Strategies to Leverage Research Funding Guiding DOD's Peer Reviewed Medical Research Programs (2004) / Chapter Skim
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2 Sources of Funding for Biomedical Research
2 Sources of Funding for Biomedical Research
Pages 37-54
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From page 37... ...
. Other funders include venture capital funds; colleges and universities; nonprofit research institutions, foundations and other philanthropic and charitable organizations; and state governments.
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Most of the federal funding of health R&D in 1999 was performed by nonfederal research institutions through extramural grants, cooperative agreements, and contracts, with extramural performers accounting for 76 percent of federal expenditures on health R&D. Of the total $11.9 billion spent on extramural health R&D in 1999, institutions of higher education received $8.3 billion, other nonprofits $2.3 billion, industry $0.9 billion, and state and local governments $141.0 million (NIH, 2004b)
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. These independent nonprofit enterprises were created to secure private funding for their agency's activities and facilitate programmatic partnerships between their agency and other organizations -- corporations, foundations, other nonprofits, and other government agencies -- in efforts to improve public health and safety.
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Also listed were eight Promoting Healthy Lifestyles programs, such as: Avon-CDC Foundation Mobile Access Program. Partner: Avon Foundation Price Fellowships for HIV Prevention Leadership.
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industry.3 Like the pharmaceutical industry, the U.S. biotechnology industry is very research-intensive, spending $15.7 billion on research and development in 2001.4 The medical equipment and supplies industry and the health care services industry also invest their own funds in R&D ($3.7 billion and $0.5 billion, respectively, in 2000)
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In 2000, the pharmaceuticals and medicines industry reported company-funded R&D expenditures of $12.9 billion, the medical equipment and supplies industry $3.8 billion, and health care services $0.6 billion, for a total of $17.2 billion (NSF, 2003a)
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of total venture capital was invested in 71 biotechnology companies and 51 medical device companies. Proportionately, biotechnology and medical devices accounted for 20 percent and 7 percent, respectively, of all venture capital investments.
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A few foundations, such as the Juvenile Diabetes Research Foundation International (JDRF) , collaborate with federal agencies on projects of mutual interest, but the amounts of money they provide are modest relative to federal funding.
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, as well as a new research facility, and it provides grants to support life sciences education and research opportunities for K-12 and undergraduate students. The Foundation Center collects data on patterns of giving by these organizations, with the latest figures included in the 2004 edition of its annual report, Foundation Giving Trends (Foundation Center, 2004)
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Most public charities that support medical research are voluntary health agencies (VHAs) , which raise a substantial portion of dollars from the public, but may also seek foundation support.
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The states support R&D through various mechanisms, including direct appropriations to universities, R&D tax credits, the establishment of endowment funds, and the formation of nonprofit corporations. Although there is no complete database of state expenditures for health research, some studies of spending have been conducted by national organizations of both state support of health research or biotechnology and state use of tobacco settlement funds for research.
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Most state economic development funds aim to leverage multiple federal dollars for each state dollar, not the other way around. A few states, such as California and New Jersey, have peer reviewed research grant programs, but these are small relative to federal programs, and they concentrate on leveraging federal funds by supporting exploratory research projects and new investigators to help state medical researchers win R01 (traditional individual investigator-initiated)
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Nevertheless, states do fund medical research and likely would be interested in partnering with federal programs such as CDMRP on projects of mutual interest. As mentioned previously, some states have established programs to support biomedical research, or all areas of research, with dedicated funding from the tobacco settlement or other sources of regular revenues, such as state tobacco taxes.
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. In general, the strategies are to encourage biotechnology firms to locate in the states, enhance the biomedical research capacity of state universities and other research institutions, foster greater industryuniversity interaction, build modern facilities with wet-lab space and specialized equipment to attract new firms, and create publicly supported commercialization, seed, and venture capital funds that can invest in bioscience-related companies (see Box 2-3 for an example)
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, but only 17 percent is estimated for 2004. The states allocated about 36 percent of tobacco settlement funds to reduce budget shortfalls and are expected to allocate about 54 percent in 2004 (U.S.
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venture capital markets are more likely to seek opportunities where the likelihood of near-term payoff is greater. Although academia provides some funds and in-kind support for research, public universities in particular have been struggling with budget reductions caused by state fiscal constraints.
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2004. Presentation by President and CEO of the North Carolina Biotechnology Center at workshop held by the Committee on Alternative Funding Strategies for DOD's Peer Reviewed Medical Research Programs.
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2004b. Venture Capital Stays the Course in Q1 2004 with $4.6 billion Invested (Press Release)
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