Some numbers

September 4, 2008

From a recent issue of Biotechniques, we read the following (by Douglas McCormick):

“Washington, DC, Aug 30—If elected president of the U.S., Sen. Barack Obama (D-IL) would double government funding for the National Institutes of Health and other research agencies over the next decade. Obama repeated that pledge (first made during his primary campaign) in his answers to ScienceDebate2008’s “top 14 science questions facing America.””

At first glance, this sounds like another politician throwing money at some special interests*.  But a cursory glance at some numbers suggests something else:

  • 1. NIH budget for 2008 – ca. $29 billion (from the NIH web site)
  • 2. Receipts of the top ten pharmaceutical companies based in the US in 2006 – $230 billion (give or take, according to Wikipedia)
  • 3. Total employees of the top ten pharmaceutical companies based in the US in 2006 – 700,000 (again, according to Wikipedia)
  • 4. Receipts of the top ten biotechnology firms based in the US in 2006 – about $40 billion (according to Wikipedia)
  • 5. Total employees of the top ten biotech firms based in the US in 2006 – about 60,000 (again, according to Wikipedia)

Granted that these are rough figures, that this is not a rigorous scientific or statistical analysis, and that there are other factors that alter the simple equation I make in the following.  But I think that these numbers are important to listen to in this upcoming election year.

A liturgy that rolls off the tongues of candidates of both parties is that government spending is wasteful, hence the rush on both sides to pledge this and that sort of spending cut (the exact nature of which depends on your political persuasion). What we also hear about is the treasured programs that the respective sides will continue to pour money into; again, the specifics depend on your redness or blueness. But what the voting public rarely hears is an honest accounting of the returns that each party’s favorite spending actually gives. I would argue that basic biomedical research (and indeed, all basic scientific research) yields excellent returns on federal investment, and offer the above numbers in support of this idea. The two industries I mention here – pharma and biotech – are intimately interwoven with the basic biomedical research enterprise, and a significant amount of the innovation that drives these industries originates (or originated) in the NIH-funded biomedical research laboratory. In this respect, the NIH budget is an investment, and a wildly-successful one. Even if we don’t take the face-value numbers I have pulled from Wiki here (that show an annual return of some 1000%, and more than 750,000 high-paying jobs the tax receipts from which would probably pay much of the NIH tab by themselves), and instead factor in that some of these receipts and jobs are not American, it is still easy to see that basic biomedical research returns considerably more than the investment made by the government. (And this doesn’t begin to weigh the intangibles, the ways that the research enterprise gives back to society as a whole.)

Is there room for growth in the many areas that are impacted by basic life sciences research? I would argue, most definitely. And I would argue that the rate of return of investment by the government, hinted at by the above, should be the same. Think about it – multiply by a factor of four the support for biomedical research, and we may add $1 trillion to our economy. (OK, OK, I know I’m using the most optimistic interpretation of the above, but even missing by a factor of two still translates into a huge shot in the arm.) If our government is going to be spending on something, an enterprise such as this would seem to be an excellent option.

So, as the campaign rhetoric becomes more heated and disconnected from reality, remember these thoughts, and ask yourselves if your candidate has the wherewithal to both admit that some government spending can actually have a positive rate of return, and to commit to some programs that will actually help the government’s and the nation’s balance sheets.

*Important disclaimer – much of my research is, and has been, supported by federal research grants.