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January 21, 2015

Analysis: U.S. slipping as global leader in medical research

Once the undisputed center of global innovation in medicine, the United States is steadily losing ground to Asia and Europe and will, if trends continue, relinquish its leadership in the coming decade. That is the conclusion of an analysis in the Journal of the American Medical Association.

“U.S. medical research remains the primary global source of new discoveries, drugs, medical devices, and clinical procedures,” says study coauthor Ray Dorsey, the David M. Levy Professor in Neurology. “However, a decade of unprecedented growth in research activity has been followed by a decade of steady decline, which now leaves open the possibility that other nations could assume global leadership given their increasing investment in biomedical research.”

The study tracked medical research activity from 1994 to 2014 in the U.S., Europe, Asia, Canada, and Australia, compiling data on funding by public and private sources, the creation of intellectual property, and the size of the medical and scientific workforce.

U.S. spending on medical research grew at an average annual rate of 6 percent between 1994 and 2004. The pace fell sharply in the following decade, when the annual rate of growth decreased to 0.6 percent, falling behind the pace of inflation. With the exception of the temporary increases brought about by federal stimulus spending in 2009 and 2010, the last five years have seen a decrease in research funding when adjusted for inflation. Overall, medical research and development funding has declined in real terms by 13 percent since 2004.

Research funding, particularly by the private sector, has also shifted to later stages development and away from basic science. Guided primarily by the desire to realize short-term economic benefits, the share of spending by pharmaceutical, biotechnology, and medical device companies on phase 3 clinical trials—large studies in people that often represent the final step before regulatory approval—grew by 36 percent between 2004 and 2012. Industry spending is also now the largest component of U.S. medical research and development, increasing from 46 percent in 2004 to 58 percent in 2012.

The move away from investing in early stage research has significant long-term implications, according to the authors. They point out that new knowledge often takes from 15 to 25 years to move from the discovery made in the lab to its clinical application in people. With the private sector moving more resources to late-stage research, it leaves the shrinking resources provided by the federal government and often very small companies as the primary sources of funding for early-stage, high-risk research.

Medical research has become an increasingly global endeavor, and investments by other countries, particularly in Asia, are eroding U.S. leadership. In 2004, U.S. medical research and development spending represented 57 percent of the global total. By 2014, the U.S. share had fallen to 44 percent with Asia—led by China, Japan, South Korea, India, and Singapore—rapidly making up ground and increasing investment by 9.4 percent per year. If current trends continue, the U.S. will be overtaken by China as the global leader in medical research and development in the next 10 years. China has already surpassed the U.S. in terms of the size of its science and technology workforce and global share of patents for medical technologies and is closing the gap in published biomedical research articles.

The authors point to the low levels of research funding in the field of health services as an area in particular need of remedy. Health services—which study topics such as access to care, cost, quality of care, and efforts to promote well-being—represent only 0.3 percent of U.S. research expenditures.

“The low levels of investment in health services research represent a missed opportunity to improve many aspects of health, especially the burden of chronic illness, aging populations, and the need for more effective ways to deliver care,” says Dorsey.

The trends are reversible, the authors note. However, given the political environment in Washington and the pressures by shareholders on industry for short-term returns, new sources of revenue will need to be identified. They recommend several possible options, including providing tax incentives that will allow medical and pharmaceutical companies to reinvest profits held overseas in research in the U.S., a commitment by insurance companies and the health care sector to invest more money in health services research, and government-backed research bonds and trusts similar to those employed in the United Kingdom, Australia, and Canada.

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