Rebuilding the U.S. Biomedical Innovation Engine: The Case for Sustained Federal Research Investment
Key Insights
Federal investment in basic science through NIH and NSF built the foundation for GPS, the internet, CRISPR (search), mRNA vaccines (search), and CAR-T (search) therapies, with no short-term commercialization mandate.
NIH funding has declined as a share of GDP, with inflation-adjusted budgets below 2003 peaks, narrowing the discovery pipeline and threatening U.S. scientific leadership.
Every dollar invested in NIH research generates $2.57 in economic activity, driving over $822 billion in new economic activity over the last decade and supporting 370,000–390,000 jobs annually.
In 1945, Vannevar Bush presented President Roosevelt with a report titled Science: The Endless Frontier, arguing that the federal investment in science that helped win World War II should not stop at the armistice. Congress agreed. The National Science Foundation was established in 1950, and the National Institutes of Health was formalized and dramatically expanded. Together, they created what Dietrich Stephan, Ph.D., a repeat founder and former NIH researcher, calls "the greatest innovation engine the world has ever seen, and the foundation of the economic leadership the United States still enjoys today."
What followed was a three-stage system no other country has fully replicated: the federal government funded basic research with no obligation to produce a product; those discoveries attracted venture investors willing to accept risk; and when something reached commercial scale, large industry players brought manufacturing and distribution muscle to bear. "Each stage required the one before it," Stephan writes. "Venture capital did not fund basic science because it was too early and too uncertain. The federal government funded it because it was the only actor with both the public-good mandate and the time horizon to do so."
What Basic Research Built
The returns on that federal investment have been extraordinary. Every dollar invested in NIH research currently generates $2.57 in economic activity. Over the last decade, NIH funding has driven more than $822 billion in new economic activity and supported an average of 370,000 jobs per year — a figure that reached more than 390,000 jobs in fiscal year 2025.
The mRNA vaccines (search) that helped end the COVID-19 crisis emerged from decades of federally supported research that, for years, appeared uncertain and commercially impractical. Cancer (search) immunotherapy, including CAR-T (search) approaches, demonstrated that the immune system can be redirected to attack disease in ways once thought impossible — the product not of a single breakthrough but of years spent understanding how immune cells recognize and respond to disease. Checkpoint blockade for cancer, which has saved more than one million lives, resulted from years of work in basic preclinical models.
The GLP-1 (search) class of drugs, such as Ozempic, expected to slash diabetes (search) and obesity (search) rates across the country, was derived in part from NIH-sponsored basic research on the venom of the Gila monster. And just recently, a child diagnosed with a rare genetic disorder was successfully treated with a customized CRISPR (search) gene editing therapy by a team at Children's Hospital of Philadelphia and the University of Pennsylvania. "From humble beginnings in studies of bacterial defense systems to correcting genetic disorders in children, these approaches have their origins in federally funded basic science research."
As ASU President Michael Crow has noted, Elon Musk would not have Tesla or SpaceX without the decades of academic research NSF underwrote. The same is true for AI, mRNA vaccines (search), and CRISPR (search). "None of it emerged from quarterly earnings calls. It emerged from basic science funded by taxpayers who were never promised a specific return."
Where the Drift Began
The erosion has been gradual but consequential. NIH funding as a share of GDP has declined. Adjusted for inflation, NIH funding today remains below its 2003 peak, and recent budgets have struggled to keep pace with the rising cost of doing science. Peer review processes have shifted toward funding the familiar over the bold. Investigators have learned to frame proposals in ways that look safer and more incremental. The translation pathway from academic discovery to venture investment has grown more congested, and early-stage biotech has never fully recovered from the post-COVID capital collapse.
"As resources tighten, fewer promising ideas move forward, and the pipeline of discovery narrows." Meanwhile, the public has never fully understood what NIH and NSF actually built. "Every pill marketed on television, every cancer (search) therapy approved in the last thirty years, every vaccine that ended a pandemic has roots in federally funded basic science. No one made that case consistently."
The rest of the world has not stood still. China has made sustained, deliberate investments in basic research over several decades, building science cities, funding academic institutions, and deploying capital at scale. Europe and the UK are doing the same, and as federal funding pressure has intensified at home, they have been welcoming American scientists who want to keep doing serious work. "More science happening globally is a good thing. But there is a meaningful difference between a world where the U.S. helps lead that progress and one where it watches from the sidelines, and right now the trajectory points in the wrong direction."
The Next Frontier
Stephan, who has spent twenty years building companies at the frontier of life sciences — from Navigenics in 2006 to NeuBase Therapeutics — argues that personalized prevention of chronic disease, more genetic medicines, and combination oncology therapies targeting all pathways driving tumors simultaneously represent where the most important medical science of the next twenty years will happen. "All of it depends on a basic research foundation that is under more pressure than it has faced in a generation."
Researchers at the Colton Center for Autoimmunity (search) are now applying breakthroughs to autoimmune conditions (search), opening the door to treatments that are more precise, more durable, and less reliant on broad immune suppression. These include CAR-T (search) cells for autoimmunity, advances in treatment for multiple sclerosis (search), and new research on treatments for rare diseases like retinal vasculopathy with cerebral leukoencephalopathy (search). "This is the promise of precision medicine: not one-size-fits-all care, but interventions shaped by each patient's biology."
The immune system sits at the center of many of the most pressing challenges in medicine, from cancer (search) and infectious disease to chronic inflammation, autoimmunity, and even aging and neurodegenerative diseases. "Advances in immunology are changing what medicine can do, moving us from managing disease to predicting it earlier, targeting it more precisely, and, in some cases, reprogramming the body to fight back on its own."
What Comes Next
The answer, Stephan argues, must start with honesty about what basic research is and what it is not. "It's not a short-term stimulus, not a program to evaluate on a five-year return horizon, but infrastructure for the future. The kind that takes decades to build and much less time to dismantle."
Federal funding can be restructured to reward genuine risk-taking. The tech-transfer pipeline can be modernized. Philanthropic capital can complement rather than substitute for public investment. "What I know from my time at the NIH and everything that came after is that the model worked because someone had the courage to take a long-term view at national scale."
If the United States pulls back from long-term investment in research, talent, and scientific institutions, innovation will slow, discovery and drug development will move overseas, and America risks losing its preeminent place as a scientific leader. "Federal research support reflects a national decision that knowledge serving the public good is worth sustaining even when the payoff is distant."
As the nation marks 250 years since its founding in Philadelphia, the call is for a shared pledge: to recommit to sustaining the patient, collective work of discovery. "The next 250 years of American science will require the same ordinary persistence still practiced every day in laboratories, clinics, and classrooms across the country."