Since the founding of the National Institutes of Health (NIH) and the National Science Foundation (NSF) more than six decades ago, the United States has maintained a preeminent position as a government sponsor of medical research. That primacy is being tested, however, by potent economic challenges. The NIH’s proposed budget for fiscal year 2013 would freeze baseline funding at 2012 levels, continuing a decade-long failure to keep pace with the rising costs of conducting medical research. Across-the-board cuts mandated by the Budget Control Act (BCA) of 2011 will also affect medical research, with the NIH, NSF, and other federal research sponsors sustaining budgetary reductions of about 8% next year.
Cuts to government-funded research will have adverse long-term effects on the health care system and the economy and may irreversibly compromise the work of laboratories long accustomed to receiving stable federal support. Moreover, many medical researchers could transfer their knowledge and resources abroad. In fact, five emerging Asian economic or technological powers — China, India, South Korea, Taiwan, and Singapore — already have medical research policies in place that are filling the void being created by ever more restrictive U.S. funding.
Several U.S.-based economists have justified increasing research budgets on the premise that medical discoveries have intrinsically high economic value. For example, Murphy and Topel have suggested that eliminating deaths related to heart disease had an estimated worth of $48 trillion, and a 1% reduction in cancer-related mortality could save $500 billion.1 Beyond these ambitious goals, however, are more practical arguments favoring support for medical research.
Local and regional economic benefits are one example. A June 2008 analysis by Families USA showed that during the NIH’s fiscal year 2007, nearly $23 billion in grants and contracts supported more than 350,000 jobs, with each dollar generating more than twice as much in direct state economic output in the form of goods and services. The NIH reported that almost 1 million Americans worked in for-profit medical businesses in 2008, earning $84 billion and generating $90 billion in goods and services, reinforcing the importance of preserving the U.S. position as a “knowledge hub” for medical research.2 Nevertheless, BCA cuts next year could result in at least 2500 fewer NIH grants, 33,000 fewer jobs, and a $4.5 billion loss in economic activity.3 Since the NIH’s budget represents less than 1% of overall federal spending, policymakers must reconsider whether shaving 8% from NIH outlays will have a noticeable positive effect on the national deficit or economy.
Fallout from funding cuts could include shifts in the U.S. medical research workforce. In 2000, the National Research Council noted both an overall shortage of medical researchers and inadequate funding for scientists working in the United States, which coincided with a decline in the number of funded NIH grant applications from 31% in fiscal year 2002 to 19% in 2010. This change is particularly critical for postdoctoral researchers, who represent the majority of the U.S. biomedical science workforce. According to the NSF, nearly half the 14,601 new postdoctoral-level researchers who were trained in the United States in 2009 were not U.S. citizens or permanent residents. If U.S. institutions are willing to devote money, training, and infrastructure to support talented, committed researchers, it would be an illogical waste of resources and poor long-term strategy to reduce federal grant mechanisms and wipe out potential job opportunities. Indeed, declining financial support may well encourage medical researchers to seek employment elsewhere.
As compared with the United States, China, India, South Korea, Taiwan, and Singapore have taken a sharply different view of medical research and have developed policies that foster medical research as an engine for economic growth and intellectual innovation (see table
Major Government Agencies in Asia and Their Budgets for Medical Research.). Their national budgets are heavily based on scientific research and development, and funding is increasing, with budgetary targets ranging from 2 to 5% of their gross domestic products (GDPs). India’s funding goal for medical research alone is 2% of its GDP.
Increased funding for research infrastructure attracts scientists and organizations interested in high-quality research, including clinical trials. During the past two decades, increasing numbers of clinical trials have moved overseas, where benefits can include decreased costs of doing business, fewer administrative regulations, and greater enrichment of international relationships among researchers. The average annual rate of growth in clinical trials has been highest in China — 47% — while the number conducted in the United States has decreased by an average of 6.5% annually.4 In addition, the increased attention paid to Asia by private firms and other nongovernmental organizations has spurred rapid policy-level responses to concerns about the lack of informed consent, transparency, and other ethical issues, thus further strengthening the appeal of conducting research in the region.
Asian policies reflect a recognition of the extrinsic economic benefits of medical research. China and India have advocated for more government-funded medical research to improve health-related outcomes. China has espoused increased spending as part of achieving xiaokang, a Confucian term meaning a moderately prosperous society. In 2007, India inaugurated its Department of Health Research, which coordinates biomedical science and health-services research programs and translates their findings to address public health concerns. Since the signing of the Korean War Armistice Agreement in 1953, South Korea has leaned heavily on government-funded research to reduce poverty, allowing the country to gradually acquire advanced technologies and expertise. Medical research is part of at least two core technology areas in South Korea’s “577 Initiative”: medical technologies, such as neuroimaging, to address the needs of an aging population and research on issues pertaining to national safety and public health, such as infectious-disease preparedness and food safety.
National research and development programs have been a fundamental component of Taiwan’s economic policy for at least five decades. In 2005, the country began developing “intelligent medical care” — similar to earlier U.S. initiatives — which integrates medical information technology with quality-improvement measures. In Singapore, medical research and economic oversight are administratively linked. For example, the Biomedical Sciences Group of the Economic Development Board supports researchers financially and designs strategies that enhance Singapore’s status as a knowledge center, and the private firm Bio*One Capital invests directly in promising medical technologies.
The diverse strategies outlined above allow Asian countries to systematically recruit medical researchers from both home and abroad. China is particularly proactive in enticing Chinese-born, U.S.-educated researchers to return to their native country by offering generous financial and material incentives under its Knowledge Innovation Program. As the vice president of the Chinese Academy of Sciences stated more than a decade ago, modern “research and development is actually a war for more talented people.”5 In 2000, Singapore jump-started its Biomedical Sciences Initiative to attract medical researchers worldwide with a direct $2 billion investment, as well as with tax incentives for internal biotechnology start-ups and global pharmaceutical firms. In Singapore and India, English is the primary language for scientific communications, which alleviates concerns about language barriers.
For two decades, emerging Asian countries have been designing long-term strategies to reap the benefits of medical research. Meanwhile, the United States is relying on short-term solutions to support its medical research infrastructure, such as those offered by the Patient Protection and Affordable Care Act and the American Recovery and Reinvestment Act. Decreased investment in U.S. medical research could lead to long-term economic damage for the United States and the loss of its stature as a global leader in the field. Powerful incentives that can retain an elite biomedical-research workforce are necessary to strengthen the U.S. health care system and economy.
The views expressed in this article are those of the authors and do not necessarily reflect those of the Robert Wood Johnson Foundation, the Department of Veterans Affairs, or the Agency for Science, Technology, and Research.
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