Nonprofit commerce – NIH seal of approval

Enterprising scientists are using nonprofit groups to win federal grants to fund research that boosts their own commercial biotech companies, The Wall Street Journal reported Jan. 30.

The National Institutes of Health controls the biggest source of scientific research funds and is more likely to fund a scientist seeking a grant for a nonprofit group rather than a commercial firm, the Journal said.

The annual budget for NIH has grown 57 percent in the past five years, and both Republican and Democratic members of Congress want to increase it again by half – to about $27 billion – by 2003.

In some cases, the same scientists runs both a nonprofit institute and a for-profit company, with both groups sharing lab space, equipment and employees. The two groups often study the same diseases and drugs, with the nonprofit focused on basic research and the for-profit on developing products.

“This is the paradigm for getting things done in the future,” Steven Reed, who helped found linked nonprofit and for-profit Seattle groups, told the Journal.

The NIH does little to deter this entrepreneurial strategy, the Journal said. Like many branches of government, the NIH tries to foster collaboration between nonprofit and for-profit groups to keep publicly funded research from dying on lab shelves.

The effort has led to getting medical products the marketplace more quickly, the Journal said.

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