1. A Look at Federal R&D and Life Science Funding Matt Hourihan September 18, 2015 AAAS R&D Budget and Policy Program http://www.aaas.org/program/rd-budget-and-policy-program http://www.aaas.org/program/rd-budget-and-policy-program

11. Historically… Rate of return of public R&D appears to be high…potentially very high [1] Surveys typically show pharmaceuticals industry is among sectors that place highest value on public/university research.[2] Public R&D seems to induce additional private investment. Some studies: A $1 increase in NIH therapeutic research is associated with a greater than $8 increase in related industry research over time.[3] A 1 percent increase in public R&D stock is associated with a 1.8 percent increase in FDA-approved new molecular entities (NMEs).[4] NIH R&D is associated with follow-on patents (up to 2.3 per $10 million in funding?) and forward citations (5.1 per patent?).[5] Publicly-supported organizations were direct research participants in 19 percent of drug approvals receiving priority FDA review over 20 years.[6] [1] Salter and Martin, “The economic benefits of publicly funded basic research: a critical review,” March 2001. [2] Cohen, Nelson and Walsh, “Links and impacts: the influence of public research on industrial R&D,” 2002. [3] Toole, “Does public scientific research complement private investment in R&D in the pharmaceutical industry?” 2007. [4] Toole, “The impact of public basic research on industrial innovation,” 2012. [5] Battelle, “Patents as Proxies Revisited,” 2015; Azoulay et al, “Public R&D investments and private sector patenting,” NBER 2015 [6] Stevens et al, “The role of public-sector research in the discovery of drugs and vaccines,” 2011.

12. For more info… mhouriha@aaas.org 202-326-6607 http://www.aaas.org/program/rd -budget-and-policy-program