life sciences.

We’ve got academia doing their thing. We’ve got industry doing their thing. Now the third leg of the stool is government. When academia, industry, and government work together, there isn’t a problem you can’t solve.

And we pulled ourselves out of that economic downturn faster than anywhere else in the country by growing our innovation economy, mainly through the life sciences industry. And by creating that 10 year 1-billion-dollar life science initiative, Governor Patrick fired a shot heard around the world. He let researchers and biotech business leaders know they would be welcome and be given the tools they needed to innovate in creating cures and therapies.

So, Governor Patrick does a 10-year initiative, then the next administration is Charlie Baker, a Republican, and what does he do? He doubles down on it. He doesn’t say, “We’re going to get rid of it because it was a Democrat’s idea,” he says, “we’re going to grow it and make it better,” and he did a five year, half a billion-dollar initiative. And now we’re working on version 3 with Governor Healey, making it two Republican and two Democratic governors who support this industry and are willing to invest and be patient; because it is hard, it’s speculative, it’s expensive. You need to accept failure more than probably any other industry in the world. You need patience. But when that success comes, it dramatically, drastically changes the lives of many people.

Q: Massachusetts started to foster this industry and invested a billion dollars over ten years amid the Great recession. How did companies start to grow?

Coughlin: When the first 10-year plan started, we were mostly known for small, home grown biotech companies. And when the market crashed in 2008, from 2008 to 2012 there were no more IPOs, and it became clear that a traditional drug discovery model wasn’t going to work, and we weren’t going to create another Vertex or Cubist or Millennium any time soon.

We started recruiting large pharma companies to come here to make investments. If you look at 2008-2012, there weren’t any IPOs, yet we grew by 52% in employment in the life sciences in Massachusetts because big pharma companies said, “Okay, the best way to invent new therapies is to engage in external innovation. Let’s not build a huge campus up on the hills of Indiana or New Jersey or Connecticut that have these big buildings that do high throughput screening of compounds.

Let’s close them down. Let’s take that money, and let’s invest and do business development deals, external innovation deals, and fill our pipeline of future therapies by outsourcing innovation and doing licensing deals. In other words, all these small biotech companies would become the future pipeline for larger pharma companies. So, we changed the model, and leveraged this shift toward external innovation, and we were able to recruit 19 of the top 20 pharma companies to have a physical presence in the Commonwealth of Massachusetts. And this is all like in the last two decades. That’s amazing. Nowhere else in the world can you say this happened.

Q: And that effort has really reshaped our economy.  

Coughlin: Exactly, and that’s another thing. For anyone in Massachusetts to not fully support and embrace the life sciences industry is just insane because, one, everyone’s going to be a patient at some point. Everybody. And this is the industry that develops therapies and keeps you healthy, keeps you alive.

And two, it’s driving the economy here in Massachusetts. It’s creating jobs and billions of dollars of payroll here in Massachusetts. These are good jobs and it’s not just for scientists. Look, hey, I’m not a doctor. I’m not a scientist. And I’ve had a great career in biotech. People who do communications. People in marketing, legal, accounting, supply chain facilities, engineering, maintenance, everything. We create amazing, good-paying jobs in this industry.

Massachusetts is one-sixth of the size of California and per capita we crush them in NIH funding, and now Massachusetts just won ARPA-H. That’s a big deal. People should be screaming from the rooftops about how important this is for our economy and for patients and for innovation and for the future.

Q: One of the biggest criticisms of this industry, including by political leaders here in Massachusetts, is the high cost of prescription drugs. Is this issue being framed the right way?

Coughlin: The pricing issue is completely misunderstood. When you invent new therapies, it doesn’t drive the cost of health care up, it actually helps avoid cost elsewhere. This was something that really came true during COVID.

COVID hits and for the first time in many of our lives the most important thing in the world to everybody was to end the pandemic. It was bankrupting the world. Everybody came together and said, oh my goodness, we need companies to invent a vaccine, and the government stepped up with things like Operation Warp Speed.

Just here in Massachusetts alone, there were 97 companies that were doing COVID-19 related research, whether it was for a vaccine, an antiviral, or a diagnostic test.

That’s amazing. And in less than 12 months, we were able to invent three vaccines so the world could get back to business. How many people still remember that? Some people just like to make pharma the bad guy, it often feels like nobody wants the pharma industry until they need it.

I’m going to give you another example of how this really plays out.

If you can cure somebody of hepatitis, that drug is expensive upfront. But you’ve cured that person of hepatitis. There are no more hospitalizations. There are no more liver transplants, and that person can live a full life and be productive member of society.

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