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Jan 2, 2014

Asia Rises as U.S. Share of Global Research Funding Falls

Asia Rises as U.S. Share of Global Research Funding Falls

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  • A study appearing in the New England Journal of Medicine reports that the U.S.’ global share of biomedical research spending declined from 51% in 2007 to 45% in 2012. Meanwhile, Japan and China saw significant increases in research spending, according to the analysis entitled “Asia’s Ascent—Global Trends in Biomedical R&D Expenditures.”

    R&D spending in the U.S. dropped from $131 billion to $119 billion, when adjusted for inflation while Japan increased spending by $9 billion and China increased by $6.4 billion. Overall, Asia’s share of spending grew from 18% to 24%. Europe came in at 29%. U.S. overall expenditure, declined by 9% when adjusted for inflation, while Asia-Pacific expenditure increased by 51%, with China increasing by 313%. Prior analyses have indicated that the U.S. share of global expenditures were once as high as 80%.

    “The United States has long been a world leader in driving research and development in the biomedical science. It's important to maintain that leadership role because biomedical research has a number of long-term downstream economic benefits, especially around job creation,” says study author Reshma Jagsi, M.D., D.Phil., associate professor of radiation oncology at the University of Michigan Health System.

    Despite funding reductions from the NIH, including a 20% drop in purchasing power since 2003, the researchers discovered that the U.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.

    Dr. Jagsi believes 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 U.S.

    “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. 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,” says study author Justin Chakma, a venture capital investor with Thomas, McNerney & Partners.

    Historically, about half of drugs approved by the U.S. 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.

    “Although our dataset has its limitations, our findings reveal a decline in U.S. financial competitiveness in biomedical R&D and may have implications for the debate over appropriate federal policy in this area,” wrote the analysts in the NEJM article. “The lack of a coordinated national biomedical R&D strategy is disappointing, at a time when mature economies such as those of Japan and Europe have maintained their level of investment in this area.”



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