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Report: Top Biotech States to Reap Biggest Gains from Proposed NIH Funding Increase

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If Washington steps up funding for research grants awarded by the National Institutes of Health, states with the largest clusters of research institutions would see them expand even further because they would reap the most jobs and economic activity, according to an advocacy group representing healthcare consumers.
 
Families USA concluded in a recent report that the nation would see 9,185 new jobs and $3.1 billion in additional economic activity during the federal fiscal year that begins on Oct. 1, if NIH funding were raised by 6.6 percent — the level being sought by the group.
 
According to In Your Own Backyard: How NIH Funding Helps Your State’s Economy, California would see the largest dollar increase in economic activity from an NIH funding boost, followed by Massachusetts, New York, Pennsylvania, Maryland, Texas, North Carolina, Washington state, Illinois, and Ohio.
 
The top-10 states were projected to generate a combined more than $2.1 billion in new economic activity, accounting for 68.5 percent of the nation’s total projected increase. California’s $520 million projected gain alone reflected 16.6 percent of that total.
 
Rankings were less related to the size of states’ life sciences clusters than to their concentrations of academic and nonprofit research institutions, whose researchers have long relied on NIH grants to fund their work (see chart 1, below).
 
The 10 states finished in nearly identical order when it came to the top 10 gains in employment, except that Maryland finished in fourth position, ahead of Pennsylvania, which dipped down to fifth; and Michigan replaced Ohio in the number-10 spot (see chart 2, below). According to the report, the top-10 states would generate 5,768 combined jobs, almost two thirds (62.8 percent) of the total projected employment increase for the nation, with California’s 1,447 new jobs alone accounting for 15.8 percent of the nation’s total projected increase
 
During FY 2007, the report concluded, NIH funding was responsible for creating 350,894 jobs and $50.5 billion in economic activity nationwide.
 
An NIH spokesman contacted by BRN last week had not responded by deadline to written questions on whether the agency agreed with the report’s findings, and the effect, if any, of economic benefit from the agency’s funding decisions.
 
Dee Mahan, director of global health initiative for Families USA and a co-author of the study, told BioRegion News last week that the report calculated its job and activity numbers using the 6.6 percent gain sought by her group. The percentage, she said, reflected a midpoint between current funding and the 13 percent effective loss of NIH funding simply due to inflation since 2003.
 
“One of the reasons that we chose the 6.6 percent [increase] when it’s not going to really make up for everything that has been lost in terms of purchasing power, is that that is a number that the broader NIH advocacy community is calling for,” Mahan said. “It’s a number that people who are on Capitol Hill and getting the calls would be familiar with. It is much more feasible than trying to push for the entire 13 percent in one fell swoop.”
 
That broader community, she said, includes the Ad Hoc Coalition for Medical Research Funding, an umbrella group representing more than 300 academic medical centers and disease-specific and patient groups; the medical research funding advocacy umbrella group Research!America; and the Federation of American Societies for Experimental Biology, or FASEB, another umbrella group representing 21 member medical societies.
 

“As Congress evaluates NIH funding, it should keep in mind the interrelated set of benefits that flow from that funding. An NIH budget that falls short of what’s needed hurts labs, hospitals, and communities.”

While that percentage gain is unlikely, both houses of Congress sent strong signals last week that they would seek to increase NIH funding above the inflation rate — which stood at 4.2 percent last month.
 
The Senate’s Labor, Health and Human Services, Education and Related Agencies Appropriations Subcommittee last week began “marking up”, or writing, a budget bill for those agencies that would increase NIH spending by 4.4 percent, or $1.3 billion, to about $30.8 billion for FY ’09. That bill is expected to go to the full Senate Appropriations Committee chaired by Sen. Robert Byrd (D-WV) some time soon after the July 4 holiday.
 
“We have written a bipartisan bill that, I believe, reflects the real priorities and values of the American people and I look forward to working with my colleagues to make these goals a reality,” Sen. Tom Harkin (D-Iowa), said in a press release trumpeting the subcommittee vote.
 
Also last week, the chairman of the House of Representatives’ appropriations committee and its subcommittee on Labor, Health and Education submitted a proposed budget for FY ’09 that raised NIH’s budget by 4.1 percent, or $1.2 billion. Rep. David Obey (D-Wis.) said in a statement that the increased appropriation would allow the NIH “to capitalize on unprecedented scientific opportunities that reduce the disease burden on the country.” [See BRN sister publication GenomeWeb Daily News, June 24].
 
The full appropriations committee had been expected last week to begin to marking up a bill covering the Labor and Health and Human Services departments’ funding under the FY 2009 budget. But a debate over funding for the Interior Department prompted the committee to recess until after Independence Day.
 
“As Congress evaluates NIH funding, it should keep in mind the interrelated set of benefits that flow from that funding. An NIH budget that falls short of what’s needed hurts labs, hospitals, and communities,” the In Your Own Backyard report concluded. “The government’s investment in NIH is an investment in the physical and economic
health of our communities and our nation. It is an investment that we should protect.”
 
If the House and Senate press for an above-inflation increase for NIH, the House and Senate are sure to face opposition from President Bush, who has proposed keeping spending for NIH at FY 2008’s level of nearly $29.47 billion [see GenomeWeb Daily News, Feb. 4].
 
The tug-of-war reflects the political divide between a lame-duck Republican president and a Congress where both houses are Democratic-controlled. Despite that divide, the president last year partially rolled back efforts by Congressional Democrats, and allies that included Sen. Arlen Specter (R-Pa.), to raise NIH funding. The president initially proposed a $600 million cut in NIH’s FY 2008 budget, from $28.9 billion in 2006-07, Ultimately, Bush and Congress agreed to an increase of just under 2 percent, to $29.5 billion (Technically NIH’s budget is $329 million higher, but that reflects $196 million earmarked for the Global AIDS Fund).
 
Harkin and other Senate Democrats are trying to add to NIH’s budget for the 2008 fiscal year, which ends Sept. 30. On June 27, the Senate approved by a 92-6 vote a supplemental spending package that included an additional $150 million for the agency, which Harkin and other supporters said would allow it to fund about 246 additional grants.
 
“That’s certainly not going to get you very far when you’re talking about a 13-percent loss in purchasing power. But it’s something,” Mahan told BRN.
 
This year’s presidential election may boost backers of a larger funding hike for NIH. In a questionnaire published online by Research!America, presumptive Democratic nominee, Sen. Barack Obama (D-Ill.), said he favored doubling federal spending for basic research, and criticized the stagnation in NIH funding:
 
“This isn't just counter-productive, it is a failure to keep faith with so many Americans who are in the fight of their lives against cancer and other diseases, and it overlooks our country's tradition of medical innovation,” Obama told the group.
 
Obama’s presumptive Republican opponent, Sen. John McCain (R-Ariz.), has not quantified a level of funding increase for NIH he would pursue if elected.
 
“Certainly things are always more complicated in an election year, and more difficult to predict. But I think that the fact the chairs of the subcommittees, Obey and Harkin, are taking very strong stances in support of NIH, that leadership may sway some of their colleagues in terms of voting,” said Carrie Wollinetz, FASEB’s director of scientific affairs and public relations.
 
“Even if, as many are predicting, [an above-inflation increase for NIH] goes nowhere in this Congress, certainly it’s a very positive template from which to start with in the next Congress,” Wollinetz added.
 

 
Potential Gains in Business Activity from a 6.6 Percent Increase in NIH Awards
State
Total Business Activity ()
Total Gain
in Business Activity ()
FY'07 NIH Award + 6.6% Increase ()
Business Activity Multiplier
FY'07 NIH Award ()
California
8,907
520
3,710
2.40
3,493
Massachusetts
5,317
310
2,484
2.14
2,339
New York
4,302
251
2,129
2.02
2,005
Pennsylvania
3,537
207
1,525
2.32
1,436
Maryland
3,474
203
1,664
2.09
1,566
Texas
2,978
174
1,198
2.49
1,128
No. Carolina
2,570
150
1,155
2.22
1,088
Washington
1,981
116
904
2.19
851
Illinois
1,963
115
809
2.43
627
Ohio
1,727
101
756
2.29
712

— The value of additional state business activity attributed to NIH grants and contracts awarded to academic institutions, organizations, and businesses in the state, measured in terms of the dollar value of goods and services. Due to rounding, some figures may not exactly equal the NIH award multiplied by the multiplier.

— Multiplier based on the US Commerce Department's Regional Input-Output Modeling System (RIMS) II, based on 2005 data. For consistency, the 2007 NIH figures were deflated to 2005 levels using a deflator of 0.919, based on the US Bureau of Economic Analysis price index for biomedical research and development, or BRDPI. Multiplier differences between states reflect local differences in wage/salary and personal income data.

Potential Gains in Jobs from a 6.6 Percent Increase in NIH Awards
State
Total Jobs
Created & Supported
by a 6.6% Increase
Additional Jobs Produced
by a 6.6% Increase
Jobs Created & Supported by
FY '07 Funding
California
56,733
1,447
55,286
Massachusetts
31,672
808
30,864
New York
28,607
730
27,877
Maryland
21,857
558
21,299
Pennsylvania
21,819
557
21,262
No. Carolina
18,904
482
18,422
Washington
13,186
336
12,850
Illinois
12,226
312
11,914
Ohio
12,207
311
11,895
Michigan
8,914
227
8,687

SOURCE: Families USA

 

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