MIT study: NIH funding helps generate private-sector patents

March 30, 2017

Research grants issued by the National Institutes of Health (NIH) contribute to a significant number of private-sector patents in biomedicine, according to a new study co-authored by an MIT professor.

The study, published in the journal Science, examines 27 years of data and finds that 31 percent of NIH grants, which are publicly funded, produce articles that are later cited by patents in the biomedical sector.

"The impact on the private sector is a lot more important in magnitude than what we might have thought before," says Pierre Azoulay, a professor at the MIT Sloan School of Management, who is one of the authors of the paper.

After reviewing over 365,000 grants -- making this a uniquely large study -- the research also finds that over 8 percent of NIH grants generate a patent directly.

Intriguingly, the researchers also find no significant difference between "basic" or "applied" research grants in terms of the frequency with which those projects helped generate patents; both kinds of research spill over into productive private-sector uses.

"If you thought the NIH exists in an ivory tower, you're wrong," Azoulay says. "They are the nexus of knowledge that really unifies two worlds."

The paper, "The Applied Value of Public Investments in Biomedical Research," is co-authored by Azoulay, who is the International Programs Professor of Management at MIT Sloan; Danielle Li PhD '12, an assistant professor at Harvard Business School; and Bhaven Sampat, an associate professor at Columbia University's Mailman School of Public Health.

Decades of grants

The NIH, which has its main campus in Bethesda, Maryland, encompasses multiple research institutes and is the world's biggest source of public funding for biomedical research, dispersing about $32 billion annually in grants.

To conduct the study, the scholars examined 365,380 NIH grants funded between 1980 and 2007 -- nearly every NIH grant awarded for decades. Exactly 30,829 were the direct basis for patents; 17,093 of those were so-called "Bayh-Dole" patents issued to universities and hospitals, something federal legislation made possible starting in 1980.

Of the NIH grants, 112,408 were additionally cited in a total of 81,462 private-sector patents.

And as the authors put it in the new paper, even these NIH-backed research projects that are indirectly cited in later patents "demonstrate the additional reach that publicly funded science can have by building a foundation for private-sector R&D."

Azoulay, an economist who studies the production and dissemination of scientific knowledge, says the bottom-line figures in the study -- the 31 percent and 8 percent of NIH grants that contribute to and more directly generate patents -- strike him as being significantly large because of the broad scope of research the NIH supports.

"There is a lot of research we wouldn't necessarily expect to be relied upon in a patent," Azoulay explains.

He also noted that such research can be characterized as either "basic" or "applied"; the researchers found little difference in the long-term patent-creating productivity of those categories.

For instance, some research projects can be considered more directly "disease-oriented" than others, but even by this yardstick, the frequency of patent generation does not vary greatly. About 35 percent of "disease-oriented" NIH grants led to patents, compared to 30 percent otherwise.

Overall, Azoulay says, the flow of knowledge from NIH research projects to the commercial market seems clear.

"Grants produce papers, and papers are cited by patents used by pharmaceutical firms," says Azoulay. "It's hard to think of an innovation [in biomedicine] that doesn't have a patent."
Continuing research

The current project is one of multiple related studies that Azoulay and his colleagues -- including Li, who will join the MIT faculty in July 2017 -- have conducted on the impact of publicly funded science.

A 2015 working paper released by Azoulay, Li, Sampat, and Joshua Graff Zivin, a professor at the University of California at San Diego, estimated that every $1 of public NIH funding yielded between $1.5 and $2 in private-sector pharmaceutical drug sales. That study is still undergoing peer review.

The current research was conducted partly with the support of the National Science Foundation's Science of Science and Innovation Policy program (SciSIP).

Additional background

ARCHIVE: 3 questions: Pierre Azoulay on the value of funding the NIH

ARCHIVE: Should scientists handle retractions differently?

ARCHIVE: How the 'Matthew Effect' helps some scientific papers gain popularity

ARCHIVE: Scientists: This man has your number

ARCHIVE: Tracking the flow of knowledge

Massachusetts Institute of Technology

Related Biomedical Research Articles from Brightsurf:

General data protection regulation hinders global biomedical research
The European Union (EU) General Data Protection Regulation (GDPR) was designed to give EU citizens greater protection and control of their personal data, particularly when transferred to entities outside the EU.

Novel educational program puts a human face on biomedical research
The goal of translational research is to speed research breakthroughs into clinical practice.

Biomedical research may miss key information by ignoring genetic ancestry
A new study of Black residents of four distinct US cities reveals variations in genetic ancestry and social status that underscore the inadequacy of using skin color as a proxy for race in research.

Advances in cryo-EM materials may aid cancer and biomedical research
Cryogenic-Electron Microscopy (cryo-EM) has been a game changer in the field of medical research, but the substrate, used to freeze and view samples under a microscope, has not advanced much in decades.

World-first program uncovers errors in biomedical research results
Just like the wrong ingredients can spoil a cake, so too can the wrong ingredients spoil the results in biomedical research.

Scientists poised to study reproducibility of Brazilian biomedical research
A project to assess the reproducibility of biomedical research in Brazil has been described today in the open-access journal eLife.

Transparency and reproducibility of biomedical research is improving
New research publishing Nov. 20 in the open-access journal PLOS Biology from Joshua Wallach, Kevin Boyack, and John Ioannidis suggests that progress has been made in key areas of research transparency and reproducibility.

As private funding of biomedical research soars, new risks arise
Academic medical centers (AMCs) in the US are navigating an increasing shift in research funding from historic public funding (e.g., NIH) to private sources such as pharma and biotech companies, foundations, and charities, raising a host of new issues related to collaborative research models, intellectual property rights, and scientific and ethical oversight.

BGRF scientists co-publish research paper on blockchain & AI for biomedical applications
Biogerontology Research Foundation Chief Science Officer (CSO) co-authored the landmark paper in the journal Oncotarget on the convergence of blockchain and AI to decentralize and galvanize healthcare and biomedical research.

Promising new drug for Hep B tested at Texas Biomedical Research Institute
Research at the Southwest National Primate Research Center (SNPRC) on the campus of Texas Biomedical Research Institute helped advance a new treatment now in human trials for chronic hepatitis B virus (HBV) infection.

Read More: Biomedical Research News and Biomedical Research Current Events is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to