Blog Post

The Funding Ecosystem for Neurodegenerative Disease

| Dec. 16, 2022

Introduction

The funding ecosystem for neurodegenerative disease drug discovery is a complex and multifaceted landscape. In recent years, there has been an increased focus on finding treatments for neurodegenerative diseases such as Alzheimer's and Parkinson's, as the prevalence of these diseases continues to rise globally. This blog aims to provide an overview of the sources and trends of funding for neurodegenerative disease research, with a particular focus on comparing funding for these diseases with that of other classes of diseases. By examining historical funding trends and the current sources of funding, we seek to shed light on the current state of the funding ecosystem for neurodegenerative disease research. We will also explore how funding is allocated across different types of neurodegenerative diseases and discuss potential bottlenecks in the funding process that may be hindering progress in the development of therapies.

Historical Trends in Funding

The National Institutes of Health (NIH) has a long history of allocating the majority of its funding for disease research to cancer. This trend can be traced back to the launch of the "War on Cancer" in 1971, which was a national effort to increase funding for cancer research and accelerate progress in the field. Since its inception, the War on Cancer has been successful in driving significant increases in funding for cancer research, solidifying its status as the disease with the highest level of NIH funding. There was also a notable surge in funding for AIDS research in the late 1980s, however, the amount of funding allocated for AIDS research has remained relatively constant in recent years.

In contrast, funding for neurodegenerative diseases (NDD) has historically been low, potentially due to lower levels of public awareness and pressure regarding these diseases, as well as their biologically complex nature. Neurodegenerative diseases which include conditions such as Alzheimer's, Parkinson's, and Huntington's disease, are characterized by the progressive loss of function in the brain's neurons. These diseases can be difficult to study and treat due to the complex interplay of genetic and environmental factors that contribute to their development. However, there has been a significant increase in funding for NDDs and Alzheimer's research specifically since 2016, when the US Congress directed the NIH to begin reserving a specific amount of funding for Alzheimer's disease research.1

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NIH Funding Trends for National Cancer Institute, AIDS, and Alzheimer’s

Figure 1 shows the trends in NIH research funding for Cancer, AIDS and Alzheimer’s Disease.2

Sources of Funding 

The funding ecosystem for neurodegenerative disease research and biotechnology is a complex and multi-faceted landscape. There are a variety of sources of funding available to support research in these fields, including government agencies, non-governmental organizations, large pharmaceutical companies, and traditional investors through private capital (such as venture capital and private equity funds) or public markets for traded companies. 

Government agencies, such as the National Institutes of Health (NIH) and the Department of Defense, are a major source of funding for research on neurodegenerative diseases (NDD) and biotechnology in general. The NIH, for example, has allocated $3.5 billion specifically for Alzheimer's research. These agencies typically provide funding through grants and contracts to support research projects at universities, hospitals, and other institutions. 

Non-governmental organizations (NGOs) working in particular diseases are another important source of funding for NDD and biotech research. These organizations, such as the Michael J. Fox Foundation for Parkinson's and the Alzheimer's Association, raise funds from donors and use them to support research and other initiatives related to their specific disease focus.3

Large pharmaceutical companies also play a role in funding NDD and biotech research. These companies often have their own internal research and development (R&D) programs, and may also collaborate with academic and other institutions on joint research projects through grants or Public Private Partnerships (PPPs). In addition to internal funding, pharmaceutical companies can also raise funds through public markets, such as by being listed on the NASDAQ, and through debt markets by issuing bonds. 

Finally, traditional private investors, such as venture capital and private equity funds, can also provide funding for NDD and biotech research. These investors typically focus on early-stage biotech companies or companies that are looking to expand and scale up their operations. They may provide funding through equity investments, and sometimes also offer expertise and other support to help companies grow and succeed. Apart from private capital investors, many larger biotech or pharmaceutical companies trade their equity on public stock exchanges such as NASAQ and the NYSE. 


Allocations for Funding

As discussed, funding for research into neurodegenerative diseases comes from a variety of sources, including government agencies, foundations, and private organizations.

One of the major sources of funding for neurodegenerative disease research is the Government through the Department of Defense (DOD) and the National Institutes of Health (NIH). Despite attempts to map and quantify the sources of funding for neurodegenerative disease research, it has been difficult to create a comprehensive database of funding outside of the NIH.

The next few chapters of this research will focus on NIH funding for neurodegenerative disease research. This will involve an analysis of the types of research that are funded by the NIH, the amount of funding provided, and the potential impact of this funding on the field of neurodegenerative disease research. 

Prevalence vs. NIH Funding (Figure 2)

The left side of Figure 2 shows the prevalence of neurodegenerative diseases and the right side shows corresponding NIH funding in 2021 per disease.4

The above figure places the prevalence of NDD side by side with NIH funding for each disease. Alzheimer's disease and related dementias are the most common neurodegenerative diseases (NDD), affecting more than 6.5 million people in the United States alone. In comparison, Parkinson's disease affects 1.2 million people, and amyotrophic lateral sclerosis (ALS) affects approximately 31,000 people. However, the amount of National Institutes of Health (NIH) funding per disease does not necessarily match the prevalence of the disease. Some diseases, such as ALS and Huntington's disease, receive a higher proportion of NIH funding compared to their prevalence.

This difference is even more stark when we compare NIH research funding for these diseases as a proportion of their prevalence, as shown in Figure 3. Diseases like ALS and Huntington's disease receive a lot more funding per person affected. There are a few possible reasons for this.

First, rare diseases like ALS and Huntington's disease often receive high public awareness through high-profile cases, which can lead to increased funding. Additionally, advances in the basic science understanding of these diseases, thanks to ongoing research, has brought clearer identification of genetic causal pathways, which can also attract more funding.

Second, it is possible that there is a minimal threshold of funding needed for any drug discovery exercise, and dividing the funding by much lower prevalence rates creates this stark difference.

Finally, some diseases, such as Parkinson's disease and multiple sclerosis, already have drugs that have been approved for treatment and have proven to be effective. This may have led to lower amounts of funding being allocated for these diseases.

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1: Prevalence data from latest available years: ALS (2017), FTD (2022), Huntington’s Disease (2020), Vascular Dementia (2022), Alzheimer’s Disease (2022), Parkinson’s Disease (2020), Multiple Sclerosis (2020), Lewy Body Dementia (2021). 

 

NIH Research Funding per Patient per Disease

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Figure 3: NIH research funding in 2021 per person per neurodegenerative disease

The National Institutes of Health (NIH) allocates funding for various diseases based on various factors, including policy action and public pressure. As an example, as shown in Figure 4 below, NIH funding for Alzheimer’s research saw a sharp change of directions in 2016. This started a steady increase in funding in response to a directive from the US Congress, culminating with the NIH allocating a significant amount of funding specifically for Alzheimer's disease research, resulting in a $3.5B allocation for the year 2022. 

Similarly, the increase in funding for ALS research after the viral Ice Bucket Challenge in 2014 highlights the role that public awareness and pressure can play in directing funding towards lesser-known diseases.5 This illustrates the positive effects of raising public awareness and applying pressure on policymakers to prioritize funding for specific diseases.
 

NIH Research Funding per disease over time (2011-2021)

Figure 4 shows NIH research spending per NDD per year. The left side of the figure presents the overall spending trend, while the right side presents a zoomed-in version of the same data, with Alzheimer's disease excluded.

 

Potential Bottlenecks in Funding

It is difficult to accurately assess the potential bottlenecks of funding for neurodegenerative diseases without access to more information. However two hypotheses of potential bottlenecks have come up: first there might be limited funding for neurodegenerative diseases. However, another potential explanation could be the efficiency of funding allocation. For example, neurodegenerative diseases may not be a priority for funders, or the funding that is available may not be used effectively.

One potential policy that could help address this issue is to increase funding for neurodegenerative disease research. This could be accomplished by increasing the budget for the NIH, or by directing more funding specifically towards neurodegenerative disease research. Additionally, increasing public awareness of neurodegenerative diseases and their impact on individuals and society could help generate support for increased funding.

In addition to increasing funding for neurodegenerative disease research, implementing policies and using technology to increase the efficiency of funding allocation could also help address the issue of funding. For example, policies that promote collaboration and coordination among researchers and organizations could help avoid duplication of effort and ensure that funding is used effectively. Additionally, the use of technology, such as data analytics and artificial intelligence, could help identify promising research areas and allocate funding accordingly.

Furthermore, implementing a more transparent and accountable system for funding allocation could help ensure that funding is being used effectively. This could include regular reporting on the progress and outcomes of funded research, as well as regular evaluations to assess the effectiveness of funding allocation strategies. By implementing these policies and using technology to increase the efficiency of funding allocation, it may be possible to achieve better outcomes with the available funding for neurodegenerative disease research.

It is important to note that the data used in this analysis only includes funding from the NIH. Expanding the research to include not-for-profit and private investments in neurodegenerative disease research would provide a more comprehensive picture of the current funding landscape. Additionally, analyzing where the funding is spent, and comparing which stages of drug discovery it is intended for, could provide valuable insights into the potential bottlenecks and barriers to funding for neurodegenerative diseases.

 

Next Steps

We aim to understand further the basis on which NIH funding is given to different diseases and the stages of research (basic, pre-clinical or clinical research) where funding is allocated. 

We hope to expand the dataset to include funding from other non-NIH government bodies, such as the Department of Defense and other Governmental entities. Additionally, we plan to analyze the destination of funding per stage of drug discovery, and to speak with key opinion leaders to understand potential usage of technology and policy to make funding more efficiently allocated. 

We look forward to continuing the conversation and research and are available by email at lgiani@hks.harvard.edu and sohaib_nasim@hks.harvard.edu

 

SOURCES:

1: https://crsreports.congress.gov/product/pdf/R/R41705

2: https://www.science.org/content/article/alzheimer-s-gamble-nih-tries-turn-billions-new-funding-treatment-deadly-brain-disease

3: https://www.michaeljfox.org/funding-opportunities

4: https://report.nih.gov/funding/categorical-spending#/

5: https://www.als.org/stories-news/ice-bucket-challenge-dramatically-accelerated-fight-against-als

Sources of data for disease prevalence:

ALS: https://www.cdc.gov/als/WhatisALS.html  (2017)                                                

Frontotemporal Dementia (FTD): https://www.alz.org/media/documents/alzheimers-dementia-frontotemporal-dementia-ts.pdf (2022)                                                     

Huntington’s Disease https://n.neurology.org/content/94/15_Supplement/954 (2020)  

Vascular Dementia: https://www.alz.org/alzheimers-dementia/what-is-dementia/types-of-dementia/vascular-dementia (2022)                         

Alzheimer’s Disease: https://www.alz.org/media/Documents/alzheimers-facts-and-figures.pdf (2022)    

Parkinson’s Disease: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7347582/ (2020) Multiple Sclerosis: https://www.nationalmssociety.org/About-the-Society/News/Updated-Atlas-of-MS-Shows-Over-2-8-million-People (2020)

Lewy Body Dementia: https://www.nia.nih.gov/health/what-lewy-body-dementia-causes-symptoms-and-treatments (2021)

Sohaib Nasim is an MPA/ID Candidate at the Harvard Kennedy School of Government.

For more information on this publication: Belfer Communications Office
For Academic Citation: Giani , Luca and Sohaib Nasim.The Funding Ecosystem for Neurodegenerative Disease.” Perspectives on Public Purpose, December 16, 2022, https://www.belfercenter.org/publication/funding-ecosystem-neurodegenerative-disease.

The Authors