![]() The bottom line is that public investment in biomedicine will stimulate new R&D, and investments in basic research-of the sort that CIRM makes – yield the greatest benefit. A $1 investment in clinical research stimulates $2.35 of private R&D over 3 years. Much of CIRM’s early work was basic research, but there is also evidence that later stage, clinical investments will also spur additional investment in the United States-albeit in a more muted manner. Overall, it seems clear that public biomedical investment does not crowd out private investment and likely stimulates it. Explicit partnerships like the Global Alliance for TB Drug Development bring together philanthropic donors (such as the Gates Foundation) with the public and private sectors to tackle global diseases. Internationally, the evidence is even more compelling. industry R&D investment over the next eight years. ![]() A $1 investment in basic research -even with great uncertainty about its potential market applicability-can stimulate an additional $8.38 of U.S. It is rather remarkable that, even in these rancorous and fiscally challenging times, the National Institutes of Health gets strong bipartisan support and large budget increases.Īnd evidence suggests these investments eventually pay off. Government takes on much of this risk, and most Americans see the value of doing so. ![]() ![]() With a new biological cell line, it is much harder to predict the clinical pathway and ultimate therapeutic benefit. With a new rail line using established technology, it is relatively straightforward to estimate what it will take to build, who will use it, and how much they will pay. Scientific discovery is a fundamentally risky process, and some of the basic research is so risky that the private sector will often not undertake it. When it comes to biomedicine, however, the calculus is different. When the government chooses to build a new public road, for example, one can easily see how it would discourage private investors from building a competing rail line. In some industries, the crowding out is obvious. This issue is not unique to biomedicine-economists often worry that public investment ‘crowds out’ private enterprise, often inefficiently. The first question is whether public research investment advances scientific discovery. Given this context, it is worth considering whether continued public investment by a single state makes economic sense. CIRM will disburse its final funds next fiscal year. Later funding focused on clinical research, including cancer, diabetes, heart disease, blindness, and Alzheimer’s disease. Early investment supported facilities where scientists could work. CIRM does not do research itself, but rather funds stem cell research in California. This proposition authorized $3 billion in bond funding to launch the California Institute for Regenerative Medicine (CIRM). In 2004, California voters overwhelmingly passed the California Stem Cell Research and Cures Initiative. If CIRM could marginally accelerate one therapeutic discovery of this magnitude, the return to California would more than justify the initial investment. Further, our analysis finds that if diabetes research led to a reduction in the incidence of diabetes of just 10% in California, we estimate that would be worth $60 billion to its residents. Four CIRM-funded studies are currently in stage-three clinical trials and show promising advances in kidney failure and ALS therapies. The real benefits from this investment, however, will accrue with therapeutic advances. The direct and indirect (through supply-chain effect) economic benefits of the funding were substantial: by our estimate, the initiative created more than 56,000 jobs and added around $10 billion to the state’s economy. We argue there is a strong economic justification for stimulating basic research and therapeutic development in this field. In 2004, California voters passed a $3 billion bond measure to fund the California Institute for Regenerative Medicine. There is significant controversy surrounding public investment in stem cell research by the federal government. Stem cell research is a worthwhile investment for Californians.The potential to make therapeutic advances in areas such as diabetes, cancer, or stroke would pay enormous returns.We find the measure created over 56,000 jobs and added approximately $10 billion to the state’s economy.California’s $3 billion investment in the California Institute for Regenerative Medicine was unprecedented and has been the source of some controversy.
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