Increasing NIH funding key to innovation and competition

The federal government, principally through the National Institutes of Health (NIH), funds scientific research related to biology and human health that sets the stage for applied research and development (R&D) activity by industry, ultimately leading to the commercialization of new medicines and treatments. New drugs not only improve the quality and length of lives but reduce the costs to society from illness. In order to accelerate biomedical innovation, Congress doubled NIH founding around the turn of the millennium. The results are paying off with basic and translational research, including discoveries of the genetic basis of disease and development of related diagnostics and therapies. For example, cancer therapies are being tailored not just to a patient’s genome but to the genome of that patient’s tumors. Other discoveries include sickle cell genomic therapy,1 immunotherapy for breast cancer,2 a universal flu vaccine, the TAILORx genetic screening breast cancer trial,3 and discoveries for the treatment of Alzheimer’s.4 NIH funding overall plays an important role, not only in biomedical innovation, but in enabling a competitive U.S. life sciences industry, and the millions of good paying jobs associated with it. In fact, while overall manufacturing jobs have declined in the last two decades, the number of biopharmaceutical industry jobs has grown. As such, increasing NIH funding is important not only to improving the health of Americans, but in reducing health care costs and spurring global life sciences competitiveness.

Boosting NIH funding has long been a nonpartisan issue. For example, at a 2015 forum, former Republican House Speaker Newt Gingrich and Senator Elizabeth Warren (D-MA) both called for significant increases in NIH funding.5 And there is currently strong bipartisan support in Congress, with senators Roy Blunt (R-MO) and Patty Murray (D-WA) and representatives Rosa DeLauro (D-CT) and Tom Cole (R-OK) leading the charge for increases in NIH funding. Moreover, Americans are extremely optimistic and interested in biomedical breakthroughs. A recent survey conducted on behalf of the USA Today Network and the Charles C. Koch Institute asked Americans to name three areas of technological change they were most excited about for the future. Medical innovation, including pharmaceutical breakthroughs, ranked number 1, by an equal proportion (61 percent) of Democrats and Republicans, and an even higher share (66 percent) of rural Americans.6

However, even with recent increases, NIH funding as a share of GDP in 2019 is still 12 percent below that of 2003. Getting NIH funding to that 2003 level will require Congress to appropriate an additional $7.4 billion in FY 2020.7 As such, Congress should increase the NIH budget by around $8 billion annually over the next two years, and then maintain regular steady increases—ideally 2 to 3 percentage points faster than the nominal rate of GDP growth.

This report briefly discusses the structure and role of NIH. It then examines NIH funding history over the last two decades, and reviews the scholarly evidence on the role of drug innovation in improving human health and its effect on the U.S. economy. The report then reviews studies examining the role of NIH on biomedical innovation and how it supports U.S. biopharmaceutical industry competitiveness. Finally, the report discusses how, in an effort to foster a thriving biopharmaceutical industry, many of America’s major competitors have increased funding for government biomedical research at a much faster rate than the United States.