The bucks stop here for aca­demic cen­ters

Study shows re­search fund­ing down, ex­perts fear it could hin­der ad­vance­ments

Modern Healthcare - - The Week In Healthcare - Shawn Rhea

re­cent down­turn in pub­lic and pri­vate fund­ing of med­i­cal-prod­uct re­search and clin­i­cal tri­als is forc­ing aca­demic med­i­cal cen­ters to foot a larger per­cent­age of the cost of re­search en­deav­ors. The trend has med­i­cal-re­search ex­perts con­cerned about the long-term ef­fect on the de­vel­op­ment of novel med­i­cal treat­ments.

“For ev­ery ex­tra­mu­ral dol­lar re­ceived for re­search, an aca­demic med­i­cal cen­ter is adding 20 to 30 cents of its own money to make up the fund­ing needed to do the re­search,” said Ann Bon­ham, chief sci­en­tific of­fi­cer for the As­so­ci­a­tion of Amer­i­can Med­i­cal Colleges. “Our con­cern is: Can our in­sti­tu­tions share those costs over an ex­tended pe­riod of time?” (For a list of the largest aca­demic med­i­cal cen­ters, see p. 34.)

De­spite the grow­ing con­cern, sev­eral in­di­ca­tors sug­gest aca­demic med­i­cal cen­ters are likely to con­tinue bear­ing in­creased re­search costs for some time. A study pub­lished in the Jan. 13 is­sue of the Jour­nal of the Amer­i­can Med­i­cal As­so­ci­a­tion found, for ex­am­ple, that fund­ing in­creases for bio­med­i­cal re­search have slowed since 2005, and an­nual ad­just­ments from both the pub­lic and pri­vate sec­tor have not kept pace with inflation. Ad­di­tion­ally, de­vice­maker Bos­ton Sci­en­tific Corp. ear­lier this month in­di­cated that it won’t boost re­search and de­vel­op­ment spending be­yond its cur­rent bud­get of about $1 bil­lion an­nu­ally, and that much of that fund­ing will be al­lo­cated to­ward near-term growth ini­tia­tives.

An­other in­di­ca­tor of a con­tin­ued re­search-fund­ing pinch came in early Jan­uary when John Kreger, a fi­nan­cial an­a­lyst with the in­vest­ment firm William Blair & Co., said in a re­port that phar­ma­ceu­ti­cal com­pa­nies’ use of con­tract re­search or­ga­ni­za­tions to per­form clin­i­cal and pre­clin­i­cal tri­als of drugs had fallen off dur­ing 2009 and was ex­pected to re­main low dur­ing the first half of 2010. While con­tract re­search or­ga­ni­za­tions are not af­fil­i­ated with aca­demic med­i­cal cen­ters, their de­cline in busi­ness is sug­ges­tive of a broader trend to­ward de­creased re­search fund­ing.

Data pre­sented in the JAMA study, “Fund­ing of U.S. Bio­med­i­cal Re­search, 2003-2008,”

Aare telling. Ac­cord­ing to the study’s au­thors, bio­med­i­cal re­search fund­ing from both pub­lic and pri­vate sources in­creased from $75.5 bil­lion in 2003 to $101.1 bil­lion in 2007. Ad­justed for inflation, how­ever, the nearly $26 bil­lion in­crease ac­tu­ally rep­re­sents a re­duc­tion in an­nual fund­ing growth com­pared with pre­vi­ous years. Over­all, bio­med­i­cal-re­search fund­ing from 2003 to 2007 in­creased by just 14% for a com­pounded an­nual growth rate of 3.4%, the study found. By com­par­i­son, fund­ing from 1994 to 2003 in­creased at an an­nual rate of 7.8%.

Looking at more re­cent fund­ing trends, the au­thors con­cluded that, ad­justed for inflation, com­bined fund­ing from the Na­tional In­sti­tutes of Health and in­dus­try sources to­taled $88.8 bil­lion in 2008 com­pared with the equiv­a­lent of $90.2 bil­lion in 2007.

The fund­ing de­clines can be at­trib­uted to a num­ber of in­flu­ences, in­clud­ing the ail­ing econ­omy, fewer ap­provals of new med­i­cal prod­ucts by the Food and Drug Ad­min­is­tra­tion and grow­ing de­bate over the ef­fec­tive­ness and cost of new in­ter­ven­tions, re­searchers said.

“The 2007-2009 se­vere global re­ces­sion has re­newed fo­cus on pub­lic spending and has caused com­pa­nies and foun­da­tions to re-ex­am­ine their pri­or­i­ties,” wrote the study’s au­thors. “Also, de­bate in the United States about the role of the fed­eral gov­ern­ment in pro­vid­ing health in­sur­ance has cast at­ten­tion on the al­lo­ca­tion of re­search sup­port, es­pe­cially be­tween dis­cov­ery of new clin­i­cal in­ter­ven­tions and the eval­u­a­tion of their ef­fect, value and cost.”

Bon­ham said the study find­ings match what the AAMC is hear­ing from aca­demic med­i­cal cen­ters and teach­ing hos­pi­tals about de­creases in their lev­els of out­side fund­ing for med­i­cal re­search. “The con­cern for us is work­force plan­ning and, ul­ti­mately, the lost op­por­tu­ni­ties to find new in­ter­ven­tions,” she said.

One bright spot in the find­ings is the sug­ges­tion that some of the money pre­vi­ously spent on new-prod­uct re­search is be­ing shifted to­ward re­search into com­par­a­tive ef­fec­tive­ness, de­liv­ery of health­care ser­vices and health­care in­for­ma­tion tech­nol­ogy. “We will have larger in­vest­ments in com­par­a­tive ef­fec­tive­ness, which we have not done a huge amount of work in at this point,” Bos­ton Sci­en­tific Pres­i­dent and CEO Ray El­liott told at­ten­dants ear­lier this month at the JPMor­gan Health­care Con­fer­ence.

“The good news is com­par­a­tive-ef­fec­tive­ness re­search, which was not cov­ered in the ar­ti­cle be­cause of the time frame, got a huge boost in the stim­u­lus act,” said Carolyn Clancy, di­rec­tor of the Agency for Health­care Re­search and Qual­ity, in ref­er­ence to the Amer­i­can Re­cov­ery and Rein­vest­ment Act. “I think right now there’s such a large gap in in­for­ma­tion that helps us sort out what ex­ist­ing ther­a­pies will be most ben­e­fi­cial, and there is work we need to do to close that gap. I also think that in the fu­ture, com­par­a­tive ef­fec­tive­ness re­search can be used to help re­searchers de­cide where there is a need for in­no­va­tion.”

But while such a shift can pro­vide im­por­tant in­for­ma­tion for the im­prove­ment of pa­tient care, the JAMA re­searchers noted it could also have un­ex­pected con­se­quences for other ar­eas of the health­care in­dus­try. The move­ment of dol­lars away from the de­vel­op­ment of novel treat­ments would ul­ti­mately in­flu­ence re­searchers’ ca­reer choices and make them shy away from high-risk, long-term projects, which are im­por­tant to the de­vel­op­ment of ther­a­pies for hard-to-treat ill­nesses and con­di­tions with large pub­lic-health im­pli­ca­tions.

Ray Dorsey, lead re­searcher on the JAMA study and an as­sis­tant pro­fes­sor of neu­rol­ogy at the Uni­ver­sity of Rochester (N.Y.) Med­i­cal Cen­ter, said health­care pol­i­cy­mak­ers may need to re­align the in­cen­tives for med­i­cal-prod­uct de­vel­op­ment in or­der to en­cour­age in­creased fund­ing of novel re­search, though he didn’t ven­ture to say what those steps could be.

“If a com­pany can make slight changes to ex­ist­ing drugs and keep ex­clu­siv­ity, there’s no in­cen­tive to in­vest in costly re­search,” Dorsey said. “I think we have to be cau­tious when en­cour­ag­ing in­vest­ment in new tech­nol­ogy and say that it will take years, if not decades, to re­al­ize a re­turn on in­vest­ment.”

Bon­ham: Can aca­demic cen­ters keep bear­ing in­creased costs?

Clancy: Com­par­a­tive­ef­fec­tive­ness re­search got stim­u­lus boost.

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