- Clinical Trials
- Research News
- Industry Trends
- Agency Actions
- Drug Safety Issues
- Approvals, Launches, & New Indications
- Health Care Reform
Report: U.S. Investment in Biomedical and Health Research on Downward Trend
R&D spending declined by more than $4 billion in 2010–2011 (Oct. 25)
Biomedical and health research and development (R&D) spending from all sources declined by more than $4 billion or 3% between fiscal year (FY) 2010 and FY 2011, according to a report from Research!America, a nonprofit public-education and advocacy group based in Alexandria, Virginia. This represents the first drop in overall spending since the group began compiling R&D data in 2002.
The decline follows an uptick in research funding attributed to the American Recovery and Reinvestment Act (ARRA), which allocated $10.4 billion to the National Institutes of Health (NIH) over two fiscal years (2009–2010). The overall downward trend in R&D spending is coming at a time when other nations are ramping up their own investments in research, the report says. Meanwhile, pending across-the-board budget cuts (sequestration) could reduce federal biomedical and health research funding by 8% to 10% or more.
The report shows varying levels of health research funding in the private and public sector. For example, federal funding for research totaled $39.5 billion in FY 2011 — a 14% decrease from the previous year's total of $45.9 billion. Agency funds were distributed across all 50 states to hospitals, universities, independent research institutes, and small businesses. Under sequestration, the NIH would lose $2.53 billion in funding in FY 2013.
Overall, private industry has continually increased investments in R&D, for a total of $77.6 billion in 2011 — a 1.4% increase from 2010 — despite inflationary pressure and the economic recession. The pharmaceutical industry increased its investment to $38.5 billion — a 3% increase from the previous year. In contrast, biotechnology investment declined by nearly $800 million, or 3%. The medical device and technology sector slightly increased investment in research, totaling $9.8 billion. Currently, more than 80% of R&D among PhRMA (Pharmaceutical Research and Manufacturers of America) member companies is conducted in the U.S., but R&D spending abroad has more than doubled over the past decade.
Aside from federal and industry investment, other institutions spent $19.1 billion on health research — an increase of about 5% from the previous year. Universities increased spending of institutional funds for research to $11.9 billion in 2010 — a 6% increase. Philanthropic spending decreased slightly, while voluntary health groups increased investment in research by 15% — or $131 million — from the previous year.
According to funding projections in the report, the research investment landscape in the U.S. could worsen in 2013 and over the next decade. The scenario is different in other countries; for example, China has identified biotechnology as one of the seven “strategic and emerging industries” (SEIs) that will be primary drivers of the country’s next phase of economic growth, and has pledged to invest $308.5 billion in biotechnology over the next 5 years.
Source: Research!America, October 25, 2012.