U.S. government funding laid the foundation for the development of 48 percent of all drugs approved by the Food and Drug Administration and 65 percent of drugs that received priority review between 1988 and 2005.

Federal funding for biomedical research, much of it channeled through the National Institutes of Health (NIH), plays a vital role in supporting America’s life sciences innovation ecosystem. NIH devotes the vast majority of its budget to funding grants for basic biomedical research into the causes and treatment of human disease. The results of this research feed directly into the development of new drugs and devices to cure medical conditions. Unfortunately, as ITIF describes in Leadership in Decline: Assessing U.S. International Competitiveness in Biomedical Research, the NIH’s FY 2013 budget of $29.1 billion was in fact 22 percent less, in real terms, than it was a decade ago. Worse, FY 2013 NIH funding was actually $1.7 billion less than FY 2012 funding due to sequestration, meaning that NIH awarded 722 fewer new research project grants in FY 2013 than FY 2012. Meanwhile, competitor countries have substantially increased their investments in biomedical research, with a new report finding that from 2007 to 2012, average annual investment in biomedical R&D increased by 33 percent in China, 12 percent in South Korea, and 10 percent in Singapore. Congress should permanently reverse the NIH sequestration cuts and strive to maintain the stability of NIH funding levels with minimal fluctuations from year to year; aiming to fund NIH at a level commensurate with at least one quarter of one percent (0.25%) of national GDP.