Who Funds Nobel Prize-Winning Research?

Who Funds Nobel Prize-Winning Research?

The US National Institutes of Health (NIH) website boasts that 50 winners of the Nobel Prize in medicine have been recipients of NIH grants. This would give the idea that NIH funding was pivotal in all of these prize-winning discoveries. The very first was Philip S. Hench, co-winner in 1950, when he was recognized along with two others for discoveries relating to the use of cortisone to treat rheumatoid arthritis. However, a review of Hench’s papers shows that he was initially funded by the NIH in 1950, while the research that earned him the Nobel was done in 1947 and 1948.

Nobel winners have long struggled with research funding, and the NIH was a relative latecomer in the prize history, growing more prominent in the latter half of the century. The immediate predecessor to the NIH was a single room called the ‘Hygienic Laboratory’, founded in 1887 within the Marine Hospital Service. It was located on the Staten Island quarantine station, and was primarily charged with detecting cases of cholera, yellow fever, plague, and smallpox in ship passengers and crew arriving from foreign lands. It received funds for its own building in Washington, DC in 1901, when it was directed to investigate “infectious and contagious diseases and matters pertaining to the public health.” In 1902 the Biologics Control Act expanded their role to regulating the production of vaccines and antitoxins (transferred to the FDA in 1972), as well as research into non-contagious diseases and water pollution.

It grew into the National Institute (singular) of Health, officially named as its own organization in 1930, with a budget of $750,000 for a building as well as for funding of outside research, that is, to doctors and scientists, mostly at medical foundations and university centers. Its first research grants were not awarded until 1938. The NIH expanded with a new campus in Bethesda, Maryland in 1940, and by 1948 it had so many disease-specific departments under its umbrella that it was renamed the National Institutes  (plural) of Health. Congressional allocations to the NIH grew exponentially after WWII – to nearly $53 million in 1950 and hitting the $1 billion mark in 1966.

Today the NIH is the largest public funder of biomedical research in the world, and includes 27 Institutes and Centers. In 2019 US taxpayers provided the NIH with $38.3 billion (an amount that exceeds the gross domestic product of any one of 103 countries). That was a $2 billion increase compared to 2018, with 80% of the annual allocation going to outside research grants. Funded research includes everything from Alzheimer’s ($589 million) to vulvodynia (vaginal pain – $2 million). These days, yellow fever, cholera and plague are not getting grants, but some of the funding still goes towards smallpox ($17 million), although the disease was eradicated worldwide in 1977 by an effort led by the World Health Organization. Modern research concerns include biodefense ($2.3 billion), diabetes ($1.1 billion) obesity ($954 million), antimicrobial resistance ($566 million), marijuana research ($184 million), and the health effects of indoor air pollution ($115 million).

Ever since the 1980 Bayh-Dole Act, the medical treatments that emerged from publically funded research (mostly financed by the NIH) have been permitted to be privately patented and sold, as long as the patent holders are held to price caps. In practice, in its 4-decade existence, no price caps have ever been placed, while drug prices to the consumer have continued to trend ever upward. So consumers are paying twice – for the initial research and then for the filling of their expensive prescriptions, all while pharmaceutical makers justify their prices by claiming that their research and discovery costs are so high.  In fact, R&D costs have gone up, but the top companies spend only an average of 17% of their revenues on research.

A more overt way for taxpayers to finance the potentially most expensive portion of pharmaceutical company expenditures was the creation of the NIH’s newest section –  National Center for Advancing Translational Sciences (NCATS). It launched its mission in 2012 to re-purpose drugs: to find new uses for old drugs, or alternate uses for drugs that were abandoned in pharmaceutical company research because of various reasons – they didn’t work, they had intolerable side effects, or they failed to fit the business model of the company. NCATS is a dream to the pharmaceutical companies, as it frees them up to focus even more of their budgets on lobbying, marketing, and investor dividends. NCATS has been criticized as a major departure of the NIH from their core mission of supporting basic research, and some of the early critics were leaders of the pharmaceutical companies that were not the three (Pfizer, Eli Lilly and Astra Zeneca) specially chosen to launch the NCATS initiative with the NIH.

Since the earliest days of Nobel Prize-winning research, scientists have worked closely with government and businesses to get funded; rarely, the individual scientist reaps some short term financial benefit, but more often, others financially profit, while patients continue to pay dearly for the treatments that emerged from publically-funded discoveries. For more on the trials and tribulations of the Nobel Prize winners in medicine, see Boneheads to Brainiacs, Part 1.


National Institutes of Health (NIH) Funding: FY1994-FY2020. Updated April 4, 2019 congressional research Service.

Philip S. Hench, MD Papers. Manuscript Collection No. 76. McGovern Historical Center of the Texas Medical Center Library, Houston, Texas

Drug Companies Have Big R&D Expenses and Still Make Large Profits by Erik Sherman, Fortune, March 1. 2019. 

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