Saturday, December 19, 2009

NIH grants are not gifts and science is not welfare

Picking up from a DrugMonkey post (and from links and discussion therein --- though the context should be independently clear here…..)

Much like in the allusions made in DM’s post and consequent discussions, there is a common misconception that NIH grants are somehow ‘gifts’ or ‘free money’ or handouts that ‘subsidize the scientist’s lifestyle’. These phrases are lifted from those discussions but I have heard the same phrases (or their equivalents) used many times in general discussions on science and funding. I have also seen, frequently, the contrast made between ‘grants’ and ‘contracts’ in that the former is a good-faith effort with no fixed deliverables whereas the latter is a legal agreement with penalties for default. Finally, I have seen people who defend the NIH-granting system try to justify it as essentially being a system of contracts or being for-fee services when one really thinks about it.

Not to be framing anything here, but I believe the best analogy for NIH grants is investment capital, and it would serve us all well to look at it and think about it in that fashion. Think about the NIH as a venture capital firm that has a really large portfolio. It makes calculated bets on a really large number of projects with a view to a two-fold return on investment: i) Increasing the body of scientific knowledge, and thereby ii) Generating advances in healthcare and medicine.

Like the portfolio of any other good investment firm the NIH portfolio is diverse. It has projects that have a high probability of success, and projects that incur high risk but promise high reward. Like any other portfolio, some investments work out beautifully in a short amount of time, others have promise but need a longer-term perspective, and yet others crap out. Like with other investment firms, it takes a serious amount of effort, justification, planning and demonstration of competence (or the strong prospect thereof) to obtain funding for one’s project. Also like with other investment firms, if you get funded once and do not deliver on your goals, your chances of getting money a second time become slimmer. Conversely, if you get funded once and hit the project out of the ballpark, your chances of getting funded in the future get better.

There are, of course, key differences:

The NIH is unlikely to dissolve your project and lab at short notice to get a convenient tax write-off in a tough year.

Even if you do succeed wildly with a succession of NIH grants (or even one really good one), it is unlikely you will become a multi-millionaire and retire by the age of 50 or something like that. One great success in this system does not ensure that generations of your progeny will live in decadent comfort --- even if your success directly leads to technology and IP that creates a multi-billion dollar industry.

The NIH investment portfolio is geared to generate returns in the form of enhanced public health, not money. But while it is not explicitly geared to generating returns in the form of money, it does contribute enormously in an economic sense. Whether in the pharmaceutical and drug industries, or in the medical device and technology industries, or in the food, nutrition and exercise industries, or in a myriad such areas really, the contribution of NIH-funded research is virtually indispensable. Don’t believe me? Do this thought experiment, and feel free to consult a variety of industry leaders when doing so---shut down all NIH generated information for a year and see what effect it has on the economy.

And finally, the NIH portfolio is so large and so interconnected, the projects so collaborative just by the nature of information and material exchange, that even apparent ‘failure’ projects often yield returns --- in that information is published, and that one never knows what piece of datum will be of great relevance at any given point in time, there are very few true failures. As a collective portfolio, the return it delivers to the people by way of advances in healthcare is tremendous. I have quoted this before and will again (there are many examples of the public benefit of NIH research but this is my favorite because it is, in the end, so all-encompassing)…Quoted from the then NIH director’s budget request for 2007----“The estimated total cumulative investment at the NIH per American over the past 30 years including the doubling period is about $1,334 or about $44 per American per year over the entire period. In return, Americans have gained over six years of life expectancy and are aging healthier than ever before.”

So $44 per year gets the average American an additional 2.4 months per year in life expectancy. Again, the NIH is not solely responsible for this but it has been and still is the chief driving force behind this kind of advancement in public health. The past 30-year record shows that a dollar invested by the NIH goes a long way towards buying you and me about two days’ worth of life, and a healthier life at that.

Some hand-out to all those researchers, eh? Or maybe just a pretty freaking good return on your investment.

Print this post


mistiparnell said...
This comment has been removed by a blog administrator.
Anonymous said...

I believe the best analogy for NIH grants is investment capital

Exactly what I thought when I read that DrugMonkey post. But you said it much better than I would have.

I was thinking that the government's ultimate ROI is the increase in GDP that comes from new science and technology, though. That way the investment capital analogy fits the NSF, DARPA, and other science funding agencies as well.

DrugMonkey said... did the lab do in the third quarter..let me see here...hmmm, maybe if I fire an expensive tech Wall Street will start to buy again.

Genomic Repairman said...

Excellent post, good talking points, and good figures. Bravo sir!

DSK Samways said...

Very good post. Although it's worth emphasizing that the critical reason why the NIH, and public funding of science more generally, is so important is precisely because the rise of a private equivalent capable of operating a similar scale of venture capitalism is so unlikely.

Public funding of basic technology research is vital because it attenuates the risk and capital requirement that would otherwise repel the private sector from buying into and contributing to further development.

Anonymoustache said...

Well said, DSK Samways; That was part of what I was trying to say in the 'thought experiment' part.
Anyway, seeing how you put it, I'm thinking that maybe we should say that NIH grants are gifts (to the life science and medical industries) and that they do subsidize the lifestyles---of life science venture capital companies!