Print“We found that the U.S. share declined even as global R&D; investments by industry remained flat (after adjustment for inflation), which suggests that industry is simply reallocating R&D; funding to Asia–Oceania, writes Chakma. ”
America's share of the world's quarter trillion dollar annual investment in biomedical research and development once accounted for more than half the global total. An updated study finds the U.S. share falling to 45 percent and declining.
The nearly six percent dip in the five years between 2007 and 2012 marks the end of two decades of American leadership in R&D investment and may imply declining competitiveness, suggest the authors. They found static federal support and falling industry investment in the U.S. even as investment by Asian governments and industry has grown.
The decline in U.S. spending “was driven almost entirely by reduced investment by industry, not the public sector," writes the study's lead author, Thomas, McNerney & Partners analyst Justin Chakma in The New England Journal of Medicine. Between 2007 and 2012, U.S. industry reduced its R&D investment by $12.9 billion.
The U.S. share of global industry R&D expenditures decreased from 50.4 percent in 2007 to 42.3 percent in 2012, says the study. European industry R&D expenditures decreased too, but remained essentially unchanged given increased purchasing power. Industry R&D expenditure in Asia–Oceania, however, showed an increase of $15.1 billion, growing the region’s share of global industry investment from just 19 percent to 26.5 percent, a rise driven primarily by a $6.7 billion increase in Japan and a $4.8 billion increase in China.
Asia’s relatively low-cost labor and attractive government subsidies, may underpin part of the geographic shift in global R&D expenditures to Asia, the authors suggest. “We found that the U.S. share declined even as global R&D investments by industry remained flat (after adjustment for inflation), which suggests that industry is simply reallocating R&D funding to Asia–Oceania,” writes Chakma. Increasing development costs per FDA drug approval may also play a role, he writes.
Still, spending by both industry and public funders in Asia-Pacific countries and Australia in 2012 is just little more than half the spending of U.S. funders.
Public sector R&D expenditures—those made by government, institutions, and charities—increased in all regions during the five years the authors studied. Spending rose by $859 million in the United States, $452 million in Europe, and $5.8 billion in Asia–Oceania, driven primarily by a $2.2 billion increase in Japan and a $1.4 billion increase in China.
While U.S. public sector spending kept pace with inflation over the five years the authors studied, they found a decrease in National Institutes of Health spending, offset by increases from the American Recovery and Reinvestment Act, an offset that was diminished in 2013 due to sequestration.
The study's authors analyzed R&D expenditure data from government agencies, statistical bureaus, and industry associations.
Though acknowledging the limitation of the study's data set, Chakma says his team's overall findings “reveal a decline in U.S. financial competitiveness in biomedical R&D and may have implications for the debate over appropriate federal policy” in the area. “The lack of a coordinated national biomedical R&D strategy is disappointing, at a time when mature economies such as those of Japan and Europe have maintained their level of investment in this area,” he writes.
January 03, 2014
http://www.burrillreport.com/article-asia%e2%80%99s_share_of_biomedical_rd_investment_grows.html
.gif)
