Gov. Maura Healey’s long-awaited plan to double down on state funding for the biotech and medical technology sector came into focus Thursday with the announcement she’ll seek $1 billion over the next decade to reauthorize the state’s 16-year-old life sciences initiative.
But lawmakers so far are noncommittal on funding the plan. The proposal — dubbed Life Sciences 3.0 — is part of a larger economic development bill the Healey administration is expected to file soon. Several expressed support for an industry in which Massachusetts is a leader, but also noted the spending request comes at a time of competing priorities.
Among other things, the Legislature is weighing a five-year, $4.1 billion housing bond bill to boost investments in affordable housing, and a $1.2 billion bond bill to modernize information technology systems across state agencies.
That’s before the new economic development bill, called the Mass Leads Act, which also includes $1 billion for climate-tech, is submitted.
“It’s a big bill,” said state Rep. Jerry Parisella, Democrat of Beverly, who co-chairs the Legislature’s Joint Committee on Economic Development. “We understand how important the life sciences are to Massachusetts … [But] we’ll have to have confidence that we can afford it.”
Representatives for Senate President Karen Spilka and House Speaker Ron Mariano said they would review the governor’s life sciences proposal when the economic development bill is filed.
Healey’s proposed $1 billion outlay was larger than some in the industry and on Beacon Hill had expected. The state’s first life sciences initiative was launched by former Governor Deval Patrick in 2008 with $1 billion allocated by the Legislature over 10 years. It was extended under Patrick’s successor, Charlie Baker in 2018, with another $500 million.
The new initiative from Healey continues those efforts to promote the industry’s growth in Massachusetts, with some new areas of focus.
While the Life Sciences 3.0 proposal would extend a mix of grants and tax breaks for companies that build sites and hire workers in the state, it would also give the quasi-public Massachusetts Life Sciences Center greater discretion in deciding where and how to deploy the money.
That would include increasing a statutory cap on life sciences tax incentives from $30 million to $50 million, enabling larger funding rounds for priorities such as biomanufacturing, early-stage drug and device makers, and companies outside Cambridge and Boston.
The plan would also increase spending for workforce training and internships to bring more blue-collar workers and students without college degrees into the life sciences workforce. And it would embrace a collaborative model for solving big health care problems, such as mental health, women’s and maternal health, and health disparities.
“I’m pleasantly surprised,” said Kendalle Burlin O’Connell, president and chief executive of the Massachusetts Biotechnology Council, who was involved in helping to shape the proposal with state officials. “This is forward looking in the exact way the industry was hoping for.”
Funding for the previous life sciences initiative expires this year. Although a total of $1.5 billion was authorized, only $979.6 million has been spent to date because the funding requires yearly legislative appropriations and some projects haven’t been funded.
Still, the outlay has helped create 17,000 jobs and draw more than $6 billion in private investments, helping to attract 18 of the 20 largest biopharma companies to the state, the Healey administration said.
Yvonne Hao, the Massachusetts secretary of economic development, said the new life sciences initiative would borrow from the teamwork approach used by ARPA-H, a new federal agency that last year designated Cambridge as its national “investor catalyst” hub. The agency is working with scientists, entrepreneurs, and financiers to speed transition of basic research into new technologies and medicines.
“We’re taking inspiration from ARPA-H,” said Hao. “We’re going to think bigger about the next generation of problems.”
Hao said the new life sciences initiative would continue to pay off in more jobs and companies, she said. Of the $1 billion requested, $500 million would go to grants to support capital projects such as buildings and research programs, $350 million to tax incentives, and $150 million toward operating funding to support job training programs.
“People might ask how can we afford to do this. I would ask how can we afford not to do this,” Hao said. “We lead today in the life sciences. But just because you lead now doesn’t mean you’re always going to lead.”
William Smith, senior fellow at the Pioneer Institute in Boston, a free-market think tank, said expanding the industry beyond research and development makes sense. “If you look at the life sciences industry in Massachusetts now, you see PhDs getting six-figure jobs,” he said. “You don’t see people without four-year degrees sharing the wealth. And training people for biomanufacturing is the way to do that.”
More broadly, however, Smith said he’s skeptical that state government can make smart investments to promote the life sciences industry. The industry is strong in Massachusetts not because of the state’s spending, he said, but because of research universities and the private sector.
“Massachusetts is a leader in life sciences because of the research ecosystem that was created by top tier universities, venture firms, biotech and pharma research labs,” Smith said. “The venture [capital] community, which supports biotech, does considerable due diligence. And I’m not sure the state has the acumen to do that.”
But industry leaders said Massachusetts has to be aggressive in attracting and retaining biotech and medtech companies because lower-cost states, such as Texas and North Carolina, are offering incentives to lure them away. In addition, other countries, especially China, are spending heavily to build their own life sciences clusters.
Brian Johnson, president of the Massachusetts Medical Device Industry Council, said the state must “reload and refocus” its backing for the sector with another round of funding.
“The world’s caught up,” he said. “We had to be bold, to make an investment of the size to maintain our lead.”