Thursday, November 27, 2008

Investing in Biomedical Research

Given the current economic crisis, advocates of different causes are scrambling to defend the importance of boosting, and even retaining, public funding for their particular cause.

In these difficult times greater attention is given to the purported benefits of investing scarce funding in any particular area of policy. So on the bright side of things, during tight economic times we think more rationally about priorities. Ideally we would think this way in good economic times as well, as that would increase the likelihood of our staying in good economic times! But sometimes it takes a crisis to shake us from our intellectual slumber.

If the current economic crisis had occurred six years ago, for example, odds are the second Iraq war would not have happened (in which case the current economic crisis would probably have been avoided in the first place). And the current economic crisis will also dampen enthusiasm for trying to exert greater control over the global temperature. This was clearly illustrated in the recent Canadian election.

I am working on a longer post on why it is imperative that we do not lose focus on the importance of longevity science. But for now, here are a few comments from an editorial in the latest issue of Nature Biotechnology . It addresses the importance of investing in biomedical research more generally:

Scientists fear that the current economic woes will lead to substantial decreases in research funding. Yet government leaders would do well to consider the enormous economic benefit of biomedical research and to realize that boosting funding for such research could contribute to an economic turnaround.

Although it takes time for investments in research to deliver monetary returns, economists have estimated that public funding of biomedical research spurs economic growth. One study, for instance, reports a 28% rate of return on the original investment in research—far superior to any current savings account or mutual fund.

Government funding of biomedical research leads to the creation of jobs in both the public and private sectors. For example, in the US, a country with a long history of robust public biomedical research funding, there were more than 500,000 people working in the pharmaceutical industry in 2002.

Economic growth is also driven by sales of products and devices that have been developed with public funds for research. For example, economist Andrew A. Toole has estimated that a 10% increase in basic research funding leads to a 6.4% increase in the number of new compounds included in applications to the US Food and Drug Administration. The development of new pharmaceutical products or devices can bolster economic development when they are exported or licensed to other countries and can contribute to a favorable balance of trade.

There are direct and indirect economic benefits of investing in biomedical research. Healthcare improvements result in a more able-bodied workforce, leading to substantial improvements in productivity. Biomedical research also keeps healthcare spending down. Historically, these cost savings for the US health system have translated into a return of investment of three dollars for every dollar allocated to biomedical research.