This includes much of the data in our talk with more detail and great graphics.
One correction: 2005 Pharma R&D spending was $40 billion compared to $25 billion by the NIH. If you look at figure 4.1 on page 28 you'll see how NIH R&D spending hovered around $10 billion per year from 1976 to 1996 before rising 2.5 fold in the last twelve years (adjusted dollars). Where are the life-saving advances, the blockbuster drugs and procedures that should be the dividends of this research? What accounts for the increase in spending?
If so much research is funded by the NIH why isn't the NIH funded by its own royalty stream? Surely with that level of investment, patentable discoveries are being made!
The answer may lie in the Bayh-Dole Act of 1980, which assigned the rights to discoveries made by NIH funded studies to Universities, non-profits and small businesses, i.e., everyone except big Pharma. As a result, start-ups get funded by pharmaceutical companies and VC's (who get a lot of their funding from big Pharma), develop the new drug with all kinds of favorable treatment and then get acquired when the product is near market. The Pharma company gets paid profit on their investment, keeps risk and costs off of their books and gets full access to the patents without having to pay a dime to the NIH. Sweet deal for Pharma!
PhRMA is one of the largest lobbying organizations in America, with more than 1000 lobbyists (2+ per congressman) and more than $100 million spent each year to influence legislation. If you haven't seen 60 Minutes Report "Under the Influence" I highly recommend it. http://www.cbsnews.com/stories/2007/03/29/60minutes/main2625305.shtml
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