Yahoo Finance Medical research has driven 'the last 200 years of economic expansion': Michael Milken
The pandemic gave the world new reasons to focus on public health and health equity, but it also gave the world of medical innovation a much needed push. Michael Milken, chairman of the Milken Institute and a financier, says the momentum needs to continue.
"We have come so far, so fast. But we have a tendency to gear up and gear down," he told Yahoo Finance in an interview Tuesday.
Milken pointed to the burst of investment in health companies amid the pandemic in 2021 — more than $34 billion globally — which quickly fizzled out the following year.
"Today we have large, what were biotech companies, Amgen (AMGN), Genentech — part of Roche (RHHBY). But as you know...November '21 was kind of the high for bioscience companies," he said.
The industry also saw a slew of IPOs of earlier stage companies.
"It was maybe too early for many of them, and then a year later we saw the prices crashing for many of these small companies. So today, we have a situation somewhat similar to where we were a little more than 20 years ago. Many of these companies have liquidity, but they sell at a discount to the cash," Milken said.
Milken said continued investment in the life sciences is critical and now is an optimal time to focus on curing some of the most common and widespread diseases — which will in turn, bolster the overall economy.
"Many people in the world of finance do not realize that the driver in the last 200 years of economic expansion has been ... public health and medical research," he said.
"Maybe the greatest achievement of humankind has been increasing median life expectancy from 31 years to 70 some odd years, and with this, has driven the world's economy," Milken added.
It's the focus of his latest book, "Faster Cures: Accelerating the Future of Health." In it, Milken recaps his personal experiences with the medical world, including family members lost to cancer. He also shares what's become his life's work, investing in health care.
Milken started his career in finance and is best known for developing the strategy to invest in "high yield" or junk bonds and for spending almost two years in prison in the early 90s for violating U.S. securities laws, for which President Donald Trump pardoned him before leaving office.
Equity and access
Beyond equitable access to health care, Milken is also a big proponent of access to capital.
"As one of the most regulated industries in the nation, banks were encouraged and predisposed to provide loans only to 'safe' borrowers and their managements, who almost invariably were male, white, and 'established'," Milken wrote in his book.
He said that while that situation has improved, "We do have financial deserts in the U.S., and we discovered that during the pandemic."
He pointed to the government's COVID-19 relief funds and the struggle to disburse them to those most in need.
"When we have millions of people who don't have a bank account, and when you want to support them, how do you get money to them?" Milken asked.
The pandemic also put a spotlight on topics such as food deserts and other inequities that persist as a result of structural biases in U.S. systems. But changing demographics is necessitating change.
"There are states in the United States now where only 15% of the children are of European ancestry," Milken said.
That spills over into health care needs as well, as the need to do clinical trials for new medications on diverse populations becomes even more necessary. It's an effort the U.S. government, and bodies like the FDA, are now focused on.
"We have to find a away to get a much more diverse and rep part of our country involved in our clinical trials and programs," he said.
Follow Anjalee on Twitter @AnjKhem
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