We are honored that Peter Pitts has based his analysis of the National Institutes of Health on our work describing the NIH investments in basic and applied research that contributed to 99.4% of drug approvals from 2010-2019 (Cleary et al., 2023). We would offer three points of additional context about our work:

1. We do not agree with his characterization of our work as measuring “curiosity-based science.” Our work identifies NIH funding for published research that is directly related to the target of an approved drug (which we term “basic research”) or the directly related to products associated with that target (which we term “applied research”) (Cleary et al., 2023; Cleary et al., 2020; Cleary et al., 2018). As such, what we term “basic research” is better characterized as “use-inspired basic research.” As defined by the NIH, “use-inspired basic research is grounded in the same scientific rigor as pure basic research but begins with the end in mind—how the knowledge might ultimately be applied to improve health or solve complex societal problems” (NIH, 2017).

Use-inspired basic research is recognized to be an effective driver of innovation. An NAS report, for example, describes use-inspired research as “particularly effective in fostering new technologies when it is conducted in environments where scientists are aware of and responsive to real-world challenges” (NAS, 2020). Certainly, the NIH and America’s great research universities and medical institutions represent such environments. In fact, we have shown that an “established” body of basic research on the drug target is essential for successful drug development and that few targeted therapeutics are approved before this research reaches an analytically defined established point. (McNamee et al., 2017; Cleary et al., 2020). In fact, “basic research” demonstrating the relevance of a drug target to a disease or potential therapeutic mechanism of action is typically the trigger for biopharmaceutical companies to invest resources in drug discovery as well as equity investment in early-stage biotechnology companies.

2. Our work identified an average of $1.4 billion in NIH-funded research related to each drug approved from 2010-2019. The results of this funding are typically available to industry through academic publications or presentations, through workforce training, consulting/advising with academic scientists, published patents, or non-exclusive or exclusive licenses. The work by Cleary et al. (2023) estimated the magnitude of these cost savings using the same accounting principles that industry uses in estimating their investment in discovery and development of new drugs. Most estimates of industry investment include not only the actual costs of research on the approved molecular entity, but also the costs associated with failed entities and the cost of capital (opportunity cost), typically estimated at 10.5% per year. Using the same principles to estimate the additional investment that industry would need to make in the absence of this NIH-funded research suggests that NIH funding provides industry with cost-savings of $2.9 billion per approval.

3. Our work also demonstrates that public sector funding for basic science not only provides cost savings to industry, but creates substantial economic efficiencies. Since most NIH-funded basic research is freely available in the public domain, it may be used by multiple companies to attract investment and develop competing products, an average of 2.85 drugs for each target. This reduces the per drug cost of basic research to taxpayers to $472 million per approval, making the total cost to taxpayers (with applied research) $599 million per approval. Promoting market competition may also be expected to provide cost savings through market competition and incentivize the development of improved products with competitive advantages in the market.

By mischaracterizing the nature of the “basic research,” Peter Pitt’s analysis funding fails to recognize the essential role of early-stage, government investment in innovation. Vannevar Bush (1945) recognized that government-funded basic research created “scientific capital” that could be effectively developed and commercialized to provide for the public’s needs. In this golden age of basic and applied biomedical research, we have seen record levels of R&D spending by large pharmaceutical manufacturers, record levels of equity investment in emerging biotechnology companies, and record numbers of drug approvals for unmet medical needs. This is not the time to forget how this was achieved.

References:
Bush, V. (1945). Science, the endless frontier: A report to the President. US Government Printing Office.
Cleary, E.G., Beierlein, J.M., Khanukja, N., McNamee, L.M., Ledley, F.D. (2018) Contribution of NIH funding to new drug approvals 2010-2016. Proceedings of the National Academies of Science. 115(10), pp.2329-2334. www.pnas.org/content/early/2018/02/06/1715368115
Cleary, E.G., Jackson, M.J., Ledley, F.D. (2020) Government as the first investor in biopharmaceutical innovation; evidence from new drug approvals 2010–2019. (Working Paper Series No. 133, revised 2021) Institute for New Economic Thinking. www.ineteconomics.org/uploads/papers/WP_133-Revised-2021.0719-Cleary-Jackson-Ledley.pdf ;
Cleary, E.G., Jackson, M.J., Zhou, E.W., Ledley, F.D. (2023) Comparison of research spending on new drug approvals by the US National Institutes of Health versus industry, 2010-2019. JAMA Health Forum jamanetwork.com/journals/jama-health-forum/fullarticle/2804378
McNamee, L.M., Walsh, M.J., Ledley, F.D. (2017) Timelines of translational science: From technology initiation to FDA approval. PLOS ONE. 12.5 e0177371. journals.plos.org/plosone/article?id=10.1371/journal.pone.0177371
National Academies of Sciences, Engineering, and Medicine. (2020). The Role of Research in the Chemical Sciences: Past, Present, and Future. The National Academies Press.
National Institutes of Health, Office of Behavioral and Social Sciences Research (OBSSR), 2017.