These requirements also ensure that guaranteed debt funding isn't soaked up by big biopharma in the form of a new subsidy for still higher profits or as a back-door backstop for venture capital. We know from housing finance and the 2008 cataclysm how important it is to align debt-market incentives with social-welfare objectives and this lesson must be reflected in the design of new federal guarantees for under-served biomedical researchers desperate to address unmet needs across the spectrum of disease and disability.
Legislation now pending in Congress shows one way to craft such a guarantee with built-in controls to create a secondary market for high-quality loans to promising scientists suitable not only for local lenders, but also institutional investors such as pension funds and life insurers. Others are possible in the context of broader, "ARPA-H" legislation, where guarantees for new bonds would power up the federal spending also needed to speed translational research.
Adding an “S” component to ESG offerings is both urgent and possible. The U.S. will unlock billions of dollars for the vital public good of faster cures by deploying well-established loan-underwriting and asset-securitization practices without adding to the federal deficit.
This article was provided by Bloomberg News.