Building a Better NIH: Commercialization of NIH-Supported Research

Commercialization of NIH-supported research is incentivized both through allowing resulting inventions to be patented and licensed, and through direct funding for development efforts. Unfortunately, it’s unclear whether the NIH currently invests “too little” in closing the gap between research advances and clinical applications, or “too much” in providing an unnecessary giveaway to the biopharmaceutical industry—much less which specific projects would or wouldn’t benefit from additional commercialization incentives, or which policy mechanisms are most effective. Although past reform proposals have focused on patenting and licensing policies for NIH-funded inventions, the political and empirical challenges to improving these policies are daunting.Instead, the NIH may have greater social impact through reforms to its direct funding of commercialization. First, the agency should design rigorous policy experiments to assess the impact of these programs for different kinds of inventions, such as whether some investments merely “crowd out” private-sector efforts. Second, Congress should increase NIH funding for late-stage biomedical development, following on the success of public-sector involvement in COVID-19 vaccine and drug development, with the goal of better aligning development efforts with social value rather than just market incentives.Note: This piece was prepared for the Building a Better NIH project, a partnership between the Brookings Institution, the Institute for Progress, and the Good Science Project.