Background
Estimating the rate of return (RoR) from public investment in biomedical and health research
A conceptual framework for estimating GDP gains
Existing empirical estimates
Paper structure
Methods
Estimating the relationship between public and private R&D expenditures in the UK
Targeted policy and literature reviews
Developing R&D investment time series
Field | Medical Research Council | HRCS a
| Thomson Reuters JSC b
|
---|---|---|---|
Blood | Blood: red cells (erythrocytes); white cells and reticuloendothelial system (including bone-marrow); platelets and coagulation (thrombosis); serum proteins (antibody, etc.); and inflammatory systems (allergy, histamine, oxytocin, vasoactive agents) | Blood: Diseases caused by pathogens, acquired immune deficiency syndrome, sexually transmitted infections, and studies of infection and infectious agents | Haematology covers resources that deal with blood and blood-forming tissues, as well as the functions, diseases, and treatments of these systems. Topics included are haemophilia, neoplastic disorders of the blood or lymphoid tissues, and mechanisms and disorders of thrombosis |
Cancer | Cancer: Carcinogenesis (chemical and physical substances, ionising radiation, asbestos, mutagens, occupational medicine); incidence/epidemiology; detection/diagnosis, tumour biology, radiotherapy (radiobiology, adjuvants); chemotherapy (drugs, therapeutics techniques – side effects); and immunotherapy (immunotherapy) | Cancer: All types of cancers (includes leukaemia) | Oncology covers resources on the mechanisms, causes, and treatments of cancer including environmental and genetic risk factors, and cellular and molecular carcinogenesis. Aspects of clinical oncology covered include surgical, radiological, chemical, and palliative care; this category is also concerned with resources on cancers of specific systems and organs |
Cardiovascular | Cardiovascular: heart (electrophysiology); veins (vasoactive agents); arteries (cerebrovascular, arteriosclerosis, vasoactive agents); lymphatics (white cells); hormonal and metabolic systems (metabolism, electrolytes, hormones, oxytocin, steroids, vasoactive agents) | Cardiovascular c: Coronary heart disease, diseases of the vasculature and circulation system including the lymphatic system, and normal development and function of the cardiovascular system | Cardiac and Cardiovascular Systems covers resources dealing with the diagnosis and treatment of heart disease; coverage focuses on cardiac disease prevention, pharmacology, surgery, transplantation, and research. This category also includes cardiac testing, pacemakers, and medical devices. Resources focusing on circulation, hypertension, arterial disease, and stroke are placed in the peripheral vascular disease category |
Central Nervous System | Central Nervous System: Mental health and mental disorders; electro-physiology; epilepsy, head, Huntington’s chorea, migraine, multiple sclerosis, rabies, and transmitters | Neurological d: Dementias, transmissible spongiform encephalopathies, Parkinson’s disease, neurodegenerative diseases, Alzheimer’s disease, epilepsy, multiple sclerosis and studies of the normal brain and nervous system | Neurosciences covers resources on all areas of basic research on the brain, neural physiology, and function in health and disease. The areas of focus include neurotransmitters, neuropeptides, neurochemistry, neural development, and neural behaviour. Coverage also includes resources in neuro-endocrine and neuro-immune systems, somatosensory system, motor system and sensory motor integration, autonomic system as well as diseases of the nervous system |
Gastroenterology | Gastrointestinal: Mouth and pharynx (salivary gland, tonsils and adenoids); oesophagus and stomach (foodstuffs (hazards and constituents)); small intestine (coeliac disease); colon and rectum (incontinence); hepatobiliary system (metabolism – lipids, hepatitis), and exocrine pancreas (cystic fibrosis) | Oral and Gastrointestinal: Inflammatory bowel disease, Crohn’s disease, diseases of the mouth, teeth, oesophagus, digestive system including liver and colon, and normal oral and gastrointestinal development and function | Gastroenterology and Hepatology covers resources on the anatomy, physiology, biochemistry, and pathology of the digestive system. This category includes specific resources on the prognosis and treatment of digestive diseases, stomach ulcers, metabolic, genetic, infectious and chemically induced diseases of the liver, colitis, diseases of the pancreas and diseases of the rectum |
Infection | Infections: Viral and mycoplasmal (phage and virus, common cold, cross-infection, hepatitis, herpes, influenza, interferon, measles, poliomyelitis, rabies, rubella); bacterial and rickettsial (bacterial cells, antibiotics, cross-infection, drug resistance, venereal diseases, whooping cough); mycobacterial, fungal leprosy, tropical and overseas, tuberculosis); yeast, protozoal (malaria, tropical and overseas, vectors); Helminth diseases (molluscs, tropical and overseas, vectors) | Infection: Diseases caused by pathogens, acquired immune deficiency syndrome, sexually transmitted infections, and studies of infection and infectious agents | Infectious Diseases covers resources on all aspects of the pathogenesis of clinically significant viral or bacterial diseases including HIV, AIDS, sexually transmitted diseases; this category is also concerned with resources on host-pathogen interactions, as well as the prevention, diagnosis, treatment, and epidemiology of infectious disease |
Respiratory | Respiratory: Upper respiratory tract (including epiglottis and larynx) (common cold, influenza); airways and lungs (allergy, asbestos, asthma, bronchitis, pneumoconiosis, tuberculosis, whooping cough) | Respiratory: Asthma, chronic obstructive pulmonary disease, respiratory diseases, and normal development and function of the respiratory system | Respiratory System covers resources on all aspects of respiratory and lung diseases, including their relation to cardiovascular and thoracic surgery and diseases |
Skin | Skin: Allergy, leprosy, psoriasis, and venereal diseases | Skin: Dermatological conditions and normal skin development and function | Dermatology covers resources on the anatomy, physiology, and pathology of the skin. It contains resources on investigative and experimental dermatology, contact dermatitis, dermatologic surgery, dermatologic pathology, and dermatologic oncology; tis category also includes specific resources on burns, wounds and leprosy |
Vision | Vision: Electrophysiology, eye, retinitis pigmentosa | Eye: Diseases of the eye and normal eye development and function | Ophthalmology covers resources on the eye, its diseases, and refractive errors; coverage includes research on the cornea, retina, and eye diseases. This category also includes resources on physiological optics and optometry as well as reconstructive surgery |
Government expenditure on biomedical and health R&D in the UK, 1982–2012
Medical Research Council (MRC)
Department of Health (DH)
Funding councils
Charitable expenditure on biomedical and health R&D in the UK, 1982–2012
Wellcome Trust
Association of Medical Research Charities (AMRC)
Private expenditure on biomedical and health R&D in the UK, 1982–2012
Global pharmaceutical sales
Therapy area | ATC 1 and ATC2 level |
---|---|
Gastroenterology | A |
Blood | B |
Cardiovascular | C |
Skin | D |
Cancer | L01; L02a
|
Central Nervous System | N03; N04; N05; N06; N07b
|
Infection | J, Pc
|
Respiratory | R |
Vision | S01d
|
Key informant interviews
VECM specification
Variables
Model
Model search
Best model
Sensitivity analysis
Prediction by the impulse response function
Results
The relationship between public and private R&D expenditures in the UK
Observations arising from the literature review and key informant interviews
Government, charity and private biomedical and health R&D expenditure in the UK, 1982-2012
Total UK R&D expenditures (public and private)
UK R&D expenditures by disease areas (public and private)
Global pharmaceutical sales
Econometric modelling
Variables
Determining the best-fit model
Results from the best-fit model
Cointegration equation | Cointegration equation 1
| ||
---|---|---|---|
Lnprivate (−1) | 1 | ||
Lnpublic (−1) | −0.81 | ||
(0.14) | |||
[−5.81] | |||
Lnsale (−1) | 0.12 | ||
(0.20) | |||
[0.63] | |||
Intercept | −2.55 | ||
Error correction | D(lnprivate) | D(lnpublic) | D(lnsale) |
Cointegration equation 1
| −0.10 | 0.02 | −0.00 |
(0.03) | (0.01) | (0.01) | |
[−3.58] | [2.70] | [−0.49] | |
D(lnprivate(−1)) | −0.20 | −0.02 | 0.01 |
(0.06) | (0.01) | (0.01) | |
[−3.45] | [−1.72] | [0.87] | |
D(lnpublic(−1)) | 0.29 | 0.04 | −0.01 |
(0.27) | (0.06) | (0.06) | |
[1.08] | [0.67] | [−0.16] | |
D(lnsale(−1)) | 0.28 | 0.07 | 0.15 |
(0.26) | (0.06) | (0.06) | |
[1.10] | [1.09] | [2.52] | |
Intercept | 0.05 | 0.04 | 0.06 |
(0.03) | (0.01) | (0.01) | |
[1.71] | [6.22] | [7.72] | |
R2
| 0.12 | 0.04 | 0.03 |
Adj. R2
| 0.10 | 0.02 | 0.01 |
Sum sq. resids | 27.52 | 1.57 | 1.56 |
SE equation | 0.34 | 0.08 | 0.08 |
F-statistic | 8.00 | 2.57 | 1.87 |
Log likelihood | −78.92 | 279.44 | 280.00 |
IC | 0.67 | −2.20 | −2.20 |
Schwarz SC | 0.74 | −2.13 | −2.13 |
Mean dependent | 0.07 | 0.05 | 0.07 |
SD dependent | 0.35 | 0.08 | 0.08 |
Determinant resid covariance (dof adj.) | 4.48 × 10–06
| ||
Determinant resid covariance | 4.22 × 10–06
| ||
Log likelihood | 482.77 | ||
Akaike information criterion | −3.72 | ||
Schwarz criterion | −3.46 |
Cointegration equation | Cointegration equation 1
| |||
---|---|---|---|---|
Lnprivate (−1) | 1 | |||
Lngoverment (−1) | −0.66 | |||
(0.18) | ||||
[−3.57] | ||||
Lncharity (−1) | −0.21 | |||
(0.09) | ||||
[−2.36] | ||||
Lnsale (−1) | 0.16 | |||
(0.21) | ||||
[0.75] | ||||
Intercept | −3.34 | |||
Error Correction | D(Lnprivate) | D(Lngoverment) | D(Lncharity) | D(Lnsale) |
Cointegration equation 1
| −0.08 | 0.01 | 0.14 | −0.00 |
(0.03) | (0.01) | (0.05) | (0.01) | |
[−2.99] | [1.63] | [3.08] | [−0.47] | |
D(lnprivate(−1)) | −0.20 | −0.01 | −0.21 | 0.01 |
(0.06) | (0.01) | (0.10) | (0.01) | |
[−3.38] | [−0.74] | [−2.00] | [1.05] | |
D(lngoverment(−1)) | 0.10 | −0.16 | −0.04 | −0.08 |
(0.30) | (0.07) | (0.52) | (0.07) | |
[0.34] | [−2.45] | [−0.07] | [−1.17] | |
D(lncharity(−1)) | −0.01 | −0.00 | −0.11 | 0.01 |
(0.04) | (0.01) | (0.06) | (0.01) | |
[−0.34] | [−0.12] | [−1.82] | [1.60] | |
D(lnsale(−1)) | 0.30 | 0.02 | 0.18 | 0.16 |
(0.26) | (0.06) | (0.44) | (0.06) | |
[1.16] | [0.40] | [0.40] | [2.55] | |
Intercept | 0.06 | 0.04 | 0.15 | 0.06 |
(0.03) | (0.01) | (0.05) | (0.01) | |
[2.10] | [5.91] | [3.05] | [7.98] | |
R2
| 0.10 | 0.04 | 0.06 | 0.05 |
Adj. R2
| 0.08 | 0.02 | 0.04 | 0.03 |
Sum sq. resids | 27.97 | 1.30 | 81.67 | 1.53 |
SE equation | 0.34 | 0.07 | 0.58 | 0.08 |
F-statistic | 5.49 | 1.82 | 2.95 | 2.30 |
Log likelihood | −80.96 | 302.94 | −214.88 | 281.99 |
Akaike information criterion | 0.70 | −2.38 | 1.77 | −2.21 |
Schwarz SC | 0.78 | −2.29 | 1.85 | −2.12 |
Mean dependent | 0.07 | 0.03 | 0.14 | 0.07 |
SD dependent | 0.35 | 0.07 | 0.59 | 0.08 |
Determinant resid covariance (dof adj.) | 1.23 × 10–06
| |||
Determinant resid covariance | 1.12 × 10–06
| |||
Log likelihood | 294.17 | |||
Akaike information criterion | −2.13 | |||
Schwarz criterion | −1.73 |
Impulse response function
Discussion
Limitations of the study
Comparison with previous work
Geographical scope
Interpreting our findings
Future research
Conclusion
Box 1: An overview of the modelling approach
-
The econometric model is designed to capture salient features of the relationship that exists between various time series and is only as good as the data that are used and relies on the abstraction of the underlying phenomenon under study.
-
Vector autoregression (VAR) is a commonly used approach for describing the evolution of multiple time series data.
-
A vector error correction model (VECM) is a restricted form of VAR model that is appropriate when non-stationary time series data are found to have one or more cointegration relationship(s):
-
O
A non-stationary time series is one where the mean and variance are not constant over time; -
O
If a combination of two or more non-stationary time series is stationary, then those series are said to have a cointegration relationship.
-
-
A VECM provides estimates for the short-run dynamics and the long-run relationships between variables (cointegration).