Industry spending far outpaces the U.S. National Institutes of Health (NIH) when it comes to clinical development, a new report has shown.
In a study published July 14 in JAMA Health Forum, researchers from Bentley University’s Center for Integration of Science and Industry calculated that the NIH spent $8.1 billion on phased clinical trials of drugs approved between 2010 and 2019—about 10% of what the pharma and biotech industry committed over roughly the same period.
“This analysis confirms previous studies showing that the NIH makes substantive investments in the basic and applied science underlying new drugs, but also demonstrates that the NIH makes only limited contributions to development,” senior author Fred Ledley, M.D., said in a press release. “This is consistent with policies that position the public sector as an early investor in pharmaceutical innovations that are subsequently developed and commercialized by the pharmaceutical industry.”
To conduct their analysis, the researchers looked at NIH spending on published research on the results of phased clinical trials for all drugs approved between 2010 and 2019, including antimicrobial medications and excluding diagnostics and vaccines. They compared those findings to industry figures previously reported in a pair of earlier studies. One found that for 106 drugs approved between 1990 and 2010, the average spending was about $2.8 billion per drug, while the other found that for 63 drugs approved between 2009 and 2018, it was $1.5 billion. The amounts in both cases take into account clinical failures and a 10.5% cost of capital, and are adjusted for inflation as of 2018.
Ledley’s team found that the NIH funding contributed to phased clinical trials for about 62% of the 387 drugs approved from 2010 to 2019, contributing an average of $33.8 million per drug. Agency spending by phase was $13.9 million per drug in phase 1, $22.2 million per drug in phase 2, and $12.9 million per drug in phase 3. Spending was higher for first-in-class products than for follow-on products, with a median of $11.8 million for the former versus $1.3 million for the latter.
The findings aren’t surprising. The NIH primarily funds basic science and applied research, the authors noted in the paper—that is, research that’s designed to advance knowledge or meet practical objectives, like identifying candidate compounds that could eventually be turned into therapies. The $8.1 billion spent on phased clinical trials is only about 3.3% of all NIH spending related to basic or applied research related to those products, according to the study.
The findings come with some caveats. For instance, neither the estimates of NIH or industry costs included chemistry, manufacturing and control, which could underestimate industry spending, the scientists noted. Also, preclinical costs were included in industry spending estimates for the study on drugs approved between 1990 and 2010, but not in the study on industry spending on drugs approved between 2009 and 2018 nor in the new study’s analysis of NIH spending for 2010 to 2019.
Still, the results may be useful for informing policies on how government funding can be used to bring new drugs to patients, the researchers wrote. They also set the stage for additional studies to explain how the private and public sector can better work together to affect pharmaceutical development.
“Further research is required to understand how the complementary roles of public and private sector investments are associated with the efficiency, costs and timelines of development as well as with returns on these investments,” the researchers concluded.