Assessment of the
SBIR and STTR
Programs at the National Institutes of Health
Committee on the Assessment
of the SBIR and STTR Programs at NIH
Board on Science, Technology, and Economic Policy
Policy and Global Affairs
A Consensus Study Report of
THE NATIONAL ACADEMIES PRESS
Washington, DC
www.nap.edu
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This activity was supported by a contract between the National Academy of Sciences and the National Institutes of Health (HHSN263201800029I, Order No. 75N98019F00860). Any opinions, findings, conclusions, or recommendations expressed in this publication do not necessarily reflect the views of any organization or agency that provided support for the project.
International Standard Book Number-13: 978-0-309-27175-2
International Standard Book Number-10: 0-309-27175-4
Digital Object Identifier: https://doi.org/10.17226/26376
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Suggested citation: National Academies of Sciences, Engineering, and Medicine. 2022. Assessment of the SBIR and STTR Programs at the National Institutes of Health. Washington, DC: The National Academies Press. https://doi.org/10.17226/26376.
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COMMITTEE ON THE ASSESSMENT OF THE SBIR AND STTR PROGRAMS AT NIH
Maryann P. Feldman, Co-Chair, University of North Carolina at Chapel Hill
Scott Stern, Co-Chair, Massachusetts Institute of Technology
Gavi Begtrup, Eccrine Systems, Inc.
Emily Cox Pahnke, University of Washington
Joshua Graff Zivin, University of California, San Diego
Amol M. Joshi, Wake Forest University
Alicia Löffler, Northwestern University
Amalia Miller, University of Virginia
Mary Pat Moyer (NAE), INCELL Corporation, LLC
Kyle Myers, Harvard Business School
Phillip Phan,* Johns Hopkins University
Bhaven Sampat, Columbia University
Stephanie Shipp, University of Virginia, Biocomplexity Institute
Clay B. Thorp, Hatteras Venture Partners
Dashun Wang, Northwestern University
*Resigned from the committee effective August 14, 2020.
STUDY STAFF
Gail Cohen, Study Director
Meghan Ange-Stark, Associate Program Officer (through July 2021)
Sophie Billinge, Senior Program Assistant
David Dierksheide, Program Officer
Frederic Lestina, Research Associate (through September 2020)
Clara Savage, Senior Finance Business Partner
CONSULTANTS
Evan E. Johnson, Principal Consultant
Lauren Lanahan, Consultant
BOARD ON SCIENCE, TECHNOLOGY, AND ECONOMIC POLICY
Adam B. Jaffe, Chair, Brandeis University
Noël Bakhtian, Lawrence Berkeley National Laboratory
Jeff Bingaman, Former U.S. Senator, New Mexico
Brenda J. Dietrich (NAE), Cornell University
Brian G. Hughes, HBN Shoe, LLC
Adriana Kugler, Georgetown University
Arati Prabhakar (NAE), Founder and CEO, Actuate
Paula E. Stephan, Georgia State University
Scott Stern, Massachusetts Institute of Technology
John C. Wall (NAE), Cummins, Inc. (Retired)
John L. Anderson (NAE), Ex Officio Member, National Academy of Engineering
Victor J. Dzau (NAM), Ex Officio Member, National Academy of Medicine
Marcia McNutt (NAS/NAE), Ex Officio Member, National Academy of Sciences
STAFF
Gail Cohen, Director
Meghan Ange-Stark, Associate Program Officer (through July 2021)
Sophie Billinge, Senior Program Assistant
David Dierksheide, Program Officer
Frederic Lestina, Research Associate (through September 2020)
Clara Savage, Senior Finance Business Partner
Preface
The Small Business Innovation Research (SBIR) program has become the largest and most comprehensive public research and development funding program for small business research in the United States, and indeed has been emulated by other countries. An underlying tenet of the SBIR program, and the related Small Business Technology Transfer (STTR) program, is that small and young firms are an important source of new ideas that provide the basis for technological innovation, productivity increases, and subsequent economic growth. Predicated on the observation that it is difficult for small and young firms to find financial support for their ideas, the SBIR/STTR programs have become known as America’s Seed Fund. Yet this characterization captures only one dimension of the legislative objectives and operation of the program. By involving qualified small businesses in the nation’s research and development efforts, SBIR/STTR awards stimulate the development of innovative technologies, help move research closer to the market, and address the needs of citizens underserved as a result of limited market incentives. Equally important, the SBIR/STTR programs aim to help federal agencies fulfill their missions and objectives, and provide a pathway for firms owned by women and socially or economically disadvantaged persons.
This report is the result of a request by Congress for an assessment of the SBIR/STTR programs at each of the principal agencies that conduct or fund research and development activities across the federal government. Specifically, this report focuses on the operation and performance of the SBIR/STTR programs across the National Institutes of Health (NIH), and so offers a timely opportunity to assess the programs in a holistic manner. Most notably, the committee convened by the National Academies of Sciences, Engineering, and Medicine to carry out this study undertook a detailed assessment of the process by which SBIR and STTR awards are made across the 24 NIH institutes and centers that participate in the programs, a survey of the landscape of awards that have been granted (broken down by geography, gender, and socioeconomic characteristics, as well as areas of research), and a detailed quantitative analysis examining the innovation and commercialization outcomes of firms participating in the
programs (compared with those that did not receive an award or did not participate in the programs). Collectively, these analyses, documented in this report, are intended to offer a more comprehensive and precise assessment of the SBIR and STTR programs than has been provided in previous studies of this agency carried out by the National Academies. Here we highlight three broad thematic conclusions.
First, the NIH SBIR/STTR programs are a critical element—but only one element—within the broader U.S. health and life sciences innovation system. Specifically, the effectiveness of the life sciences innovation system depends on a productive interplay among research that is publicly funded (particularly through the overall NIH budget), research conducted within public research institutions (most notably universities and academic medical centers) as well as within NIH, and the critical role played by the private sector (including both large and small and both young and old companies). Within that system, the NIH SBIR/STTR programs provide a critical and dedicated channel through which small and young firms are able to contribute in a meaningful and sustained way to research and innovation aimed at advancing life sciences innovation and ultimately health outcomes.
Second, the effectiveness of the SBIR/STTR programs depends importantly on the operational means by which the programs are administered within NIH. This report focuses significant attention on assessing the operational performance of the programs across the 24 participating institutes and centers, including the community outreach, reviewer selection, review, and postaward processes. Based on this assessment, the report offers suggestions for improving the program operations to make better use of the public’s investment.
Third, we believe that the NIH SBIR/STTR programs are best understood on their own terms. By statute, the SBIR program is a “small business innovation research” program. While the report draws comparisons between outcomes from the Research Project Grant (R01) and SBIR/STTR programs, it is important to understand the particular needs of the innovative small firms targeted by the NIH SBIR and STTR programs. Given that these programs are intended to stimulate technological innovation by such firms that is directly linked to the broader mission needs of the Department of Health and Human Services, the report considers both traditional innovation metrics (such as patents and other markers of early-stage commercialization) and the drugs and devices that are linked to SBIR/STTR awards.
We would also like to highlight three central takeaways from the report.
First, the committee found quantitative evidence that the NIH SBIR/STTR programs fulfill their broad missions by funding U.S. small businesses to conduct high-quality and commercially relevant life sciences biomedical research that contributes to U.S. leadership in the life sciences innovation system.
Second, while the programs are to be commended for this role, their administration is both unnecessarily complex and not timely enough to serve the unique needs of small and young innovation-driven life sciences businesses.
There is significant heterogeneity in the outreach and selection processes across the 24 distinct SBIR/STTR programs, leading to significant access and administration barriers for small and young firms. Moreover, despite significant improvements in the timeliness of notification and issuance of awards in other agencies’ SBIR/STTR programs, the significant length of time that elapses before NIH SBIR/STTR awardees are notified of and receive their awards is an important barrier to the programs achieving their objectives. The committee therefore recommends that Congress consider authorizing a meaningful pilot study that would allow the NIH programs to make their processes more timely and so enhance their ability to meet the needs of small and young businesses.
Finally, the NIH Small Business Education and Entrepreneurial Development (SEED) Office coordinated with other parts of NIH on the committee’s request for nonpublic data, including data that allowed the committee to assess innovation and commercialization outcomes for both firms that received an award and those that applied for but did not receive an award. While these detailed data did allow the committee to undertake a holistic yet quantitative analysis of the program outcomes, the programs’ effectiveness is likely to be improved over time through a high level of commitment to data transparency and (appropriately protected) access by independent researchers and subsequent National Academies consensus committees.
ACKNOWLEDGMENTS
We would like to express our appreciation for insights, information, experiences, and perspectives provided by invited speakers during the conduct of this study. We recognize the considerable efforts made by NIH, especially staff in the SEED Office, who both facilitated access to appropriate staff within NIH and coordinated the committee’s requests for information, with appropriate safeguards, that made this assessment robust. The committee also wants to thank Evan Johnson, principal consultant, and Lauren Lanahan for their invaluable contributions of research and technical assistance in the preparation of this report. We would like to thank Jorge Guzman for his expertise in and guidance with the Startup Cartography Project. Contributions from University of North Carolina at Chapel Hill undergraduate students Nathan Alexander and Zainab Maniya, and Massachusetts Institute of Technology undergraduate Michael Carolan advanced our work. We also thank the production staff for their assistance in preparing this report for publication. Finally, we would particularly like to recognize the leadership of Gail Cohen and the contributions of the National Academies staff, especially Meghan Ange-Stark, David Dierksheide, and Sophie Billinge.
Maryann P. Feldman | Scott Stern |
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Acknowledgment of Reviewers
This Consensus Study Report was reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise. The purpose of this independent review is to provide candid and critical comments that will assist the National Academies of Sciences, Engineering, and Medicine in making each published report as sound as possible and to ensure that it meets the institutional standards for quality, objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process.
We thank the following individuals for their review of this report: Case Cortese, California Institute of Technology; Timothy Folta, University of Connecticut; Sherry Glied, New York University; Anna Goldstein, University of Massachusetts; Lawrence Goldstein, University of California, San Diego; Melissa Graebner, University of Illinois; Nichole Mercier, Washington University in St. Louis; Todd Ponzio, Wake Forest Innovations; David Smelson, University of Massachusetts.
Although the reviewers listed above provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations of this report nor did they see the final draft before its release. The review of this report was overseen by Philip Neches, California Institute of Technology. He was responsible for making certain that an independent examination of this report was carried out in accordance with the standards of the National Academies and that all review comments were carefully considered. Responsibility for the final content rests entirely with the authoring committee and the National Academies.
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Contents
Establishment of the SBIR and STTR Programs: Background and Context
Theoretical Support for the SBIR and STTR Programs
Conflicting Programmatic Goals
The National Academies Study Mandate
2 FRAMEWORK FOR EVALUATING THE SBIR/STTR PROGRAMS AT THE NATIONAL INSTITUTES OF HEALTH
Broad Policy Rationale for the SBIR/STTR Programs
Broad Challenges Facing SBIR/STTR Assessment
Overview of the SBIR and STTR Programs at NIH
Differences Across NIH Institutes and Centers
4 THE LANDSCAPE OF NIH SBIR/STTR AWARDEES
Distribution over Time: Applications, Awards, and Total NIH Funding
List of Acronyms
AANAPISI |
Asian American, Native American, and Pacific Islander–serving institution |
AAP |
Applicant Assistance Program |
AI |
artificial intelligence |
ARRA |
American Recovery and Reinvestment Act |
BLA |
biologics license application |
CAP |
Commercialization Accelerator Program |
CARE |
Connecting Awardees with Regulatory Experts |
CRP |
Commercialization Readiness Pilot |
CSR |
Center for Scientific Review |
DOE |
Department of Energy |
DUNS |
Dun & Bradstreet Data Universal Numbering System |
EIR |
Entrepreneur in Residence |
ES |
environmental science |
FDA |
Food and Drug Administration |
FY |
fiscal year |
GAO |
U.S. Government Accountability Office |
GSA |
General Service Administration |
HBCUs |
historically Black colleges and universities |
HSI |
Hispanic-serving institution |
IC |
institutes and centers |
IDeA |
Institutional Development Award Program |
IP |
intellectual property |
IPO |
initial public offering |
IRG |
Internal Review Group |
K99/R00 |
Pathway to Independence Award program |
MBDA |
Minority Business Development Agency |
MHS |
Marine Hospital Service |
mRNA |
messenger RNA |
MSI |
minority-serving institution |
NASEM |
National Academies of Sciences, Engineering, and Medicine |
NCAI |
NIH Centers for Accelerated Innovations |
NCATS |
National Center for Advancing Translational Sciences |
NCCIH |
National Center for Complementary and Integrative Health |
NCI |
National Cancer Institute |
NDA |
new drug application |
NEI |
National Eye Institute |
NHGRI |
National Human Genome Research Institute |
NHLBI |
National Heart, Lung, and Blood Institute |
NIA |
National Institute on Aging |
NIAAA |
National Institute on Alcohol Abuse and Alcoholism |
NIAID |
National Institute of Allergy and Infectious Diseases |
NIAMS |
National Institute of Arthritis and Musculoskeletal and Skin Diseases |
NIBIB |
National Institute of Biomedical Imaging and Bioengineering |
NICHD |
National Institute of Child Health and Human Development |
NIDA |
National Institute on Drug Abuse |
NIDCD |
National Institute on Deafness and Other Communication Disorders |
NIDCR |
National Institute of Dental and Craniofacial Research |
NIDDK |
National Institute of Diabetes and Digestive and Kidney Diseases |
NIEHS |
National Institute of Environmental Health Sciences |
NIGMS |
National Institute of General Medical Sciences |
NIH |
National Institutes of Health |
NIMH |
National Institute of Mental Health |
NIMHD |
National Institute on Minority Health and Health Disparities |
NINDS |
National Institute of Neurological Disorders and Stroke |
NINR |
National Institute of Nursing Research |
NLM |
National Library of Medicine |
NME |
new molecular entity |
NOSI |
Notice of Special Interest |
NSF |
National Science Foundation |
ORIP |
Office of Research Infrastructure Programs |
P.L. |
public law |
PAR |
Program Announcement with Special Receipt, Referral, and/or Review Consideration |
PAS |
Program Announcement with Set-Aside Funds |
PBI |
predominately Black institution |
PCR |
polymerase chain reaction |
PHS |
U.S. Public Health Service |
PI |
principal investigator |
PMA |
Premarket Approval Application |
POC |
proof of concept |
R/R&D |
research or research and development |
R&D |
research and development |
R01 |
Research Project Grant |
REACH |
Research Evaluation and Commercialization Hubs |
RFA |
Request for Applications |
RFP |
Request for Proposals |
SAM |
System for Award Management |
SBA |
Small Business Administration |
SBC |
small business concern |
SBIR |
Small Business Innovation Research |
SCP |
Startup Cartography Project |
SDB |
socially and economically disadvantaged small business |
SED |
socially and economically disadvantaged |
SEED |
Small Business Education and Entrepreneurial Development |
SEPA |
Science Education Partnership Award |
SRO |
scientific review officer |
STEM |
science, technology, engineering, and mathematics |
STTR |
Small Business Technology Transfer |
TABA |
Technical and Business Assistance |
TCUs |
tribal colleges and universities |
URM |
underrepresented minority |
USC |
United States Code |
USPTO |
United States Patent and Trademark Office |
WIPO |
World Intellectual Property Organization |
WOSB |
woman-owned small business |
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