If you take prescription medications, thank a taxpayer.

That’s the take-away from an article being published in Thursday’s edition of the New England Journal of Medicine that examined the role of “public-sector research institutions” – think universities, hospitals, nonprofits and federal labs like the National Institutes of Health – in drug development.

Historically, government-funded scientists conducted basic research and private companies used that information to create pharmaceutical products. For instance, NIH researcher Julius Axelrod won the Nobel Prize in Physiology or Medicine in 1970 for his fundamental discoveries about neurotransmitters; later, companies like Eli Lilly & Co., Pfizer and SmithKline Beecham built on that work to develop the class of antidepressants known as selective serotonin-reuptake inhibitors, including Prozac, Zoloft and Paxil.

But public-sector research institutions (or PSRIs, for short) became more active players in drug development following the biotech revolution of the mid-1970s. Government-funded researchers used recombinant DNA technology and monoclonal antibodies to discover and invent biologic and small-molecule drugs. Patents proliferated, but few of these candidate drugs were licensed to the private sector. Then, in 1980, the Bayh-Dole Act and other federal legislation changed the rules on technology licensing, making it more appealing for drug companies.


A group of researchers from Boston University, the NIH and the Norwegian Radium Hospital Research Foundation set out to quantify the contribution of PSRIs toward development of drugs and vaccines that have been approved for use by the U.S. Food and Drug Administration. The task required them to spend a great deal of time with the FDA’s Orange Book, which details the patent history of all new drug applications that were ultimately approved. They also scoured news reports and company announcements and surveyed academic technology licensing officers to catch any other drugs they might have missed.

Altogether, they gave 75 PSRIs credit for inventing 153 new drugs that won FDA approval from 1970 to 2009. The NIH was responsible for 22 of the drugs on that list, and the University of California system came in second with 11. Rounding out the top five PSRIs were Memorial Sloan-Kettering Cancer Center in New York with eight, Emory University in Atlanta with seven, and Yale University in New Haven, Conn., with six. Virtually half of the new drugs were developed for treating cancer or infectious disease.

And these weren’t just run-of-the-mill drugs – they were important ones. For instance, 46% of the drugs developed by PSRIs got priority reviews from the FDA (an indication that they offered a substantial improvement over existing treatments), compared with 20% of the drugs from the private sector.

In addition, the researchers wrote, “Virtually all the important, innovative vaccines that have been introduced during the past 25 years have been created by PSRIs.”


Public research institutions were also particularly good at identifying new uses for existing drugs. From 1990 to 2007, the FDA approved only 10 such requests; nine of them originated in PSRIs, according to the study.

Overall, the team concluded, “PSRIs tend to discover drugs that are expected to have a disproportionately important clinical effect.”

That’s your tax dollars at work.

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