• Biosimilars
  • Drug Development/R&D
  • All Topics
OHE OHE
Newsletter SignupSubscribe

News & Insights
  • News
  • Events
  • Insights
  • Bulletin
  • News
  • Events
  • Insights
  • Bulletin

News & Insights

  • News
  • Events
  • Insights
  • Bulletin
Newsletter SignupSubscribe
  • News
  • Events
  • Insights
  • Bulletin

Close
OHE OHE
  • Research & Publications
  • News & Insights
  • Education
  • Innovation Policy Prize
  • Events
  • About Us
  • OHE Experts
  • Contact Us
Newsletter SignupSubscribe

Research & Publications

All Publications

Filter by:
  • Antimicrobial Resistance (AMR)
  • Biosimilars
  • Cell and Gene Therapies
  • Chronic Diseases
  • Combination Therapies
  • COVID-19 Research
  • Digital Health
  • Drug Development/R&D
  • Emerging Markets
  • EQ-5D and PROMs
  • Health Care Systems
  • Health Data and Statistics
  • Health Technology Assessment
  • Precision Medicine
  • Real World Evidence
  • Use of Medicines
  • Value-Based Pricing
  • Vaccine Research
  • Economics of Innovation
  • Measuring and Valuing Outcomes
  • Policy, Organisation and Incentives in Health Systems
  • Value, Affordability and Decision Making

News & Insights

  • News
  • Events
  • Insights
  • Bulletin

Education

  • Education Hub
  • OHE Graduate School
  • EVIA Programme

Innovation Policy Prize

  • The Prize Fund
  • 2022 Prize Fund

Latest Research & Publications

  • Antimicrobial Resistance (AMR)
  • Economics of Innovation

Incentivising New Antibiotics: Designing a Value-Based Delinked Pull Incentive Mechansim

ABPI_Incentivising_Antibioics_peter-pryharski-unsplash_landscape
Read more

Proposal for a General Outcome-based Value Attribution Framework for Combination Therapies

CombTher_Adobe_photoguns_portrait
Read more
© photoguns
  • Digital Health

Navigating the Landscape of Digital Health – United Kingdom

Healthcare_Adobe_elenabsl
Read more

2021 OHE Annual Report to the Charity Commission

charityreport_lina-trochez-unsplash_landscape
Read more
© Lina Trochez/Unsplash

Supporting the Era of Green Pharmaceuticals in the UK

Sustainability_AdobeStock_270582392_landscape
Read more

Quality of life and wellbeing in individuals with experience of fertility problems and assisted reproductive techniques

Quality of life assisted reproduction Cover
Read more
  • Cell and Gene Therapies
  • Value, Affordability, and…

Health Technology Assessment of Gene Therapies: Are Our Methods Fit for Purpose?

gene_therapies_national-cancer-institute-unsplash_landscape
Read more
© NCI/Unsplash
  • Drug Development/R&D
  • Economics of Innovation
  • Health Policy and Regulation

Limitations of CBO’s Simulation Model of New Drug Development as a Tool for Policymakers

CBO-US_mayer-tawfik-K4Ckc0AxgDI-unsplash_landscape
Read more
© Mayer Tawfik/Unsplash
Close
OHE
  • All Publications

    Filter by:
    • Antimicrobial Resistance (AMR)
    • Biosimilars
    • Cell and Gene Therapies
    • Chronic Diseases
    • Combination Therapies
    • COVID-19 Research
    • Digital Health
    • Drug Development/R&D
    • Emerging Markets
    • EQ-5D and PROMs
    • Health Care Systems
    • Health Data and Statistics
    • Health Technology Assessment
    • Precision Medicine
    • Real World Evidence
    • Use of Medicines
    • Value-Based Pricing
    • Vaccine Research
    • Economics of Innovation
    • Measuring and Valuing Outcomes
    • Policy, Organisation and Incentives in Health Systems
    • Value, Affordability and Decision Making
    • News
    • Events
    • Insights
    • Bulletin
    • Education Hub
    • OHE Graduate School
    • EVIA Programme
    • The Prize Fund
    • 2022 Prize Fund
  • Events
  • About Us
  • OHE Experts
  • Contact Us
Newsletter SignupSubscribe
Back
  • News
11 min read 8th March 2016

New Publication: Spillovers between Public and Private Sector Biomedical and Health Research

OHE’s Yan Feng and Jorge Mestre-Ferrandiz have co-authored a new publication on quantifying the spillovers between public and private sector biomedical and health research and development funding in the UK. In the latest issue of BMC Medicine is an article…

Share:
  •  Twitter
  •  LinkedIn
  •  Facebook
  • has-icon Email

OHE’s Yan Feng and Jorge Mestre-Ferrandiz have co-authored a new publication on quantifying the spillovers between public and private sector biomedical and health research and development funding in the UK.

In the latest issue of BMC Medicine is an article assessing the complementarity between public and private sector R&D in the UK, co-authored by OHE’s Yan Feng and Jorge Mestre-Ferrandiz. 

What are the benefits of biomedical and health research? This is the core question at the heart of any decision to fund research – whether made by the government on behalf of taxpayers or medical research charities on behalf of donors.

It is a methodologically challenging question – there are a set of perennial issues, such as: the time it takes for research to move from bench to bedside (Hanney et al., 2015), benefits that arise from many different research projects, and the difficult issue of measuring and actually valuing research. 

In a recent paper published in BMC Medicine we present an up to date and UK specific estimate of the extent of public/private spillovers in biomedical and health research. We were interested in investigating whether public and private sector research ‘complement’ each other or are ‘substitutes’.  Complementarity is when investments in one sector stimulate activity in another sector; substitution occurs when investment in one sector replaces activity in the other. 

We fitted an econometric model to time series data for biomedical and health R&D expenditure in the UK for ten disease areas (including ‘other’) for the public and private sectors respectively. We found that there was a statistically significant complementary relationship between public (government plus charity) biomedical and health research expenditure and private pharmaceutical R&D expenditure in the UK. A 1% increase in public sector expenditure is associated in the best-fit model with a 0.81% increase in private sector expenditure.

With this magnitude of relationship, every additional £1 of public research expenditure is associated with an additional £0.99 of private sector R&D spend in the UK; 44% of the additional private sector expenditure occurs within one year, with the remainder accumulating over decades.

Using these new estimates we estimate the total impact of biomedical and health research in the UK on the UK economy. This implies a real annual rate of return (in terms of GDP impact) to public biomedical and health research in the UK of around 17% – in other words a £1 investment from public spending would benefit the economy to an extent equivalent to receiving about 17p per year in interest each and every year after (as opposed to our earlier figure of around 30% – see for instance: HERG, OHE and RAND Europe, 2008; Glover et al., 2014)).

We stress this does not imply that there has been a decline in the economic rate of return to public spending on biomedical and health research – what we have developed in this paper is a contemporary estimate specifically for the UK.  Indeed, when combined with the net health benefit (of approximately 10%) the total return on government and charitable research investment in the UK is around 27% – a significant return on investment.

This paper builds on previous studies that have attempted to measure the economic returns from publicly (government and charitable) funded biomedical and health research in the UK for two areas – cardiovascular disease and cancer.  For both studies two types of impact were identified – the first was health gain, which is the (net) monetised health benefit of living longer and healthier lives.  The second was ‘GDP gain’, which is the benefit to the wider economy arising from public and consequential private sector biomedical and health research activity (including additional private sector R&D spending). Much of the economic gain from public biomedical and health research is achieved by stimulating additional private industry R&D. Such ‘spillovers’ from public to private research are often a deliberate policy objective of spending on public research.

Access the full paper here.

For more information contact Jorge Mestre-Ferrandiz at OHE.

References

Glover, M., Buxton, M., Guthrie, S., Hanney, S., Pollitt, A., Grant, J., 2014. Estimating the returns to UK publicly funded cancer-related research in terms of the net value of improved health outcomes. BMC Medicine, 12:99.

Hanney, S.R., Castle-Clarke, S., Grant, J., Guthrie, S., Henshall, C., Mestre-Ferrandiz, J., Pistollato, M., Pollitt, A., Sussex, J. and Wooding, S. 2015. How long does biomedical research take? Studying the time taken between biomedical and health research and its translation into products, policy and practice. Health Research Policy and Systems, 13(1), pp.1-18.

Health Economics Research Group, Office of Health Economics and RAND Europe, 2008. Medical Research: What’s It Worth? Estimating the economic benefits from medical research in the UK. Consulting report. London: UK Evaluation Forum. Available here.

Sussex, J., Feng, Y., Mestre-Ferrandiz, J., Pistollato, M., Hafner, M., Burridge, P., Grant, J., 2016. Quantifying the economic impact of government and charity funding of medical research on private research and development funding in the United Kingdom. BMC Medicine, 14:32.

  • Drug Development/R&D
  • Economics of Innovation
  • External Publications

Related News

  • News
  • September 2020

Establishing a Reasonable Price for an Orphan Drug

Read more
  • News
  • April 2020

Augmenting Cost-Effectiveness Analysis for Uncertainty: The Implications for Value Assessment—Rationale and Empirical Support

Read more
  • News
  • April 2020

Financing and Scaling Innovation for the COVID Fight: A Closer Look at Demand-Side Incentives for a Vaccine

Read more
  • News
  • February 2020

Unpacking the Black Box of Payer Policy: A Demand-Side Approach for Equitable Uptake of Cost-Effective Health Innovation

Read more
footer_ohe_logo

Leading intellectual authority on global health economics

Sign Up for the OHE News Bulletin

Newsletter SignupStart Sign Up

Research & Publications

News & Insights

Innovation Policy Prize

Education

Events

About Us

OHE Experts

Contact Us

Sign Up for the OHE News Bulletin

Newsletter SignupStart Sign Up

The Office of Health Economics (OHE) is a company limited by guarantee registered in England and Wales (registered number 09848965) and its registered office is at 2nd Floor Goldings House, Hay’s Galleria, 2 Hay’s Lane, London, SE1 2HB.

Terms & Conditions

Privacy Policy

Cookies Policy

© 2023 Website Design

An error has occurred, please try again later.An error has occurred, please try again later.

We are using cookies to give you the best experience on our website.

You can find out more about which cookies we are using or switch them off in settings.

 Twitter
 Facebook
 LinkedIn
 Copy
 Email
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.

3rd Party Cookies

This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.

Keeping this cookie enabled helps us to improve our website.

Please enable Strictly Necessary Cookies first so that we can save your preferences!