Archives: Reports

A Kauffman-funded National Foundation for American Policy report finds that key parts of pending immigration bills would open the door wider to highly skilled individuals.

The analysis shows that if Congress takes up immigration reform legislation later in 2014, employers and the U.S. economy would benefit from several provisions on high-skilled immigration in House and Senate bills.

Read “House and Senate Legislation on High Skill Immigration.”

Immigrants have played an increasingly important role in contributing to science and engineering advancements in America, according to a Kauffman Foundation-funded National Foundation for American Policy report.

While, historically, immigrants have always made valuable contributions to the country, objective measures indicate those contributions have increased significantly since the 1960s (when major restrictions on immigration were lifted), and, in particular, over the past 20 years (as immigrants have found important niches in science and technology fields).

Read “The Increasing Importance of Immigrants to Science and Engineering in America.”

Repurposed drugs present the promise of enabling patients’ access to much-needed therapies sooner and at a lower cost. The promise is especially great for patients suffering from rare diseases that lack effective therapies. The traditional development path in pharma is long and costly. In the case of rare diseases, this expense has to be recouped by charging very high prices to the small affected population during the period of exclusivity provided by regimes like the Orphan Drug Act.

Providing treatments costing in excess of $200,000 annually to a total population of 25 million to 30 million rare-disease patients could consume almost 50 percent of the gross domestic product. These levels of spending obviously are not sustainable. Making it easier to produce drugs without spiking prices is therefore a pressing, unmet policy need. Additionally, many patients suffering from rare diseases can’t wait twelve to seventeen years for a new treatment to be discovered, developed, and marketed.

The development of repurposed drugs (wherein a drug that already is approved for a specific condition can be repurposed to treat another) is promising in that it enables a faster regulatory path to market since the safety profile of the product already has been established, reducing the risk and cost to get these much needed drugs to patients. Yet historically, biotech and pharma have not pursued repurposing because of the difficulties in establishing exclusivity under the current regulatory paradigm.

The ongoing and expanding drug repurposing project of evaluating auranofin (Ridaura®), a rheumatoid arthritis agent first approved in 1985, for Chronic Lymphocytic Leukemia (CLL) is a great example. CLL satisfies the definition of a rare disease. The auranofin drug repurposing project successfully advanced this treatment from an in vitro screen to use for patients diagnosed with this hematologic malignancy in eleven months. This drug is being developed through The Learning Collaborative, a partnership between the Institute for Advancing Medical Innovation (IAMI) at the University of Kansas Medical Center (KUMC), The Leukemia & Lymphoma Society (LLS), and the National Center for Advancing Translational Sciences (NCATS) at NIH.

Although there are drug repurposing success stories with agents such as thalidomide and rapamycin (cases where specific regulatory quirks allowed for additional exclusivity), a major challenge for most repurposed drugs is lack of a clear exclusivity path. Although exclusivities provided by patents and the Orphan Drug Act protection may be nominally applicable to the new use, such exclusivities can be undermined by physician decisions to prescribe the generic version of the old drug “off-label” for the new indication.

Lack of exclusivity (typically afforded by the composition of matter patents for new drugs) creates challenges for innovator firms, generic manufacturers, and investors, making it difficult to fund drug development activities required for market approval. And even though rare diseases represent the most pressing case, the solution for repurposing existing or abandoned drugs (therapeutic candidates whose development has been discontinued by innovator firms for non-safety reasons) should be useable beyond rare diseases. The solution itself must be repurposable—for diseases like Alzheimer’s, diabetes, or many other chronic conditions that might benefit from existing therapeutic agents.

The use of financial incentives to attract and retain companies has become one of the most common economic development strategies of U.S. states and municipalities. Despite the widespread debate on the effectiveness of these programs, few systematic academic studies have examined how incentives affect job creation and local economic development. The result is that policymakers often lack objective data from which to draw conclusions about the benefits of these programs.

At a time in which state and municipal budgets are increasingly strained, new tools that allow policymakers to evaluate and understand the costs and benefits of incentive programs are needed. This paper attempts to provide policymakers with such a tool by exploring the impact of the Promoting Employment Across Kansas (PEAK) incentive program and other incentives. The paper is part of a larger project funded by the Ewing Marion Kauffman Foundation that seeks to examine the effects of incentives on job creation in the Kansas City region as part of a two-year study of incentive competition.

The paper’s main finding is that, when comparing firms receiving PEAK incentives to a similar set of “control” firms, PEAK incentives recipients are statistically not more likely to generate new jobs than similar firms not receiving incentives. A secondary set of findings shows that firms relocating to Kansas, with or without incentives, do not experience job growth at higher rates than existing firms.

More important than the specific analysis of the PEAK program, this paper provides a model for the evaluation of incentive programs that could be applied to both state and municipal incentive programs. In the conclusion, I offer some suggestions for reforms of both the reporting of incentives and the analysis of the economic impact of incentives, and alternative economic development strategies.

The Kauffman Index of Entrepreneurial Activity is a leading indicator of new business creation in the United States. Capturing new business owners in their first month of significant business activity, this measure provides the earliest documentation of new business development across the country.

The percentage of the adult, non-business-owner population that starts a business each month is measured using data from the Current Population Survey (CPS). The Index captures all types of business activity and is based on nationally-representative sample sizes of more than a half-million observations each year.

In addition to this overall rate of entrepreneurial activity, separate estimates for specific demographic groups, states, and select metropolitan statistical areas (MSAs) are presented. The Index provides the only national measure of the rate of business creation by specific population groups.