$500 Million NIH Program Included in Health Bill

April 1, 2010

Included in the President's health care reform bill (H.R. 3590) passed last month was a provision to create a Cures Acceleration Network (CAN) program in the National Institute of Health (NIH) with a primary function of awarding grants to biotech and pharmaceutical companies of up to $15 million apiece. The grants would be accessible to all companies, regardless of size or VC affiliation, but would be focused on “high need cures”, which are defined as products related to a disease or condition that NIH determines the commercial market can not produce adequately or timely. The program will be overseen by a 24-member board, which must include 4 representatives from VC companies. The total set-aside for this program for fiscal year 2010 is $500 million.

The NIH and the Biotechnology Industry Organization have been two of the most ardent supporters of the changes proposed by the House SBIR reauthorization bill. They have argued that the expensive and urgent nature of medical research requires that the size of SBIR awards be drastically increased, and that VC backed companies must be allowed unlimited access to the SBIR program.

The new CAN program seems to accomplish both those goals, without involving the SBIR program. Not only are grant sizes allowed to be as large as $15 million, but all companies are invited to participate. Considering that this program represents a new $500 million pot for NIH and VC-backed biotechnology firms to pursue, hopefully the need to dramatically alter the SBIR program to suit their needs has been eliminated.