The U.S. ranks first in how its national policies support worldwide life science innovation, but much of the global community is not doing enough in this area, according to a report published this month by the Information Technology and Innovation Foundation (ITIF), a nonprofit, nonpartisan research and educational think tank.
The report, which includes 56 countries that together comprise nearly 90% of the world’s economy, examined three policy areas: government R&D spending, intellectual property protections for life science innovations and the extent of price controls on drugs.
Joining the U.S. at the top of the overall rankings were Switzerland, Taiwan, Singapore and Sweden, while Australia, the Philippines, Thailand, South Africa and India were found to do the least to support global life science innovation. In the three areas examined, the U.S. ranked seventh in government R&D spending, first in IP protections and tied for first in price controls.
The findings related to global R&D spending are of particular interest to the clinical research community. The 56-country average of government R&D investment toward health R&D was 15.3%, the analysis concluded, but eight nations invested less than 6%.
The authors suggested that all countries should allocate at least 10% of their R&D funding to health R&D. “Many nations, universities and companies remain focused on developing new lifesaving and life-improving treatments and cures,” the report states. “But these efforts are held back by nations that ‘free ride’ on the efforts of leaders and fail to do their fair part. Some countries do not invest adequately in life science research.”
Authors Stephen Ezell, ITIF vice president, Global Innovation Policy, and J. John Wu, ITIF economic research assistant, discussed how government financial support plays a foundational role in the medical discovery ecosystem. “We believe that federal investment in life science research is a complement to private sector investment, which enables industry to build on the knowledge and discoveries of that publically supported research,” Ezell said.
Studies have shown that public investments draw in private funding rather than replace it, with estimates ranging from 10 to 30 cents of additional R&D funds for every dollar of government support. “Federal funding helps ‘crowd in’ investment by the private industry, rather than crowd out.” Wu said, adding that within the U.S., individual state support plays an important role as well.
Mark L. Rohrbaugh, Ph.D., JD, special advisor for Technology Transfer to the deputy director for Intramural Research at the National Institutes of Health, discussed the springboard role of government funding in supporting scientific advancement. “Our role is to support the research that will then allow the private sector to pick up on those findings and develop specific treatments,” he said.
But not all countries have that same level of commitment. “For example, from 2007 to 2012, European governments invested just 60% of the amount that the U.S. government invested in biomedical R&D, while the governments of China, Japan, Korea, India and Australia combined invested just 25% as much, even though the GDP [gross domestic product] of both of those country grouping is larger than America’s,” Ezell said.
There are myriad reasons for the global lack of support for life science research, mainly having to do with competition for limited resources. In many cases, world leaders may view investment in R&D activities as too risky because of the considerable expense and the fact that benefits often are not immediately realized. But even less-developed countries are making significant and notable contributions.
“There are some countries like Kenya and Columbia that are prioritizing the life sciences,” Wu said. “They are still trying to contribute their fair share to the global ecosystem for the development of the life sciences.”
An understanding of the larger picture is a critical aspect of this support, Ezell said. “If nations can commit to investing more in life science R&D, that will reap additional benefits for their own economy as well as having spillovers for the entire global economy,” he explained. “Collective action is needed to solve the types of challenges that humanity confronts, whether it’s climate change or health-related issues like pandemics, aging, rare diseases and orphan diseases.”
But to accomplish this, “we need to move nations away from seeing this as a policy issue that affects only their own citizenry,” Ezell continued. “If we all ratchet up our game, then it doesn’t really matter where that breakthrough cure comes from. All nations collectively benefit from the spillovers that are realized. Innovation altruism really does pay.”
Even in the U.S., the seventh-place ranking in government R&D funds allocated to health research is somewhat of a concern. According to a 2015 JAMA report, The Anatomy of Medical Research: U.S. and International Comparisons, while U.S. government spending on medical research grew at an average annual rate of 6% from 1994 to 2004, in the next decade the annual rate of growth decreased to 0.8%, falling behind the pace of inflation.
“Generally, biomedical research in the U.S. receives bipartisan support,” Rohrbaugh said. “It is recognized that increased funding to research drives economic growth and productivity in industry, and from a public health perspective our population is healthier and lives longer.”
Ezell points to the importance of continuing a robust investment in life science R&D. “Despite the fact that we continue to lead, federal funding for R&D is stagnating,” he said. “That is starting to impact our life science research, and I think that’s a concern in the long run if it’s not addressed.”
Still, the U.S. sets an example for the rest of the world, Rohrbaugh pointed out. “The U.S. has a disproportionally high activity, compared to other countries, in terms of funding biomedical research,” he said. “It’s part of the whole ecosystem of innovation. The payback in terms of improved public health over the years and economic development is multiple times the investment.”
This article was reprinted from Volume 20, Issue 16, of CWWeekly, a leading clinical research industry newsletter providing expanded analysis on breaking news, study leads, trial results and more. Subscribe »