U.S. investment in medical research slowed in recent years and the share coming from medical device and drug manufacturers increased markedly, a new analysis shows.
Investment slowed to a compounded annual growth rate of 0.8% a year between 2004 and 2012 after a decade of 6% annual growth, researchers reported in the latest issue of the Journal of the American Medical Association. Research financed by biomedical, medical device and pharmaceutical companies slowed between 2004 and 2012, but financing from the National Institutes of Health declined during the same period. The compounded annual growth rate for NIH financing during the eight-year period was -1.8% compared with 7.3% from 1994 to 2004.
As a result, industry financing accounted for 58% of U.S. medical research funding in 2012, compared with 46% in 1994.
In a regional global ranking of the pace of investment between 2004 and 2011, the U.S. placed last with growth of 1.5% per year compared with 4.1% in Europe; 4.5% in Canada and 9.4% in Asia. In China, the compounded annual growth rate was 16.9%. China accounted for 30% of global life science patents in 2011, followed by the U.S. with 24%.
Institute of Medicine President Dr. Victor Dzau and former IOM President Dr. Harvey Fineberg argue the findings underscore the need for greater investment in science and the demand for new sources of financing. “These data reveal how rapidly the United States is at risk of losing its global scientific leadership and competitiveness,” they wrote in a JAMA editorial. The U.S. contribution to the global total for medical research dropped 13%, the study found.
The industry shifted the focus of its funding toward more late-stage clinical trials and invested less in early-stage research between 2004 and 2011. “This shift toward clinical research and development reflects the increasing costs, complexity, and length of clinical trials but may also reflect a de-emphasis of early discovery efforts by the U.S. pharmaceutical industry,” wrote the half-dozen authors of the study, a group of healthcare consultants and academics.
Notably, the study separated financing for health services research, or research on the delivery of healthcare. Financing in that area increased at a compounded annual rate of 4.6% between 2004 and 2011, reaching $5 billion. But the amount is a miniscule 0.3% of total health spending, the authors note.
Pharmaceutical and medical device research accounts for 4% of U.S. health expenditures, they added. “That is, the United States spends $116 billion on research aimed at 13% of total health care costs but only $5.0 billion aimed at the remaining 87% of costs,” they wrote. The reason may be poor return on investment for innovators who stand to see greater profit from medication or technology; the disruptive nature of delivery innovation; and the data and communication challenges associated with health services research.
Investment by providers and insurers in health services research lags the median research investments across other industries by $8 billion to $15 billion, the study said.
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