US Research Spending Decline Driven By Industry
ANN ARBOR, Mich., Jan. 2, 2014 — A sharp drop in US spending on biomedical research has been driven almost entirely by reduced investments from industry, not the public sector, a new study finds.
The US’s global share of biomedical research spending fell from 51 percent in 2007 to 45 percent in 2012, from $131 billion to $119 billion, while Japan increased spending by $9 billion and China by $6.4 billion, according to the study, which appears in the Jan. 2 edition of New England Journal of Medicine.
() Overall, Asia’s share of spending grew from 18 percent to 24 percent, while Europe held steady at 29 percent.
Prior analyses have suggested the US’s share of global expenditures were once as high as 80 percent. This new analysis was conducted by researchers from industry and academia, including both medical researchers and economists.
“The United States has long been a world leader in driving research and development in the biomedical sciences,” said study author Reshma Jagsi, M.D., D.Phil., associate professor of radiation oncology at the University of Michigan Health System. “It’s important to maintain that leadership role because biomedical research has a number of long-term downstream economic benefits, especially around job creation.”
Despite reductions in funding from the National Institutes of Health, including a 20 percent drop in purchasing power since 2003, the researchers discovered that the US’s decline was driven almost entirely by reduced investment from industry, not the public sector. This includes support for clinical trials testing potential new therapies.
Jagsi suggests that this may boil down to fewer regulations and less expense to conduct research in Asia — labor costs less, government may be offering subsidies and the research infrastructure is not as bureaucratic as it is in the US.
“We were surprised the impact of industry funding was that dramatic, but it’s key to note that government funding is equally important to maintain or grow,” said study author Justin Chakma, a venture capital investor with Thomas, McNerney & Partners in La Jolla, Calif. “Research funded through the National Institutes of Health helps scientists understand how diseases work — this will happen slower as NIH funding continues to be cut.”
Historically, about half of drugs approved by the US Food and Drug Administration had some federal government funding during the course of the research and development.
The authors note the critical need for increased NIH funding coupled with incentives to industry for investing in biomedical research and development here. They call the lack of a coordinated national biomedical R&D strategy “disappointing.”
Additional study authors include: Gordon H. Sun, M.D., M.S., University of Michigan Health System, VA Ann Arbor Healthcare System, Robert Wood Johnson Foundation Clinical Scholars Program; Jeffrey D. Steinberg, Ph.D., Singapore Bioimaging Consortium, Agency for Science, Technology and Research; and Stephen M. Sammut, M.A., MBA, Wharton School of Business, University of Pennsylvania.