Figure 22: The Public and Private Sectors Invest Heavily, but Differently, in Biomedical Research. The biotechnology and pharmaceutical
industry invests 40% more than the NIH in biomedical research. However, little of this investment is made in basic research, because the private
sector business model requires rapid returns on its investments in order to remain viable. In contrast, the NIH dedicates more than 50% of its
budget to fund basic research, which informs the translational and clinical research performed by the private sector. Continued complementary
investments by both sectors are required for continued success.
returns. Thirty years ago, the Bayh–Dole Act was passed, allowing
universities and investigators to lay claim to intellectual property
developed using federal research dollars. This has helped spawn
the multibillion dollar biotech sector, where entrepreneurial
researchers have created companies from their discoveries, adding
high-skilled jobs and creating new industries as a direct result of
federal research investments which aid in moving basic findings to
effective treatments in the clinic.
One of the most paradigm-shifting federally funded biomedical
research projects in the past 20 years was the Human Genome
Project, which serves as a case study in how research investments
generate significant financial and societal returns. Much as NASA’s
lunar mission spurred rapid advances in communications and
aeronautics that quickly opened new doors to widespread use of
associated technologies, the sequencing of the genome has
fundamentally changed the way we think about human health and
enabled entirely new approaches to research. Analysis of the 15-
year, $3.8-billion project indicated that the investment resulted in
as much as $796 billion in associated economic activity and raised
personal income by $244 billion. In 2010, as many as 310,000 jobs
owed their existence to the effects of this project (117). The
information and technologies emerging from the Human Genome
Project radically changed researchers’ approaches to studying
cancer, a disease driven by genetic abnormalities, and as a result
the pace of progress has been accelerated dramatically.
The NIH is the leading supporter of biomedical research in the
world, research that improves human health. Thanks in large part
to NIH research, the average life expectancy in the U.S. today is
nearly age 79, almost 30 years longer than it was in 1900, and
the proportion of older people with chronic disabilities has
dropped by nearly 1/3 over the past 25 years.
The NIH is comprised of 27 research-focused institutes and
centers, including the NCI, which is the largest single NIH
institute. Research at these institutes and centers, called
intramural research, accounts for approximately 11% of the NIH
budget and involves nearly 6,000 researchers and staff, in
addition to 5,000 trainees.
More than 80% of the NIH budget is competitively awarded to
researchers as extramural research grants, rigorously peer
reviewed for relevance and scientific and technical merit.
NIH funding generates scientific discoveries and fuels new
economic activity and employment in the communities that
receive its funds. NIH funds support the work of more than
432,000 researchers and research personnel at more than 3,000
universities, medical schools, medical centers, teaching hospitals,
small businesses and research institutions in every state.
In 2011, NIH research funding created 432,094 jobs and
generated $62.13 billion in new economic activity across the