NIH funding ripples: We're No. 2

Federal funding for biomedical research fans out from the labs and clinics where research takes place, boosting jobs, earnings, and business activity. A report released today calculates that broad economic benefit state by state, warning the spinoff could sputter if funding isn’t increased.

Massachusetts pulled in $2.3 billion from the National Institutes of Health in fiscal 2007, behind only California’s $3.5 billion, among seven states in the billion-dollar club. According to the formula used by the national healthcare-consumer organization Families USA , every dollar from NIH produced more than $2 in new business in the 50 states, from cars to construction. In Massachusetts, the figure was $2.14 in new goods and services for every NIH dollar its universities, hospitals, and research institutes received. That multiplier wasn’t enough to put it in the top 10 states, led by Texas with a spinoff of $2.49 per NIH dollar.

Massachusetts trailed number-one California in new jobs created (30,864), total wages from new jobs ($1.8 billion) and average wages per new job ($58,801, which tops the national average of $52,112).

NIH funding has stayed the essentially the same since 2003, after a period of doubling. After accounting for inflation, purchasing power of the NIH budget has declined by 13 percent. The Families USA report predicted what a potential 6.6 percent increase in NIH funding would mean, using the same economic multiplier calculation. Massachusetts could see a gain of $310 million in new business, the report said, with 808 new jobs and a $112 million boost in Bay State wages.

"As Congress evaluates NIH funding, it should keep in mind the interrelated set of benefits that flow from that funding," the report concludes. "An NIH budget that falls short of what's needed hurts lab, hospitals, and communities."