Development of treatments for life-threatening illnesses are being put on the back burner because the startup companies the make these treatments can’t get available government grants. In 2003, the Small Business Administration (SBA) reversed a 20-year old policy by ruling that certain small companies (those with 51% venture capital investment) will no longer qualify for SBIR or Small Business Innovation Research, grants. These funds provide critical seed money to small businesses engaged in cutting edge, new projects, which includes biomedical research.
What this means is that small businesses would have to choose between venture capital funds or competing for specially designated government grants, when in likelihood, small businesses need both. Funding is critical because a new treatment can take 10 years or more and hundreds of millions of dollars to go from an idea to the hands of patients who need these medicines.
We are the people who are affected by this ruling. We are patient groups, biotech companies, and people hoping for cures or relief. We need Congress to pass the “Save America’s Biotechnology Innovate Research (SABIR) Act.” Read our stories and join our mission.
The Issue
Development of treatments for life-threatening illnesses are being put on the back burner because the startup companies the make these treatments can’t get available government grants. The Federal Government helps small businesses through the Small Business Innovation Research (SBIR) program, by setting aside a specific percentage of all federal R &D money for small business applicants.
The key requirements for eligibility are that the company must be at least 51 percent owned by United States citizens and that it may not have more than 500 employees. However, in 2003, the Small Business Administration (SBA) added another provision: that a small business not receive more that 51 percent of its funds from venture capital sources.
This is problematic for many of the creators of biomedical treatments and therapies for life threatening illnesses, because it can take more than 10 years and hundreds of millions of dollars to develop one new therapy, so these companies often rely on venture capital funding, if they are fortunate enough to get it. Because their funds have been unreasonably limited, much of the work on these products has been halted.
But it’s even worse for those who are depending on scientists to come up with a cure or relief from Parkinson’s, Alzheimer’s, different types of cancer, diabetes, cystic fibrosis, and a range of other diseases.
Funds that are earmarked for the research and development of these therapies are being denied to the small businesses that have ideas that are solid enough to be backed by private investors, i.e., venture capitalists. Instead government funds are awarded to weaker projects, which is clearly not the purpose of the SBIR program.
What You Can Do:
- Write to your member of Congress and ask her or him to support H.R. 4213
- Tell us your story – how will funding more cutting-edge biomedical research help you? email us and we can post it on this blog!
- Share this blog with friends and family
