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Insight & Intelligence : Feb 23, 2011
Study Finds a Friend at NIH but Will Congress Share the Love?
Paper in NEJM tries to make case for boosting federal research funding amid House leaders’ pursuit of spending cuts.
A paper published in The New England Journal of Medicine (NEJM) engaged in some timely agenda-setting recently when it presented a study quantifying the number of FDA-approved drugs discovered through research at federally funded organizations. It stated that federally backed research resulted in the sanction of 153 drugs, vaccines, and new indications for existing therapies in the U.S. between 1970 and 2009.
Authors of “The Role of Public-Sector Research in the Discovery of Drugs and Vaccines” left no doubt they wanted to weigh in on the ongoing debate over federal funding of basic research, declaring among their conclusions: “Public-sector research has had a more immediate effect on improving public health than was previously realized.”
The paper’s lead author, Ashley J. Stevens, D.Phil., told GEN, “The message that I wanted people to take away from this was that the government puts a lot of funding into research at these various places, and it is primarily to advance the nation’s knowledge base, not to create commercial spinoffs.
“I wanted people to realize that in the course of doing this, you did get these important health benefits to the public and economic development benefits to the companies that take these inventions and develop them,” added Dr. Stevens, special assistant to the vp for research technology development and senior research associate at Boston University’s Institute of Technology Entrepreneurship and Commercialization and a lecturer at the BU School of Medicine.
That message, fair to say, has found a friend at the NIH. Its director, Francis S. Collins, M.D., Ph.D., cited the NEJM study on February 14 from the podium of the press briefing on the budget for his agency and the other agencies that comprise the U.S. Department of Health and Human Services.
Not surprisingly, Dr. Collins defended President Obama’s plan to increase NIH’s budget about 2.4%, or $745 million, for the fiscal year starting October 1. This would take the money available to the institute from $31.24 billion, which was the last-approved budget in 2010, to almost $31.98 billion. Congress has yet to approve a budget for the rest of the 2011 fiscal year; a continuing resolution ends March 4.
Newly empowered House Republicans acted quickly earlier this month to propose a leaner NIH, with the House Appropriations Committee introducing a bill cutting the agency’s budget by 5%, or $1.63 billion. The bill went beyond the billion-dollar reduction proposed by committee chairman Hal Rogers (R-KY) let alone the no-cut, no-growth NIH budget initially offered by the committee until House GOP backbenchers pressed for further reduction. After all, Republicans won control of the chamber based on promises to rein in spending.
Cutting Gov’t Spending
The paper published in NEJM looked at so-called public-sector research institutes (PSRIs). It defines PSRIs to include even privately run universities and private nonprofit research institutes. Both types of organizations, and even many public ones, also raise private funds toward research, whether in the form of new labs and other facilities or endowed chairs for top researchers.
Labeling both public and private institutions “public” for using federal research funding plays into the hands of NIH would-be budget-cutters, who equate growth in federal research spending with an unconstitutionally “big government.”
The Constitutional argument resonates with fiscal conservatives in this year’s majority, among them Tea Party supporters. They note that the constitution framers in 1787 rejected adding to the duties of Congress “encourage, by proper premiums and provisions, the advancement of useful knowledge, and discoveries.”—a proposal introduced by James Madison himself.
But the Bayh-Dole Act of 1980 combined with the rise of biotech in the 1970s, married Washington and the life science industry as partners in commercializing basic research. Indeed between 1991 and 2009, government funded between 60 and 70% of the cost of basic research.
Industry’s share of financing such activities rose until 1999, then declined until 2006 when it resumed its climb again, noted Dr. Stevens, citing research from the Association of University Technology Managers, of which he is president. The remaining funding sources include colleges and universities, nonprofit research institutions, state governments, venture capital funds, foundations, and other philanthropic and charitable organizations.
Public Sector’s Role in Translational Studies
The 153 drugs cited in the NEJM study consist of 102 new molecular entities including eight in vivo diagnostic materials and an over-the-counter product; 36 biologic drugs; and 15 vaccines. With Democrats vowing to resist any cuts, a veteran lobbyist for greater federal research spending says the report will help his cause.
“I think that study really helps justify sustained federal support for NIH,” Jon Retzlaff, managing director of science policy and government affairs for the American Association for Cancer Research, said to GEN. “The NIH and the public sector is continually being asked by Congress and the general public to do more in the translation of those basic discoveries to clinical advances. And I think that report shows there’s been success with NIH in making these discoveries that are being used in the clinical world now.”
The study reported in NEJM also examined NDA approvals between 1990 and 2007. A total of 1,541 NDAs were sanctioned, and 143 of them were generated by PSRIs. Among the total 1,541 NDAs, 348 were given fast-track status and eventual go-ahead under priority review.
Of these priority applications, 66 originated at PSRIs. This represents almost 19% of the total fast-track NDAs that got approved and just over 46% of the total PSRI-generated NDAs. Comparatively, 20% of NDAs stemming from purely private research were approved under priority review. Points like these are likely to be lost on many Congressional critics of federal research funding.
PSRIs Gaining Influence
NIH is the most prolific among the 75 discoverers or co-discoverers of those 153 drugs, with 22 products. Next highest with 11 drugs is another public institution, the University of California system. That raises another question: How efficient is it for NIH to maintain the current system of distributing grants to researchers at other institutions rather than consolidate them and their research in-house at its 27 institutes?
The answer would depend on an endeavor that admittedly would take much more time and effort than the NEJM paper but would be even more valuable. Of importance would be an examination of the cost of developing each of the 153 drugs; which drugs cost the most and least to produce; research costs at public versus private research institutes; and whether the institutions that spent the most produce the most new drugs as a result.
Dr. Stevens pointed out that such an examination would be a tall order. Pharma and biotech companies, he noted, are often uncomfortable pinpointing the research costs of specific drugs. But additional study might offer some answers to why the cost of bringing new drugs to market has ballooned from $318 million in 1987, to $800 million in 2001, to $1.3 billion today, according to the Tufts Center for the Study of Drug Development. Much of that escalation reflects rising clinical costs.
“It feels the discovery part of this is going to be costing somewhere in the range of $500,000 to the $3–4 million range,” Dr. Stevens said. “What you can’t get is the development cost,” he added, cautioning his calculations are estimates at best. “Ballpark, you see numbers of $100 million to $500 million. I think the private investment is going to be 100 times the public investment in this.”
That’s certainly a driver in so many companies cutting R&D costs, as is the parade of drugs set to lose patent protection. Both factors will bring additional research to the PSRIs. And as that happens, PSRIs can be expected to step in and claim more of the spoils such as patents, licensing fees, and royalties.
Where Is the Money Going?
Another issue worthy of additional study is why some drugs are more likely than others to be developed with public money. Half of the 153 drugs identified in NEJM were in just two therapeutic areas: hematology or oncology (40) and infectious disease (36). The authors posit a theory: The top-four categories of discovered drugs correspond to the four NIH institutes with the biggest budgets—National Cancer Institute; National Institute of Allergy and Infectious Diseases; National Heart, Lung, and Blood Institute; and National Institute of Diabetes and Digestive and Kidney Diseases.
“One possible interpretation of this observation is simply that there was more funding available for research involving these disease categories, which resulted in more useful intellectual property,” according to the study. That interpretation was borne out just four days after publication of the NEJM study.
On February 14, NIH published a detailed breakdown of how much the agency awarded in research funding into each of 229 research and disease areas. Compare the funding received by the top four therapeutic areas with the top four therapeutic areas revealed in the NEJM paper: $10.17 billion for hematology and oncology, $4.458 billion for infectious diseases, $2.542 billion for cardiology, and $1.35 billion for metabolic diseases.
All four disease categories have seen projected year-to-year decreases for FY 2011 and FY ’12, reflecting the end of funds available through the $814 billion American Recovery and Reinvestment Act. But when FY ’10 nonstimulus funds are compared evenly with the ’11 and ’12 budgets, funding for the top four stays flat or increases slightly.
Maintaining that trajectory, Retzlaff said, will be priority one for him and should be priority one for the nation. But while President Obama is seeking more NIH money, he has also positioned himself as a cost-cutter in the face of $1 trillion plus deficits.
Alex Philippidis is senior news editor at Mary Ann Liebert, Inc., and Genetic Engineering & Biotechnology News.
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