Reality Check

BIOTECH COMPANIES SAY the Clinton Administration is scaring away vital capital. The White House wants a committee to review the pricing of new drugs. So the industry's trade group, BIO, trumpets a new Brandeis University survey that claims the vast majority of venture capitalists--who provide the lifeblood for biotech outfits--are frightened by the prospect of price controls. Result: They invested less money in fewer companies in 1993 and plan to invest still less in 1994.

IN REALITY, these are just politically inspired scare tactics. The Clinton proposal is to make companies justify their pricing, not control it. More important, the industry raised $3 billion in 1993, the second biggest bag of money in its history--and more than it rustled up in 1992. Venture capitalists in particular poured a record $723 million into the industry to fund 92 startups in 1993, says Recombinant Capital consulting firm. Plus, the Brandeis survey says the venture capitalists invested less than they had planned--a slippery measurement. If anything, biotech's push into cost-effective drugs portends a bright future.

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