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Original Contribution
September 21, 2005

Financial Anatomy of Biomedical Research

Author Affiliations
 

Author Affiliations: The Alerion Institute, North Garden, Va (Dr Moses); The Boston Consulting Group, Bethesda, Md (Dr Moses and Mr Matheson); Department of Medicine and Health Policy, Massachusetts General Hospital and Harvard Medical School, Boston (Dr Thier); Department of Neurology, University of Rochester Medical Center, Rochester, NY (Dr Dorsey). Dr Dorsey performed most of his work while at the Hospital of the University of Pennsylvania.

JAMA. 2005;294(11):1333-1342. doi:10.1001/jama.294.11.1333
Abstract

Context Public and private financial support of biomedical research have increased over the past decade. Few comprehensive analyses of the sources and uses of funds are available. This results in inadequate information on which to base investment decisions because not all sources allow equal latitude to explore hypotheses having scientific or clinical importance and creates a barrier to judging the value of research to society.

Objective To quantify funding trends from 1994 to 2004 of basic, translational, and clinical biomedical research by principal sponsors based in the United States.

Design Publicly available data were compiled for the federal, state, and local governments; foundations; charities; universities; and industry. Proprietary (by subscription but openly available) databases were used to supplement public sources.

Main Outcome Measures Total actual research spending, growth rates, and type of research with inflation adjustment.

Results Biomedical research funding increased from $37.1 billion in 1994 to $94.3 billion in 2003 and doubled when adjusted for inflation. Principal research sponsors in 2003 were industry (57%) and the National Institutes of Health (28%). Relative proportions from all public and private sources did not change. Industry sponsorship of clinical trials increased from $4.0 to $14.2 billion (in real terms) while federal proportions devoted to basic and applied research were unchanged. The United States spent an estimated 5.6% of its total health expenditures on biomedical research, more than any other country, but less than 0.1% for health services research. From an economic perspective, biotechnology and medical device companies were most productive, as measured by new diagnostic and therapeutic devices per dollar of research and development cost. Productivity declined for new pharmaceuticals.

Conclusions Enhancing research productivity and evaluation of benefit are pressing challenges, requiring (1) more effective translation of basic scientific knowledge to clinical application; (2) critical appraisal of rapidly moving scientific areas to guide investment where clinical need is greatest, not only where commercial opportunity is currently perceived; and (3) more specific information about sources and uses of research funds than is generally available to allow informed investment decisions. Responsibility falls on industry, government, and foundations to bring these changes about with a longer-term view of research value.

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