As NIH funding flattens, so do state economies

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The National Institutes of Health (NIH) state funding create jobs and develops communities that are focused on advanced biomedical research, thereby sustaining U.S. leadership in medical research. Yet, as the funding flattens, it can cripple biomedical research, along with the job market, a new report revealed.

The report ““In Your Own Backyard,” from Families USA, a national healthcare consumer organization, detailed the actual benefits of NIH research awards to all 50 states.

In 2007, the NIH awarded almost $23 billion in research grants and contracts, creating more than 350,000 new U.S. jobs, generating more than $18 billion in wages from the new jobs and spurring more than $50 billion in business activity in the states.

However, the report described a downside—several years of flat funding of the NIH from Congress is now crippling research into global health threats, stunting economic activity, and jeopardizing U.S. preeminence in biomedical research.

“The importance of NIH funding in communities across the nation can’t be overstated,” said Ron Pollack, executive director of Families USA. “NIH awards to states spur vital medical research, while at the same time injecting millions of dollars into local economies, creating jobs and new wages. This should be called a win-win-win, because it helps our state economies, our nation’s health, and the health of people around the globe.”

Between 80 and 90 percent of the federal dollars that the NIH sends to states funds research that takes place at universities, medical research centers, hospitals and research institutes in every state in the U.S. The Families USA report analyzed the impact of the awards on all 50 states, using Department of Commerce methodology known as the Regional Input-Output Modeling System.

Overall, the report said that every $1 million that NIH invested generated an average of $2.21 million in new state business activity. The five states that generated the most economic activity per dollar were Texas ($2.49), Illinois ($2.43), California ($2.4), Georgia ($2.36) and Colorado ($2.34).

More than 175,000 jobs were created in six states: California (55,286), Massachusetts (30,864), New York (27,877), Maryland (21,299), Pennsylvania (21,262) and Texas (20,148), according to the report.

The downside of this economic impact, however, is that cuts to NIH funding translate into cuts to states and local communities, and the report noted that federal funding for NIH has not kept pace with inflation, according to researchers.

“The total purchasing power of NIH has fallen by 13 percent since 2003,” Pollack said. “This funding decline hurts our nation’s efforts to improve health here and across the globe, and it hurts efforts to lure and keep scientists that will produce tomorrow’s medical breakthroughs.