Investment in Medical and Health R&D Not Keeping Up with Needs of Nation

Total U.S. investment in medical and health research and development (R&D) grew by 6.4% from 2017 to 2018, reaching $194.2 billion. For the third straight year, the growth-rate of medical and health R&D investment outpaced the growth-rate of overall health spending. However, R&D spending still represents only about 5 cents of every health dollar spent. This is one of the key findings of the just-released 2019 U.S. Investments in Medical and Health Research and Development, a new report from Research!America.

The Investment Report shows growth in investment across every sector over the last six years, with industry growth leading at $36.5 billion, followed by the federal government at $9.1 billion.

“This growth in R&D investment is positive and welcome, certainly,” said Research!America’s Chair, the Honorable Michael N. Castle. “However, our nation’s total investment is not tracking with disease burden. Increased investment in medical and health R&D is essential to ending diseases that are taking time and quality of life from Americans and people across the globe.”

Every year, almost 130,000 people in the United States die by the age of 45 due to health threats that a larger investment in R&D can help us better understand and ultimately prevent. Further, major chronic diseases cost our nation more than $1.1 trillion in 2018, which is almost six times the amount all sectors spend on R&D.

In 2018, total U.S. medical and health R&D investment was $194.2 billion. Of that:

  • Industry invested $129.5 billion in medical and health R&D (66.7%).
  • Federal agencies invested a total of $43 billion (22.2%).
  • Academic and research institutions including colleges and universities, independent research institutes, and independent hospital medical research centers invested $15.7 billion of their own funds (8.1%).
  • Foundations invested $2.3 billion (1.2%).
  • State and local governments invested $2.1 billion (1.1%).
  • Voluntary health associations and professional societies invested $1.5 billion (0.8%).

“Increased investment across all sectors contributing to R&D is the right path for our nation, but relative to unmet medical needs, we are walking, rather than running down that path,” said Mary Woolley, president and CEO, Research!America. “Federal funding and policies need to be aligned behind the objective of empowering both public sector and private sector-driven research, because research saves lives.”

The full report breaks down research investments sector by sector.

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