As you prepare to take office in a few short weeks and as Americans long for a recession-free U.S. economy in 2009, I am writing to respectfully ask you and your economic team to boldly support the medical-device industry as part of your “Plan to Invest in High-Productivity Manufacturing” as shown on barackobama.com.

In 2007, the sale of U.S. medical devices for minimally invasive surgery, cancer diagnostics and treatment, neurological disorders, and other areas, generated $75.6 billion in revenue. Then, industry experts were predicting a compound annual growth rate of 9% through 2013. That was before the financial markets unraveled. Today, Initial Public Offerings (IPOs) have virtually gone away. Investment banking has changed drastically, with Behr Stearns gone, Lehman Brothers assets frozen, and Merrill Lynch now a division of Bank America. And venture capitalists are holding their cash because their “exit strategy” (IPOs) is gone and banks aren't lending.

The good news is that start-ups continue developing need-driven technology. But many of these small businesses could use additional R&D dollars. Without capital, some technologies may not make it to the operating table, hospital lab, or doctor's office.

Boston Scientific President and CEO Jim Tobin, during a luncheon at the recent Innovations Summit at the Cleveland Clinic, told new medical-device companies to, “Hang on and figure out how to make your cash last, and if you have enough cash to get to market, do it as expeditiously as you can.”

Then what? That's where I believe the Small Business Innovation Research and Small Business Technology Transfer Reauthorization Act of 2008 (S.3362) enters the picture. As you know, the bill was blocked this year in the Senate while you were still serving there. Its passage would make small companies with or without majority ownership by venture-capital firms eligible for federal funding of R&D efforts targeted toward the commercialization of products for the public's benefit. Currently, those firms with majority ownership by venture-capital firms don't qualify.

The specifics of the blocked bill, as I understand it, would make:

• Companies in which venture capital firms own more than 51% eligible for up to 18% of NIH's (National Institutes of Health) SBIR (Small Business Innovation Research) dollars and up to 8% of the other 10 SBIR agencies' SBIR funds, leaving 82% of NIH's SBIR dollars and 92% of the other agencies' NIH dollars for companies without majority ownership by venture-capital firms. This appears to be a win-win for all concerned.

• The SBIR budgets for most agencies would increase from 2.5% of “extramural” R&D budgets to 3.5% over the course of 10 years. The notable exception is the National Institutes of Health, which refers to itself “The Nation's Medical Research Agency.” Why is NIH the exception? Perhaps newly named Health and Human Services Director Tom Daschle may want to put that on his to-do list.

• The STTR (Small Business Technology Transfer) allocation would increase from 0.3% of STTR agencies' extramural R&D budgets to 0.6% over the course of six years, for all STTR agencies including NIH.

• The STTR allocation would increase from $100,000 to $150,000 for Phase I (feasibility study) and from $750,000 to $1 million for Phase II (actual R&D work).

• The SBIR and STTR programs would extend through 2022 and 2023 respectively. Currently, the SBIR program ends March 20, 2009, and the STTR program expires Sept. 30, 2009.

This legislation, if re-introduced and passed, could be a positive step toward transforming Washington from its role as “rescuer” (at taxpayers' expense) during economic crises to proactive partner during times of prosperity.

That, I believe, is change that will benefit all Americans.

This letter was submitted as a blog to the Obama - Biden website (my.barack.com/page/content/hqblog).