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Opportunity in the Age of Biology: Biomedical Research in Pennsylvania - Report of the Working Group on Biomedical Research
Authorization: 1997 House Resolution 419, 4152

What is biomedical research?

Biomedical research is research undertaken to gain the knowledge and understanding of the biological processes and the causes of disease, with the goals of disease prevention, reduced suffering and the prolonged and improved quality of life. The research and development (R&D) process involves a complex mosaic of process stages, scientific procedures, performing institutions, testing institutions, and funding sources. The process requires a substantial number of years for movement from ideas to products.

The times for biomedical research are unique

In a relatively few years, advances in biomedical research have changed our understanding of the life sciences, opening the door to new ways to prevent, treat and cure disease. New drugs and therapies have been extremely successful in treating AIDS, heart attacks and strokes, cancer and many other diseases. But the best may be yet to come. The deciphering of the human genome has been called "an achievement that represents a pinnacle of human knowledge." Advances in this exciting field are likely to produce a profound acceleration in biomedical research in the coming years, leading to untold benefits in the human condition. This era will be the Age of Biology. Biotechnology and informatics will likely be the two growth industries in this new age.

Future opportunities in Pennsylvania in this field are enormous

Opportunities for Pennsylvania in this new age are vast. The Commonwealth's medical centers, hospitals, colleges and universities, research institutions, and biotechnology and pharmaceutical companies that perform biomedical research are among the best in the world. Pennsylvania has some of the finest people working in biomedicine. The Commonwealth is poised to be a leader in biomedical science in the coming years.

But the challenges are also substantial

Pennsylvania cannot rest on its laurels. The future cannot be based on "business as usual." Strong competition from other states has already begun and will intensify. Pennsylvania must evaluate its strengths and weaknesses in biomedical research and build on the strengths and repair the weaknesses.

What this report is all about

House Resolution No. 419 of 1998, created a working group to investigate the level of academic biomedical research in Pennsylvania and recommend actions to insure its growth. This report is the working group's response to the resolution. The report describes the status of biomedical research--academic biomedical research and related biomedical research institutions--in the Commonwealth and analyzes its strengths and weaknesses. The description and analysis are the prelude to an enumeration of the strategic policies and priorities that are required for biomedical science in Pennsylvania to grow and prosper in this exciting environment.

Biomedical research expenditures in Pennsylvania are very large

The total level of biomedical research in the Commonwealth is difficult to measure with precision. Dollars spent by academic and other research institutions for the first stage of the research process--innovation research--are not available. The remaining research stages--basic research, applied research and development--are best measured using expenditure data compiled by the National Science Foundation (NSF), and research awards made by the National Institutes of Health (NIH). In 1998, expenditures for research and development by Pennsylvania academic institutions are estimated to have totaled $1.3 billion. Expenditures on basic research alone were $893.3 million. NIH awards, the largest source of funds for basic biomedical research, totaled $735.2 million. Awards were made by a large number of NIH institutes to a wide variety of Commonwealth academic and other research institutions. The largest academic recipients were the University of Pennsylvania, the University of Pittsburgh, the Pennsylvania State University and Thomas Jefferson University. Over the years 1989 to 1998, Commonwealth institutions received $5.5 billion in awards from the NIH. During this interval, NIH awards in Pennsylvania grew by over 10 percent, the second highest growth rate among comparable states. In 1998, expenditures for applied research by Commonwealth academic institutions totaled $332 million and expenditures for development $108 million. Pennsylvania and its local governments, industry, the institutions themselves and private foundations supplemented federal funding for research and development expenditures at all stages. For every dollar of external funding received for research, the institutions must add about 18 cents of their own money. Significantly, during 1998, funding by Pennsylvania and its local governments accounted for only 5 percent of the federal funding for the academic R&D expenditures performed in the Commonwealth, the second lowest ratio among comparable states.

And biomedical research is very important in Pennsylvania's economy

Direct spending by academic institutions on biomedical research has a multiplier effect of 2.3 on induced spending by other sectors of Pennsylvania's economy. Therefore, the economic impact of the $1.3 billion in total R&D expenditures by Pennsylvania's academic institutions in 1998 was about $3.1 billion. Private sector companies are also an important part of the picture. In 1998, nearly 900 private biomedical establishments in the Commonwealth employed over 41,000 persons with an annual payroll of $1.8 billion. The total value of their biomedical shipments was $15 billion. Biomedical research stands behind a very large health care industry in Pennsylvania. In 1998, over 31,000 health care establishments employed over 740,000 persons with an annual payroll of $21 billion. In 1998, the health services industry accounted for about 7.4 percent of Pennsylvania's gross state product. Government research investments have been estimated to provide a total rate of return on investment of 28 percent.

Biomedical research in Pennsylvania has great strengths

By almost all measures, biomedical research in Pennsylvania is strong and vibrant. The Commonwealth's institutions are among the best in the world. These institutions are able to attract substantial funding for basic research projects from the NIH and other federal agencies, as well as some of the best researchers at all stages of biomedical research.

But it also has major systemic weaknesses

Major systemic weaknesses exist in the biomedical research process in the Commonwealth as well. The erosion of infrastructure in the academic medical centers and other biomedical research institutions--declines in institutional revenues available for research, in physician-scientists, and in the condition of research buildings, laboratories, equipment, etc--is the most critical area of need for biomedical research in Pennsylvania. Insufficient funding for the transfer of basic research ideas from research institutions to private sector companies for product development is the second most important need in the Commonwealth. The lack of regional institutions, designed to promote and coordinate biomedical research efforts and develop research specialties that are strong enough to compete with major programs in other states, is a third major weakness. Another weakness involves the lack of a solution to the problem of the high debt load of students graduating from the Commonwealth's medical schools.

To correct these weaknesses, the working group recommends that these strategic policy actions be considered

 

    • To build and maintain the biomedical infrastructure in Pennsylvania's academic and other biomedical research institutions, a Commonwealth Biomedical Research Infrastructure Fund should be established and distributed to the institutions on the basis of their actual NIH funding. These monies should not go to individual researchers; most meritorious projects are already sufficiently funded.
    • To aid in the transfer of basic research ideas from research institutions to private biotechnology companies in Pennsylvania for product development, a Commonwealth Biomedical Research Venture Capital Fund should be established. A program of Commonwealth and local tax incentives might supplement this fund.
    • To promote and coordinate regional efforts in biomedical research between academic and other institutions, and to build specialized application areas, a virtual institute or system of regional Biomedical Research Institutes should be established.
    • To address the problem of the very high debt load of students graduating from Pennsylvania's medical schools, a Commonwealth Medical Student Debt-Relief Program should be established.

Why these policy actions are needed now

Other states have already undertaken initiatives to strengthen biomedical research. Creative programs in these states have produced large, important research centers that provide the critical mass of infrastructure and product development needed for the growth of their biomedical research industries. Pennsylvania needs to act now to meet this competition, or it risks missing out on its unique opportunities. The goal for Pennsylvania should be no less than remaining in the top-tier of biomedical research and expanding the essential role of biomedical research in the economic vitality of the Commonwealth.

JOINT STATE GOVERNMENT COMMISSION - GENERAL ASSEMBLY OF THE COMMONWEALTH OF PENNSYLVANIA
108 FINANCE BUILDING - HARRISBURG, PA 17120