Report: Heightened costs stagnate U.S. medical research

Healthcare spending in the U.S. reached $2.6 trillion in 2010, however, only 5.5 percent, or $140.5 billion, of that was spent on evaluating new treatment options and research, according to a Sept. 8 report put forth by Research! America.

Despite these lofty expenditures that have increased over the past few years, Research! America, a nonprofit public education and advocacy alliance, reported that healthcare research spending has remained flat and has lingered around 5.5 percent since 2005.

In fact, health research experienced only a 1 percent growth, from $139 billion in 2009 to $140.5 billion in 2010. This diminutive increase was hardly enough to keep up with the increasing costs tied to health research, which was estimated to have increased 2.8 percent, according to the report.

"These findings are alarming," John E. Porter, Research! America’s chair, said in a statement. "When health research funding stays flat, medical progress stalls, our innovation economy is affected and American jobs are lost."

Investing in health research, in addition to attempting to find new cures for disease, also creates jobs and adds to positive economic activity. In fact, a report released earlier this year by United for Medical Research (UMR) said that research conducted in 2010 by the National Institutes of Health supported an estimated 500,000 jobs and produced $68 billion in economic activity.

"A nation receives great economic and health benefits from its investment in medical and health research," said Mary Woolley, president and CEO of Research! America. "Other nations have learned this lesson from the U.S. and are now outstripping us in the pace they are ramping up their investment."

According to the report, “U.S. Investment in Health Research,” industry was the largest source of health research funding in 2010 at $76.5 billion. This represented a 2.9 percent increase over 2009. Additionally, federal funding decreased from $46.8 billion in 2009 to $45.9 billion in 2010. Lastly, research spending at academic facilities increased 5.6 percent while philanthropic investments in research decreased 19 percent.

While the pharmaceutical industry increased research and development spending by $4.7 billion in 2010, the biotechnology industry decreased investments nearly $2.7 billion. Meanwhile, the device industry remained flat.

“Overall, U.S. investment in health research is essentially stagnant when compared to measures of inflation. In contrast, countries around the world are continuing to rapidly scale up investments in R&D [research & development],” according to the report. “Renewed, robust U.S. investment in research is needed to foster the new treatments and cures that save lives and improve health while driving economic growth.”