Election Outcomes and Biotech In Mass.

Deval Patrick could be good for the life-sciences industry, but Congress may not -- at least on the key issue of drug prices. The Mass. governor-elect has reassured biotechnology executives by saying he supports embryonic stem-cell research, and wants to finance it with state bonds.

Mitt Romney opposed embryonic research. So far Patrick hasn't offered specifics about the bonds, except to say that research money would be reserved chiefly for public universities, not private industry.

Whatever happens on Beacon Hill, it is Washington that has the real impact on life-science companies. The federal government is the single largest purchaser of healthcare in the nation, chiefly through Medicare, and what it pays for drugs and medical devices can affect local giants such as Boston Scientific Corp., Genzyme Corp., and Biogen Idec Inc.

In their first 100 hours in the next Congress, Democrats have pledged to let Medicare start negotiating lower prices from drug companies, something now prohibited. This would save money for Medicare patients and taxpayers by pinching profits at drug companies, including major biotech firms. Biotechnology leaders also worry that as Medicare pushes prices down, investors will lose enthusiasm for risky biotech start-ups, whose growth depends on the chance they may profit from future drugs.

In a speech last week, Biogen Idec chief executive James Mullen said that if the government squeezes drug prices, Wall Street could sour on biotech, with "dramatic, detrimental, and irreversible effects."

The newly powerful state delegation would give the industry a louder voice in Washington, and some hope it will increase National Institutes of Health research funding. But it will also give new impetus to the push for lower-priced generic versions of biotechnology drugs.

And if the Senate swings Democratic, Senator Edward M. Kennedy takes over the Senate Committee on Health, Education, Labor, and Pensions , which oversees the Food and Drug Administration and the NIH. Kennedy could help boost local research funding and his former staffers populate the top ranks of life-science companies and lobbying groups. But the senator also is co-author of a bill to tighten safety controls at the FDA, a move companies worry could slow the already lengthy approval process for new drugs and devices.

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