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Biogen Idec chief warns against funding cuts

Biogen Idec’s George Scangos said his company and others are stepping up but “can’t pick up all the slack.”

Jessica Rinaldi/globe staff

Biogen Idec’s George Scangos said his company and others are stepping up but “can’t pick up all the slack.”

CAMBRIDGE — The top executive of Biogen Idec Inc. said Thursday that the state’s drug makers are producing breakthrough treatments for conditions ranging from multiple sclerosis to hepatitis C to hemophilia. But he warned that future innovation is threatened by federal funding cuts for basic research and payments that don’t allow companies to recover their investments.

“To put it bluntly, patients will not be able to get access to therapies that aren’t developed” if funding and insurance reimbursements dry up, Biogen Idec chief executive George A. Scangos told nearly 400 industry leaders at the Massachusetts Biotechnology Council’s annual meeting.

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Scangos, a native of Lynn who worked for years in the San Francisco Bay area, returned to his home state in 2010 to take the helm at Biogen Idec, the fastest growing biotechnology company in Massachusetts. He spoke Thursday after MassBio presented him with the Henri A. Termeer 2013 Innovative Leadership Award, named for the retired Genzyme president.

Addressing his fellow biotech executives at the Royal Sonesta Hotel, Scangos said it is now widely recognized that Massachusetts has built the nation’s top life sciences cluster, centered in Kendall Square, where Biogen Idec recently moved its headquarters from suburban Weston.

“I don’t want to slight my friends in California, but we have to face reality,” Scangos said.

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Biogen Idec has more than 3,000 employees in Massachusetts, plans to add another 300 this year, and has taken possession of about 500,000 square feet of office space in Cambridge over the past year. It is expanding its portfolio of MS drugs, diversifying into new disease areas such as hemophilia, and working in collaborations with smaller biotechs and academic researchers.

In one, Biogen Idec has set up a consortium with scientists from Harvard, Yale, Columbia, and the Rockefeller Foundation to gain biological insights into the neurodegenerative disease amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease. Scangos said the alliance is sequencing the genomes of ALS patients to understand the genes that cause the disease.

“Government funding is obviously being cut back,” Scangos said, citing the decline in grants for fundamental research from the National Institutes of Health and other federal agencies. “Biogen Idec and other companies are stepping up, but we certainly can’t pick up all the slack.”

Scangos also warned that moves by some lawmakers and Medicare officials to reduce reimbursements for expensive therapies that save or extend lives could threaten the drug industry’s ability to bring new treatments to market. He applauded MassBio’s plan to create a “value-based study group" to make the argument that new drugs and medical technology can lower long-term costs to the health care system by keeping people healthy.

“We are in an era where the science is getting ahead of the regulatory process,” he said.

Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.
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