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Would an increase in the quantity of NIH SBIR awards impact their overall quality?

October 27, 2022
By: Conor Gowder

In a recent study titled Does NIH select the right healthcare ventures through the SBIR grant program?, researchers from Rutgers University and the University of Connecticut took advantage of the 2009 American Recovery and Reinvestment Act (ARRA) to conduct a natural experiment. The opportunity was available due to the National Institutes of Health (NIH) decision to use ARRA dollars to fund additional Phase I SBIR awards from general SBIR competitions, and the researchers compared these 19 ARRA-funded awards to the other 479 Phase I awards that were first funded in the same competitions with regular appropriations. The researchers found that for most observable metrics the 479 initial awardees performed at similar, or only slightly elevated, levels compared to the 19 ARRA-funded awards. These results indicate that an increase in NIH SBIR funding — or, as the authors argue, NIH deciding to fund more lower-scoring proposals — would not result in a decrease in award outcome quality.  

If this impact analysis holds true for current applicants and awardees, the results would argue for nearly doubling the current NIH SBIR Phase I portfolio. In 2009, when the authors found that expanding the pool did not have negative consequences, NIH Phase I applicants had a success rate of 22%. By 2021, that rate had decreased to just 12% — begging the question of what new, life-changing therapeutics could be developed if the program had the funding to make awards to more small businesses.

nih, sbir, funding