by Jeffrey Mervis
A senior U.S. National Institutes of Health official took a step toward mending fences with the chair of the Senate Small Business Committee today by assuring her that the agency is doing its best to give small businesses their rightful share of stimulus funding for research.
Senator Mary Landrieu (D–LA) has been steamed by a clause in the $787 billion American Recovery and Reinvestment Act that allowed NIH to exempt its slice, some $7.3 billion, from the 2.5% tax on every federal agency's research budget that funds the 27-year-old Small Business Innovation Research program. So she included Sally Rockey, NIH's acting head of extramural research, in a oversight hearing on how the stimulus funds have affected small businesses.
Rockey told Landrieu that NIH wasn't getting enough high-quality SBIR proposals—the number of applicants had dropped by almost half since 2003—to warrant expanding the program.
Although she declined to answer Landrieu's question about whether NIH requested the exemption, Rockey said that "we need to do a better job" of increasing participation and mentioned one new program designed to attract first-time applicants.
Landrieu did extract a promise from Rockey that "we're committed" to maintaining the current set-aside for SBIR and a smaller companion program totaling 2.8%. And Rockey predicted that NIH would end up giving small businesses about $200 million of its stimulus research funds—roughly what the set-aside would have accomplished—even without a mandate to do so.
Let me get this straight. SBIR applicants have decreased by 50% over the same time period during which private venture capital for early-stage biotech companies has dried up? Where then are biomedical entrepreneurs getting their start-up money? There's something wrong with this picture. Are we under-investing in next generation biotech companies? It seems that there might be an enormous opportunity here for ARRA/NIH/SBIR to invest in new companies that have a bit longer time to ROI than the 18 months VCs will currently tolerate. If the SBIR system is broken, let's fix it.
Why has the number of SBIR applicants to NIH dropped by almost half in the past six years? Could it be that they became frustrated with the system? My experiences with the program echo some of the concerns expressed by the previous commenter, that SBIR applicants are considered second-class citizens by the basic researchers from academe that populate most of the study sections. I am not aware that the NIH extramural program has ever done any serious outreach to entrepreneurs and the business community. Who do they think pays the taxes that fund their research programs? So-called "translational research" is currently in vogue. But until NIH understands that true translation occurs only when the results of research are commercialized, this term will only be a buzzword that academic researchers use in their grant applications to fit the current fashion.
Over the years, I have been both a reviewer of and applicant for SBIR grants. I regret to say to I've concluded that the SBIR program is not taken seriously by at least some NIH officials. For one application, I received an non-fundable score based upon written critiques that contained factual errors, sarcasm and insulting language. Although there is a rebuttal process, I was advised against pursuing this because it would alienate the review committee and decrease, even further, my chances for future funding. I was told off-the-record by two members of the review committee that SBIR Fast-track applications are "dead on arrival." I was also told, off-the-record, by an NIH official that SBIR work is considered a low-prestige assignment and that many university-based reviewers and grantees that serve on study sections resent Congressional set-asides for small businesses, especially when money is tight. I would suggest an outside audit of the program because I suspect that my experiences with SBIR are far from unique.