Starting in 1999 with the White House's decision to scuttle a bipartisan effort to reform Medicare, Democrats have trained a klieg light on prescription drug prices, making it a central issue in their quest to retain the presidency, regain the House of Representatives, and reduce the GOP advantage in the Senate to nil. This intense focus on prices has distorted the healthcare debate by equating drug costs with consumer access and muffling concerns about the impact of government policies on the development of new therapies.

It also has placed critical questions about the future of biotechnology in sharp relief. One of the most basic questions is whether there are fundamental differences between the biotech sector and the pharmaceutical industry, as the latter has sunk in the eyes of the public and politicians of both parties to a position barely above the tobacco companies.

At the same time, regardless of the outcome of this week's elections in the U.S., the biotech industry will have to face up to the fact that both American political parties are beholden to constituencies that are hostile to some key aspect of the biotech agenda.

Outside the black hole

As can be seen in the graphic, Wall Street has uncoupled biotechnology from Big Pharma, especially in the discovery space (see "Decoupled", below). Pharma has been flat-lined and even biotech product plays haven't benefited from the surge of momentum and retail investor enthusiasm over genomics.