$10.4B allocation in stimulus to NIH is wise investment

As we work our way through some of the most severe economic problems we have experienced in a generation, we are also taking on a challenge of historic significance: healthcare reform. The dimensions of each set of issues, the economic crisis and the healthcare crisis, are huge — but they aren’t separate.

As President Obama has stressed in advocating for reform, the financial aspects of healthcare have a real impact on the nation’s economy. Spending on healthcare comprises a large and growing portion of our gross domestic product. Because of the expenses and the inefficiencies in the healthcare system, uncontrolled spending will have a negative impact on the economy. Conversely, repairing the economy and fixing health care go hand in hand.

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With both issues, it is important that we look to the future with reforms and remedies that will last over time. While we are responding to emergent needs and delivering long-overdue reforms, the crisis we are facing offers opportunities for progress and for growth. A healthcare system with the right priorities and one that makes the best use of resources will contribute to our economic well-being, as well as improved healthcare.

We have to do more than spend money on healthcare; we need to invest in reforms that will improve the quality, expand the accessibility and lower the long-term costs of healthcare. One of the best areas for investments is biomedical research and development. By investing in biomedical innovation and research we are strengthening an industry that already leads the world in progress and influence, while at the same time ensuring the next generation of medical treatments and therapies.

There have been amazing advances in medical devices and pharmaceuticals during the past few decades. Investment in biomedical research has led to groundbreaking discoveries in the fight against cancer, diabetes, heart disease and numerous other conditions that impact the lives of all American families. We have seen the development of new diagnostic tools that have permitted early detection of numerous diseases, and innovative treatments that have saved millions of lives and profoundly improved the lives of many more. In total, we are living longer and healthier lives.

The biomedical industry has already produced economic benefits. The industry directly employs researchers, doctors, nurses, scientists, pharmacists and others. Indirectly, the industry contributes to the employment of countless more.

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For example, in my home state of New Jersey the biotech industry is estimated to impact the state economy to the tune of $28.6 billion. It offers among the highest salaries and benefits in the state, compared to all other industries and helps recruit and retain the best and brightest minds in science, business and medicine here at home.

A robust biotech industry also means that other businesses, large and small, will benefit. In New Jersey, the biotech industry invested $1.46 billion in construction projects last year alone, which translates into well-paying jobs in the construction, services and manufacturing industries. For every new biotech job, another 1.3 jobs are created.

Finally, the success of the biotech industry has meant millions of charitable dollars back to the community. Last year, New Jersey biotech companies donated roughly $4.5 billion worldwide and $221 million of that into local charities.

These facts are why I fought for increased funding in the American Recovery and Reinvestment Act for what is the largest, most significant biotech research entity in the world: the National Institutes of Health. The Recovery Act provided a total of $10.4 billion to the NIH. This investment in biotech research will have immediate economic benefits with a ripple effect that could contribute to economic growth at universities, hospitals and local companies.

In 2007, NIH grants and contracts created more than 350,000 jobs that generated $18 billion in salaries and wages. These figures will be larger for 2008 and for this year. These investments are providing economic activity at a time when it is desperately needed and will serve as a down payment on advanced biomedical research.

We have a proud and accomplished tradition in this country of rising to meet challenges, no matter how daunting; we have an equally accomplished tradition of innovation and ingenuity. What better way is there to tap into the great American wellspring of resourcefulness and industry than by investing in research that combats disease and leads the world in scientific progress?


Pallone is chairman of the House Energy and Commerce Committee’s health subcommittee.


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