Federal Influences on Biomedical Technology Innovation

Lilly B. Gardner

• Publisher: Routledge
• Year: 2018
• Print ISBN:
  9780815362999
• eBook ISBN:
  9781351111416
• Topic: Business
• Subtopic: Business General
• Index: Business

Published in 1994, this book examines a small segment of the medical technology innovation process to characterize the manner in which the federal government influences small business-based investigators to participate or withdraw from the medical technology innovation process. It provides an historical account of the federal government's involvement in biomedical technology research and development, and traces the social and economic significance of this involvement.

VII

Results and Discussion

The classification system developed for this study provides a means to evaluate federal incentives and disincentives to participate in the biomedical innovation process at two levels. The first describes those actions and events likely to be encountered by most would-be participants in the biomedical innovation process. The second level identifies those actions and conditions which indirectly facilitated or hampered participation in the innovation process. These are described in detail below.

PRIMARY INCENTIVES

Using the NIH Division of Research Grants (DRG) historical financial data presented in Table 1, it was determined that the SBIR program offered the company the strongest alternative to obtain funds for biomedical technology R&D. The DRG funding data revealed only token awards were made to private/for profit organizations before 1983. Because the increases in private sector awards noted from 1983 through 1986 were directly related to the phasing in of SBIR legislation and the fact that the company qualified as a small business, the SBIR was chosen.

Table 2 identifies the Primary Incentives noted in the review of the SBIR as a potential funding source. Incentives include partial, or sometimes, total funding for one or more steps of the innovation process up to the point of commercialization, a set-aside program specifically designed to advance the innovation process, and strong program support from the Small Business Administration. These Primary incentives are discussed in detail below.

Table 1
Domestic Awards Made by NIH for Fiscal Years 1981 Through 1986 by Performer^a

Fiscal Year	Number	Dollars	Number	Dollars
Public			Private/Non Profit
1981	9,177	931,932,554	8,909	1,213,773,408
1982	8,850	957,636,218	8,712	1,258,918,449
1983	9,133	1,059,221,876	9,151	1,419,964,622
1984	9,383	1,213,767,270	9,464	1,610,227,379
1985	9,985	1,411,190,543	9,932	1,840,391,104
1986	10,212	1,469,701,234	10,090	1,915,654,749
Profit/Large & Unknown			Profit/Small
1981	0	0	3	40,512
1982	2	210,436	8	531,728
1983	12	1,045,415	139	7,776,509
1984	17	1,970,402	271	23,942,617
1985	16	1,936,673	373	36,722,911
1986	12	1,209,336	478	49,531,772

^a Data provided by NIH, DRG.

Table 2
Primary Incentives that were Noted in the Review of the SBIR Program as a Potential Funding Source for this Case-Study

Generous funding for R&D—Sponsoring agency partially funds the entire innovation process or fully funds one or more steps.

Contracting policy—Sponsoring agency decides on a solicitation strategy to enhance private sector response.

Patent, copyright, and rights-in-data policy—Sponsoring agency makes agreement with developer regarding disposition of proprietary claims over the patent.

Lobbying and testimonies—Efforts by sponsoring agency personnel to influence budgetary or legislative processes.

Continuous Funding Cycle—Application cycle offers multiple opportunities to submit applications each Fiscal Year.

Generous Funding for R&D

Under the phase-in SBIR legislation, all participating agencies, including NIH, were obligated to set-aside one and one-half percent of their R&D budgets by 1986, for small firms to develop commercial applications of federally funded research. This represents a small percentage of the total NIH biomedical research budget. Even so, these funds go a long way toward providing funding for R&D work by many small, innovative science and technology-based companies (USGAO, 1987). This program offered a means to acquire total support for at least two phases of multiple R&D activities. This was considered to be quite generous.

Contracting Policy

In the case of the SBIR program, the contracting policy is dictated by P. L. 97-219, the Small Business Innovation Development Act (SBDA). NIH determines the solicitation strategy through the development of their Omnibus Solicitation publications for both grants and contracts. These contain numerous areas of research interest to the government and reflect current agency planning. The set-aside legislation guarantees that at least one and one-half percent of the agency’s total research budget will go to small businesses pursuing projects of interest to the federal government.

Patents, Copyrights, and Rights in Data

Small firms are able to retain rights in inventions and technical data derived from the funded work. As was discussed in Chapter V, the SBIR program differs from th...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Preface
• Health and Government
• Federal Involvement
• Social Significance
• Economic Significance
• The Role of the Investigator
• Investigative Procedures
• Results and Discussion
• Conclusions and Recommendations
• Glossary of Terms
• Appendix A
• Appendix B
• Appendix C
• Appendix D
• References
• Index