Privately funded pharmaceutical innovation deserves support, not punishment

The world can sometimes have a short memory, but we must not forget what delivered the most important answers to the COVID-19 pandemic — biomedical innovation. As Congress considers President Biden’s fiscal year 2023 budget for the National Institutes of Health (NIH), it must also consider how to ensure America’s biomedical innovation ecosystem can meet the ever-growing public health challenges of the future. 

Without question, NIH plays a central role in our innovation ecosystem, which is a vast and complex array of partnerships between government, the biopharmaceutical industry (including early-stage biotech and large pharma) and academia. Biden’s budget would increase NIH appropriations by 10 percent in 2023 to $49 billion. Congress needs to approve every penny. 

However, there is a growing misconception that NIH funding, not private market investment, is largely responsible for the creation and approval of new medicines. This misconception is generating harmful policy proposals that would undermine innovation. 

According to the latest figures, the biopharmaceutical industry invested $102 billion in research and development (R&D) in 2018, 100 percent of which was focused on drug development. Meanwhile, the entire NIH budget in 2018 was $35.4 billion, of which only $2.8 billion was focused directly on research related to drug development. Further, a May 2021 study found that there were 18 approved medicines linked to the 23,230 NIH grants from the year 2000. Of these 18 medicines, none of them reached approval without significant private investment. In fact, total private investment for the 18 medicines exceeded NIH funding by 650 percent: $44.2 billion in private investment compared to $670 million in NIH funding. 

The misunderstanding of the different roles government and industry play in drug development has emboldened some legislators to promote policies that would prioritize publicly funded drug development over private R&D or allow the government to “march in” and take a patent license if public funds supported the patent owner’s research. These short-sighted policies — meant to increase patient access — would imbalance the U.S. biopharmaceutical research ecosystem and dramatically hinder its ability to innovate for patients.  

The role of NIH is to serve as the primary funder of basic research in the biomedical sciences, not drug development. Industry makes the capital investment in research and drug development to advance basic science into approved treatments. These investments are necessarily deep and inherently risky, with recent estimated costs ranging from $314 million to $2.8 billion to successfully get a product to market. The general failure rate in drug development is 90 percent – and it is likely to climb higher as R&D focuses on increasingly complex modalities that include cell and gene therapies.  

In Alzheimer’s disease, the failure rate is 99 percent. At Eli Lilly and Company, where I lead global government affairs, we have experienced multiple drug failures in Alzheimer’s disease and invested more than $3 billion over the course of 30 years in the search for a treatment. Despite these failures, Lilly has remained committed to neurodegeneration innovation and collaborations aimed at the entire spectrum of Alzheimer’s disease. Today, we have a robust Alzheimer’s disease pipeline and a promising potential therapy for Alzheimer’s patients. 

With the aging of our population, finding effective treatments for Alzheimer’s is urgent. Its prevalence is expected to grow to nearly 13 million people by 2050 and cost more than $1.1 trillion annually. Lilly’s ability to make multibillion-dollar investments and relentlessly pursue Alzheimer’s research over decades is in large part because of policies that promote a vibrant innovation ecosystem.  

As we continue to apply lessons to the new reality of our COVID world, I applaud the administration for making basic biomedical research funding a priority. Future pandemics, Alzheimer’s, and countless rare and genetic diseases are health threats that only biomedical innovation can answer. The need to protect and advance the U.S. innovation ecosystem — that the world relies on — has never been greater. 

Policies simply intended to be punitive to the biopharmaceutical industry by undermining intellectual property will weaken the drug development ecosystem and will not have the effect of increasing patient access but instead will harm individuals and families hoping for treatments and cures. 

Shawn O’Neail is a government relations professional with more than 20 years of experience. He is currently vice president of global government affairs at Eli Lilly and Company, where he develops and executes federal, state and international government affairs strategies.