Spending on Phased Clinical Development of Approved Drugs by the US National Institutes of Health Compared With Industry

Abstract

The launch of the Advanced Research Projects Agency for Health to advance new cures and address public concern regarding drug prices has raised questions about the roles of government and industry in drug development. To compare National Institutes of Health (NIH) spending on phased clinical development of approved drugs with that by industry. This cross-sectional study examined NIH funding for published research reporting the results of phased clinical trials of drugs approved between 2010 and 2019 and compared the findings with reported industry spending estimates. Data analysis was performed between May 2021 and August 2022 using PubMed data from January 1999 through October 2021 and NIH Research Portfolio Online Reporting Tools Expenditures and Results data from January 1999 through December 2020. Drugs approved between 2010 and 2019. National Institutes of Health funding for published research describing applied research on approved drugs, basic research on their biological targets, and phased clinical trials related to drugs approved between 2010 and 2019 were evaluated using Mann-Whitney U tests. All costs were inflation adjusted to 2018. National Institutes of Health funding for basic or applied research related to 386 of 387 drugs approved between 2010 and 2019 totaled $247.3 billion. Of this amount, $8.1 billion (3.3%) was related to phased clinical development. This funding contributed to 12 340 publications on phased clinical trial results involving 240 of 387 (62.0%) drugs. Average NIH spending was $33.8 million per drug, including $13.9 million per drug for phase 1, $22.2 million per drug for phase 2, and $12.9 million per drug for phase 3 trials. Spending by NIH on phased development represented 9.8% to 10.7% of estimated industry spending, including 24.6% to 25.3% of estimated phase 1, 21.4% to 23.2% of phase 2, and 3.7% to 4.3% of phase 3 costs. Considering 60 products for which estimated industry costs were publicly available, NIH spending on clinical trials was significantly lower than estimated industry spending (sum of averages, $54.9 million per drug; mean difference, $326.0 million; 95% CI, $235.6-$416.4 million; 2-tailed paired t test P < .001). More than 90% of NIH funding came through cooperative agreements or program projects and centers, while 3.3% of NIH funding came through investigator-initiated research projects. In this cross-sectional study, NIH funding for phased clinical development of drugs approved between 2010 and 2019 represented a small fraction of NIH spending on pharmaceutical innovation. This spending focused primarily on early-phase clinical trials and research capacity and was significantly less than estimated industry spending on clinical development. These results may inform the efficient allocation of government funding to advance pharmaceutical innovation.