Amid Economic Crisis, NIH Seen as Source of Hope for Better Health and Fatter Wallets

Since the National Institutes of Health (NIH) budget doubled between 1998 and 2003, advocates for medical research have faced an uphill battle maintaining federal support for innovative, life-saving research. Congress failed to increase NIH funding for the past five years, leading to a 15 percent net decline in funding once inflation is considered. Success rates—the percentage of reviewed grants that receive funding in a given year—plummeted from a historic 30 percent norm to approximately 20 percent in fiscal year (FY) 2008.

As FY 2008 came to a close, NIH identified 14,000 meritorious applications that could not be funded due to insufficient budgets, according to NIH Acting Director Raynard S. Kington, MD, PhD. Although President Barack Obama promised during his campaign to “double budgets of key science agencies such as the National Institutes of Health … over the next 10 years,” the nation’s economic troubles had many advocates fearful for another difficult year arguing that additional funding for medical research is necessary if we are to find new treatments and cures for diseases affecting the American people.

As the nation’s unemployment rate soared to 7.6 percent in January 2009—the highest level in 26 years—Congress publicly announced its dedication to passing legislation that stimulates the economy and encourages job creation. While Congress’ economic focus could have deterred medical research advocates from making the case for a robust research enterprise, new economic data formed the backbone of a fresh lobbying approach. Advocates hammered the argument that an investment in research is an investment in new jobs, private business, and state budgets.

Families USA—a nonprofit organization dedicated to advocating for high-quality, affordable health care—compiled data that support the argument that medical research not only improves the lives of the American people via better health outcomes, but by revitalizing state and local economies as well.

According to the report “In Your Own Backyard: How NIH Funding Helps Your State’s Economy,” NIH invested approximately $22.8 billion in research to universities and research institutions in FY 2007. In turn, that investment spurred $50.5 billion in new state business. In addition, NIH grants and contracts created 350,000 jobs that offered more than $18 billion in wages. The average salary for those positions was $52,000, almost 25 percent higher than the national average. These skilled jobs are key to addressing the economic crisis. According to Secretary-Treasurer for the Service Employees International Union Ann Burger, “We’ve got to create good jobs. Creating low-wage jobs is not going to do what we need to do for our families and our economy.”

Each funded grant creates approximately seven jobs, according to NIH, but the economic value of NIH funding extends well beyond the individual research lab. “Awards help universities, medical schools, and other research institutions … expand their programs, to grow in reputation, and, in turn, to attract additional funding from other sources,” states Families USA. According to the Association of American Medical Colleges, in 2005, its member medical schools and teaching hospitals had an economic impact of $451 billion. In total, medical schools and teaching hospitals offered three million full-time jobs and contributed $20 billion in state revenue. As state governments are reporting significant budget deficits—the Center on Budget and Policy Priorities reports that 41 states will face deficits in FY 2009 or 2010—academic investments may be one opportunity to support states in a way that offers long-term growth rather than a one-time, short-term fix.

NIH has also studied how research funding impacts the economy, particularly in the long term. The agency evaluated the outcomes of 31,144 grants awarded in FY 2000. These grants produced 30,477 invention disclosures, 17,341 nonprovisional patent applications, and 6909 patents, which inject additional money into local economies.

As an example of NIH’s economic leverage on a smaller scale, Rutgers State University of New Jersey Professor of Biochemistry Joachim Kohn, PhD, explained to the House Energy and Commerce Subcommittee on Health in late 2008 how his $4.5 million in direct NIH support “resulted in technology commercialization efforts in four start-up companies … which, over the last three years alone, have attracted almost $120 million in private equity funding. As a consequence of these investments, these companies have created more than 100 high-salary jobs.”

Partially in recognition of the economic benefits NIH research creates, the U.S. House of Representatives included $3.5 billion for NIH research and infrastructure improvements in its economic stimulus package, initially passed January 28. Spearheaded by Sens. Arlen Specter (R-PA) and Tom Harkin (D-IA), the Senate countered the House’s estimation of NIH’s funding needs and dedicated $10 billion for NIH over the next two years. According to Sen. Specter, “Including funding for the NIH in the Stimulus will provide needed economic stimulus, enable long-term economic growth, and save lives.” During negotiations between the House and Senate, the research community’s persistence—along with Sen. Specter and Sen. Harkin’s steadfast support—maintained the Senate’s research allocation in the final bill, which was ultimately passed by the House and Senate February 13, and signed into law, February 17 (Table 1). Clearly, advocates of medical research were successful in making an economic argument for research funding.

Table 1


Yet the accumulated data cited by advocates only illustrate tangible economic benefits such as new jobs, increased wages, and business activity. Many in the medical community recognize the long-term financial benefits that improved health care can bring. Medical research can uncover forms of prevention that reduce the number of people stricken by disease, thereby limiting health-care costs. Research can also identify treatments and cures that increase life expectancy and worker productivity. According to Kevin M. Murphy, PhD, and Robert H. Topel, PhD, improved life expectancy between 1970 and 2000 added $3.2 trillion per year to national wealth. Murphy and Topel expect a permanent 1 percent decline in mortality from cancer to provide almost $500 billion in wealth, while a cure would be worth approximately $50 trillion.

Given the success of research advocates’ efforts to include NIH funding in the stimulus package, advocates should continue to promote the broader economic merits of medical research in relation to President Obama and Congress’ push for health-care reform. Sen. Specter has already argued that “NIH is part of the solution to the long-term problems of health-care costs and U.S. competitiveness in health care.” Advocates should encourage greater funding for comparative effectiveness research, additional support for health services research that assesses how to improve quality of care and reduce medical errors, and dedicated attention to research related to our nation’s rampant health and health-care disparities.

First and foremost, advocates lobby for increased funding for medical research so suffering patients have hope for a future where they are not bridled by the limits of their diseases. But given the current political climate where economic value is the new metric for approval, advocates would be foolhardy to not continue to pursue an economic argument for investing in NIH research. Battling 26 million people’s fight with kidney disease has encouraged some research funding. Battling 300 million people’s need for effective, affordable health care may encourage sustainable research support.