Kenneth A. Getz
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Each quarter I receive half a dozen emails and phone calls from professionals looking for the latest figures on the size and
growth of the overall clinical research and clinical trial grants markets. This column provides a summary of my most recent
analysis for general consumption and for input into business planning, budgeting, and market research purposes.
When I began tracking and analyzing clinical research spending back in the early 1990s, there were very few credible data
sources. Today there is a vast improvement in the number and quality of information available. These sources provide top-line
data on government and industry spending practices in nominal $US dollars, the most recent data through 2008. I then use metrics
gathered from original research conducted by the Tufts Center for the Study of Drug Development (Tufts CSDD) or by various
government and private organizations to focus in on clinical research and grant spending.
In my discussion of the results, I'll indicate where these metrics have been applied. All government figures include the NIH
and other federal funding sources as determined by the National Health Expenditures Accounts (NHEA). Industry figures come
from the Pharmaceutical Research and Manufacturers of America (PhRMA), Burrill & Company, which publishes research and development
expenditures of biopharmaceutical companies that are not PhRMA members, and from annual reports of the 20 largest medical
device companies.
Large and lopsided
Total spending on R&D, including NIH, other federal sources, pharmaceutical, biotechnology, and medical device companies,
reached nearly $94 billion in 2008. Between 2000 and 2008, total R&D spending grew by 6.9% annually. Overall, however, the
rate of growth in total R&D spending has been decelerating at 5.7% annually. No doubt the 2009 figures—when available—will
show an even sharper rate of deceleration.
Although growth in total R&D spending has been slowing down, the same cannot be said for total spending on drug and device
development. In 2008, more than $35 billion was spent on clinical research of investigational treatments, up from $18 billion
in 2000, an 8.6% eight-year annual growth rate. During the period 2004 to 2008, clinical research spending from all sources
grew by 9.0% each year. The proportion of total R&D spending attributed to clinical research activity is based on benchmark
studies conducted by Tufts CSDD and published survey results from PhRMA.
It's important to note that clinical research activity receives more than $4 of every $10 dollars ($US), from all sources,
of total R&D spending. But government spending on clinical research must be adjusted downward to isolate spending on clinical
research of investigational drugs and interventions. The NIH and other federal sources spend the bulk (63%) of their clinical
research budgets on epidemiologic and behavioral studies and research involving human blood and tissue samples. Slightly more
than a third of total government spending on clinical research is for clinical trials testing of investigational treatments
among study volunteers.
Industry is the primary driver of growth in spending on clinical research of investigational drugs and devices—accounting
for 90% of total spending or nearly $32 billion. Slightly more than 10% of the total—$3.6 billion—comes from the NIH and other
federal sources. Industry spending on clinical trials research grew 8.8% annually between 2000 and 2008, faster than the rate
of growth in total R&D spending.
Dissecting Clinical Research Spending
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Between 2004 and 2008, the rate of growth in industry spending accelerated to 9.4% annually. Government spending on clinical
trials grew at a comparable rate to that of industry spending during the eight-year period measured but grew at a substantially
slower rate of 5.6% each year during 2004 to 2008, reflecting the Bush Administration's spending policies.
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