Sources of Medical Technology Universities and Industry (1995) / Chapter Skim
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2 RECENT TRENDS IN SUPPORT FOR BIOMEDICAL RESEARCH AND DEVELOPMENT
2 RECENT TRENDS IN SUPPORT FOR BIOMEDICAL RESEARCH AND DEVELOPMENT
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in the evolution of modern medical devices and biotechnology drugs. To provide some background for such analysis, this chapter will describe the major sources of financing for biomedical R&D, updating in some respects two useful earlier analyses by Ginzberg and Dutka (1989)
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The difference, $17 billion or 54 percent, is financed by health R&D spending in the private sector-primarily industry, but also private nonprofit organizations such as the Howard Hughes Medical Institute and other foundations. Industry was the largest single sponsor of biomedical R&D in 1993, financing in excess of 50 percent of all biomedical R&D (although, as we will see, the nature of this R&D is different in several respects from research funded by federal spending)
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This view was successfully articulated by Vannevar Bush in an influential report, Science the Endless Frontier, that proposed large-scale public sector funding for basic research, including significant support for biomedical R&D (Bush, 19451. As a consequence of this view, public sector spending for biomedical research, as well as for academic research in all areas, increased enormously as illustrated in Figure 2-2.
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See Appendix table 4-15, in National Science Board, 1993. 4These figures use health spending for DHHS, Department of Veterans Affairs, and the Department of Education; they are not comparable to NIH data, which include the health-related components of all agencies' R&D, irrespective of their formal budget classifications.
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federal laboratories. Universities and academic medical centers are the largest recipients of these extramural funds, receiving nearly 75 percent of all extramural spending (see Figure 2-4; U.S.
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, 1993a. A Change in the Emphasis of Federal Spending In recent years, concern in Congress over the federal deficit and efforts to control the increase in federal spending have created increased competition for appropriations and focused attention explicitly on the results of public spending for biomedical research; NIH's National Cancer Institute, for example, was recently chastised for failing after 20 years of large-scale public spending to dem
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TABLE 2-2 Estimated Federal Deriding for Medical Device-related R&D (in million dollars) Percent Agency FY 1991 FY 1992Change National Institutes of Health 378.9 354.4-6 National Science Foundation 18.0 18.00 Department of Defense 22.8 15.0-34 Department of Veterans Affairs 9.3 10.513 Food and Drug Administration 9.4 10.29 Department of Energy 2.7 5.8115 National Aeronautics and Space Administration 4.9 4.90 Department of Education 2.3 2.30 National Institutes of Standards and Technology 0.5 0.50 TOTAL SOURCE: Littell, 1994.
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Whereas the United States has enjoyed a competitive advantage in many high technology fields, there is a perception that other countries may have developed more effective means for the direct translation of new knowledge into commercial products. As indicated by a number of forums, reports, and congressional hearings, the consequence of this view is that federal funding for research will become increasingly tied to societal goals.
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As examples, projects recently funded by ATP include development of synthetic polymers as big-absorbable materials for use in orthopedics; development of implantable "microreactors," containing living cells that are isolated from the body's immune system, to treat diseases requiring bioagents produced by the cells; and the use of multi-photon detector technology to develop radioisotope detection and measurement systems for use in diagnostics (AAAMI, 1994b; AAAS, 1993b)
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According to the Pharmaceutical Manufacturers Association (PMA; 1993b) , there were 136 pharmaceutical companies operating in the United States in 1993.
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. Clinical evaluation phases I through IV comprise about 30 percent of R&D spending, and probably represent the largest component of industry funding to universities and academic medical centers (PMA, 1993b)
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Within this context, the distinction between pharmaceutical companies and biotechnology companies is blurring as pharmaceutical companies are increasingly using biotechnology techniques to develop new drugs. According to the BCG study, 33 percent of research projects in major pharmaceutical companies in 1993 were based on biotechnology, compared with only 2 percent in 1980.
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3,567 1 ,321 1 9 8 1 - 1 984 1 989-1 992 FIGURE 2-8 Average number of patients per clinical trial. SOURCE: Boston Consulting Group, 1993.
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SOURCE: PMA, Biotechnology Medicines in Development, 1993. Research and Development Investments by the Medical Devices Industry In contrast to pharmaceuticals and biotechnology, medical devices encompass a more diverse group of products, ranging from disposable needles to sophisticated and expensive modalities such as magnetic resonance imaging (MRI)
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RECENT TRENDS IN SUPPORT FOR BIOMEDICAL R&D TABLE 2-4 Biotechnology Medicines or Vaccines Approved by the Food and Drug Administration, 1993 29 Year Product Indications Company Approved Beta interferon Multiple sclerosis Chiron 1993 DNAse Cystic fibrosis Genentech 1993 Factor vm Hemophilia Genentech, 1993 Genetics Institute IL-2 Renal cell cancer Chiron 1992 Indium-111-labeled Cancer imaging antibody Cytogen 1992 Aglucerase Gaucher's disease Genzyme 1991 G-CSF GM-CSF Hyaluronic acid CMV immune globulin Adjunct to chemotherapy Amgen 1991 Bone marrow transplant Ophthalmic surgery Prevention of rejection in organ transplants Immunex 1991 Genzyme 1991 MedImmune 1990 Gamma interferon Chronic granulomatous disease Genentech 1990 PEG-adenosine deaminase :-PA Erythropoietin Hepatitis B antigens Diagnosis Immune deficiency Myocardial infarction. pulmonary embolism Enzon 1990 Genentech 1990 Anemia associated with renal Amgen 1989 failure, AIDS, cancer Alpha interferon Cancer, genital warts, hepatitis Hepatitis B vaccine Prevention Human growth hormone Deficiency Human insulin Type I diabetes Biogen 1987 Biogen, Genentech 1986 Biogen, Chiron 1986 Genentech 1985 Genentech 1982 SOURCE: "Datawatch: Biotechnology and Innovation Progress Reports," in Health Affairs, Summer, 1994.
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Despite the dramatic increase in attention to and interest in relationships between universities and industry, there is no centralized source of data to track consulting arrangements or the amount of project-specific biomedical R&D that industry funds in universities (Committee on Small Business, March 11, 1993~. Estimates do exist for the subset of university research involving biotechnology techniques, however.
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Indeed, in biotechnology, universities were more efficient in generating patents than private industry biotechnology companies in the 1980s were realizing more than four times as many patent applications per dollar invested from university research than from their own labs (Blumenthal, 19921. Federal Technology Transfer Act The 1986 Federal Technology Transfer Act extended the ideas in Bayh-Dole about university-industry relationships to interactions between federal laboratories and industry.
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For example, Columbia University has seen a doubling of budget size every 10 years, and expenses increasing at 10 percent compounded annually for the past forty-five years (Cole, 1993~. In academic biomedical research, spending by the leading research universities and medical schools has also increased nearly 200 times in response to increases in NIH support for basic and clinical research, from $50 million in 1950 to $9.7 billion in 1993 (nearly 30 times in constant dollars; Ginzberg and Dutka, 1989; U.S.
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In a recent issue of Health Affairs, Atkinson discussed the university-based venture capital funds that were established at Harvard, Johns Hopkins, and Columbia Universities (Atkinson, 1994~. Critics of these arrangements have questioned whether true organizational separation is possible Harvard University, for example, had rejected a 1980 proposal to invest in a start-up biotechnology firm intended to develop research by a Harvard faculty member because it was considered incompatible with the university's central mission of learning.
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Technological innovations both to improve and preserve health and to assure economic prosperity are strong and continuing rationales for investments in R&D. In recent years, the rapid proliferation of collaborations in biological research involving partnerships between universities, industry, and government have greatly extended the frequency, scope, and visibility of such activities.
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In: Medical Device Research Report 1~21:2. Arlington, Va.: AAAMI.
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Alexandria, Va.: Health Care Technology Institute. Hunnewell, S
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In: Institute of Medicine. Medical Innovation at the Crossroads, vol.
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