Funding Policies Distort Science

Capital shuns risk .  —— The essence of science is exploration of the unknown.

Science and Capitalism is not exactly a match made in heaven.  Government and foundation funding has always been behind the curve of innovation, but the recent contraction in US science funding has engendered an unprecedented intensity of competition.  This has translated into a disastrous attitude of risk aversion.  A “hard-headed” business model prevails at the funding agencies, and they are now funding only those projects that they deem “most likely to succeed.”

The difference between science and engineering is that scientific research starts without understanding and tries out various hypotheses until one seems to work; while an engineer works with a paradigm that she knows to be reliable enough to be a basis for results of her innovations in advance.

A high failure rate is inseparable from good science.  But NSF prefers to fund low-risk work, which is really engineering.  


One irony is that capitalism is pretty good at allocating funds for engineering.  Once the science is well developed, the marketplace isn’t a bad model for deciding where to invest engineering resources.  We probably don’t need NSF to fund the “D” half of “R&D”.  But the reason that we need NSF (and NIH and NIA) as public funding institutions is that the rewards of science are difficult to predict.  I venture to propose Mitteldorf’s Law of Experimentation:

The more unpredictable the result, the more important the experiment.


Perverse Incentives and the Law of Unintended Consequences

Government funding pays a minor portion of each contract for salaries, equipment, and operating expenses.  The major portion is called “overhead”, and it goes back to the university (or other institution, some of them for-profit) that houses the research.  The proportion allocated to overhead “ranges from 20% to 85% at universities, and has an even wider spread at hospitals and non-profit research institutes.” [from a 2014 article in Nature; also, background and recent news here]

At a prominent midwestern medical school where I was visiting last week, my host had just received word of renewed funding for his research, breathed a sigh of relief.  For the first time in many months, he was able to put grant-writing in the background and devote his attention to the substance of his research.

There were cranes and bulldozers and signs of new construction everywhere.  It looks like healthy expansion in the health sciences.  But the reality beneath the surface is that the existing buildings were less than 70% occupied.  Why was the university building more space when they couldn’t fill the space they had?  Because the “overhead multiplier” is negotiated with NIH for the university as a whole, and has enormous consequences, dwarfing the cost of any one building.  This university had an overhead rate of 53% and the new construction was part of a push to justify raising it to 54%.  If they succeed, the University will be a little richer, and each of their research scientists will be a little poorer.


Pharmaceutical Companies are the Worst Case

Private companies are motivated to research the drugs that can be sold most profitably, not the ones that can provide the most good to the public at the least cost.  So there are orphaned drugs and there are untested nutraceuticals that are unpatentable and therefore unprofitable, but may be safer and more effective than the patented drugs—how will we know?  This represents a huge distortion of spending priorities, a sacrifice of health to profit.

There is a well-documented tendency of pharmaceutical companies to research small tweaks to their competitors’ successful drugs, rather than strike out in new areas with new ideas.  The former has a lower risk, and if the program is successful, the company can take over an entire profitable market from a competitor, with a drug that is only marginally better.  And even if the new drug is not even marginally better, frequently the company finds a way

The system that we have provides that pharmaceutical companies are responsible for testing their patented products for safety and efficacy.  This is an invitation to corruption.  In Phase III trials, a company has already invested so much in their product that if the trial results are negative then the company is on the hook for hundreds of millions of dollars.  It is too much to ask scientists to be objective under these conditions.  How can they make unbiased judgments about the message of their data, let alone design experiments and tests and criteria, when their funding and their boss’s funding depends on a favorable result.  Does anyone believe that scientific data reported under such circumstances can be reliable?  Among the horror stories of fraud and suppressed data in the pharmaceutical industry, antidepressants top the list because criteria are subjective and markets are huge.  In addition to antidepressants, many of the drugs on this list are psychiatric drugs that have been promoted “off-label” for depression because this expands their potential market.

Pain medications are sold in a shadow street market.  Arthritis drugs have been promoted despite the dangers they pose for cardiovascular damage.

Abuse of antibiotics and the unfolding global crisis of antibiotic-resistant bacteria is too big a topic even to summarize.

The right way to fund pharmaceutical research is through university grants to target high-priority specific diseases, including aging.  All patents accruing from this work should be placed in the public domain, and pharmaceutical companies can compete at what they do best, which is devising inexpensive ways to manufacture and distribute known chemicals.


Positive directions

The best prospects for future scientific breakthroughs lie in the direction of things that we already  know but don’t understand–things that don’t make sense.  Most of these will turn out to be mistakes in experimental technique or interpretation; but there are some that have such broad corroboration from diverse laboratories that this is unlikely.  I have a personal passion for collecting stories of scientific results that defy theory, and a portion of my research and reading time is always devoted to looking for neglected or fringe science that just might lead someplace new and interesting.

Within the field of aging research, readers of these pages already know that my dark horse favorites are telomerase, decoding the language of epigenetic programming, identifying the relevant blood factors from parabiosis experiments, and replication of promising Russian experiments with epithalon and other short peptides.  Here are a few topics that have piqued my interest from further afield in biology.

  • Cell phones and cancer.  I don’t know whether the risk from RF radiation is small or large, but I do know that it ought to be zero from everything we know about biology and physics.  Interactions between RF radiation and biological systems took the entire scientific community by surprise, and whatever the mechanism turns out to be, it is likely to open doors into new fields of research.
  • Animal navigation.  From salmon to monarchs, from whales to homing pigeons, the means by which animals know where they are and where they want to be are just beginning to be elucidated.  Some are amazingly reliable.  Surprising uses of quantum physics by plants and animals have already been a fruit of this research.
  • Perhaps related is (presumed) epigenetic inheritance of acquired cognitive information.  Knowledge (as far as we know) is coded in synapses in the brain. How can it be transmitted in DNA?  The case of monarch butterflies “remembering” the tree 2000 miles away where their great great great great grandmother overwintered is a well-known example.  Less known is this article on metamorphosis and learning from PLoS One.
  • Anomalous cures.  For every “incurable” disease, there is some small percentage of people who manage to cure themselves.  These cases are ignored by most medical scientists because they don’t fit the model of statistical evidence and “one disease ⇒ one cure” that predominates in the community.  But perhaps we can learn some basic biology from studying them.
  • Lamarckian inheritance.  Darwin believed that the individual traits of your offspring depend on your activities as well as your genes.  “Use and disuse” was his term.  But for 100 years since August Weismann, bedrock evolutionary science tells us that the genes you inherit are the genes you pass on, with only purely random mutations.  In recent decades, there are exceptions to this law.  One is epigenetic inheritance, through which your life experience can affect your children and grandchildren and perhaps great grandchildren through their inherited gene expression.  The other is what James Shapiro calls natural genetic engineering.  He has documented the ability of bacteria to alter their genes in response to stress, and in a way that responds explicitly to the kind of stress that is experienced.  Is anyone looking to see if higher organisms can do this, too?


I could go further…

I could say that “professional scientist” is already a oxymoron.  Scientists work best when they are driven by curiosity and a passion to find out, when they are doing what they love.  How can that be consistent with centralized decision-making and bureaucratic control of research priorities?  If we pay a scientist to do science, we should not make the payment contingent on studying anything in particular.

No one in a government bureaucracy has the wisdom to predict next year’s breakthroughs, or to single out the scientists most likely to achieve them.

Since 1996, I have pursued the science of aging without funding or support or a university appointment.  (Every year or two, I ask a colleague to arrange for an unpaid “courtesy appointment” so that I can have a university affiliation behind my name when I submit papers for peer review.)  Some of my closest friends are at universities, with large research staffs and successful careers.  I envy their daily contact with colleagues, access to seminars, and (aboe all) the opportunity to mentor and supervise the next generation of researchers.  They tell me I am lucky to avoid grantwriting, faculty meetings and academic politics.  Most of my academic friends and colleagues have paid for their success with their health in one way or another.  I am privileged to manage my time so as to make self-care a priority–nutrition, exercise, meditation, and sleep.

In the late 1970s, when I was a low-level researcher at a government contract research house on Route 128, we always worked one year ahead of our funding.  By the time a proposal was written, we had worked out the science in sufficient detail that we knew the results.  If the proposal was funded, we would use the proceeds to support us while we worked on next year’s proposal.

We may be outraged at 70% overhead rates for administration, and think of this as “slush money” that is ripe for abuse.  I agree that bureaucrats receive too big a share of the pie, and scientists too little.  But there is some portion of the overhead money that finds its way back through departments to the researchers themselves, and offers them some slack between contracts, their only real freedom to think and to innovate.

I asked my collaborator at Prominent Midwestern U whether he had funding for the exploratory, groundbreaking work on population dynamics that he was doing with me, but I already knew the answer.  He was doing it with soft funding for a follow-on to previously successful research.  He had prudently kept the funders in the dark about this specific project.  There’s plenty of time to tell them about it if we succeed.

17 thoughts on “Funding Policies Distort Science

  1. You are certainly correct about the lack of funding leading to less science, less discovery and a drive towards easy-to-achieve goals with almost certain results. This is a formula that assures that science will have less and less to say about the future. When we understand that every dollar put into research has yielded way more than that we have to ask ourselves why we are not putting more into research rather than less? Sadly, for many science has become a low-paying job and scientists are more interested in making a living than in what brought them to science to begin with. To tell those people that they made a poor choice in choosing science as a profession would be wrong; society has made a poor choice in not funding them.

  2. The conclusions you reach, which I fully agree with, leads me to think that science based on support by rich patrons which prevailed in the past is still the most effective method of funding? Are we not seeing an up-tick in money from these types of sources? Josh can you speak to this?


    Kevin Brown

    • I don’t know, Kevin. I don’t know anyone who is privately funded to do science. I do have a friend who has had a 7-digit budget to create about art deco steam irons.

      I take it back – Vladimir Skulachev’s research on SkQ is funded by a wealthy patron in Moscow. I’m not sure that counts, in that he is bringing SkQ to market, and the innovative part of the research was done years ago.

      Can you give me an example of some research that is privately funded when it couldn’t get funding through government or foundations?

  3. Really good article that highlights the appalling situation in research. I have circulated this in various longevity and transhuman circles. Thank you once again for cutting to the chase and putting things into plain perspective. Dr Katcher’s post above also accurately describes the situation.

    I see no other option that science will have to be funded by the grassroots community and private enterprise, there is no way the funding is coming anytime soon from the NIH etc… There are people in the government who share our views about aging and they probably share our frustration too. No the only way to progress is going to be via private enterprise.

  4. excellent article! This is a situation which frustrates me greatly. Are there countries that follow a better model for scientific research?

  5. If we ran the computer industry the way we run medical biotech, we would still be using vacuum tubes.

    Your criticism of the current incentives for drug companies are spot on. We could leap ahead as fast as the software industry if we remove the FDA’s role as gatekeeper. It is the FDA that stops innovation, and maintains profits for the obsolete… it’s called “regulatory capture”, and it happens in every industry where we allow government to prevent competition.

    • I’m not so sure that capitalist competition is the answer, or that the computer industry is the paragon of productive innovation to be held up as a model.

      Have you noticed that software doesn’t work the way it did 5 years ago? If you press a button that says {Download File} or {Complete Transaction}, you no longer expect that a file will be downloaded or a transaction completed. Everything is buggy because there are so many different programs and environments, and it’s just too expensive to test that my new software works with all of them.

      It’s a lot like pharmaceuticals, which are tested in some people with some drug interactions, and then they are taken by many more people with many more conditions and interactions.

      Now imagine what would happen if drugs were as unreliable and likely to fail or to have unintended consequences as software…actually, you don’t have to imagine, because that’s the way it is. There is an epidemic of people being killed by drugs and hospital procedures.

      • Exactly, that’s the way it is now…. except that as you say, there is a huge bias toward drugs with existing patents (and toward not changing the “story” behind the supposed mechanisms of said drugs).

        If there were competing drug-rating consumer organizations, it would be harder for them to be captured… and none of them would have the ability to tell terminally ill patients that it was illegal to try treatments that MIGHT work.

        We need to set up systems where we work toward becoming “less wrong”. Trying to jump to perfection in one step, using top-down centralized control, has never worked.

  6. Good points in the article – I am a supporter of increased spending through all the avenues of research funding: government, private for-profit & not-for-profit. Whatever a society wants more of, at the end of the day society has to direct more money towards. And that includes decisions like whether more funding flows to risk adverse projects or radical but high chance of failure projects.

    One point I would argue though is the me-too drug point. I was skeptical of this strategy of the drug makers, like whether it was really a good use of resources. But over the years I have seen people trying drugs that are in the same class of medicines, thought to work on the same mechanisms – and yet one of the drugs will come with a bunch of side effects for one person, while a me-too drug will give the same benefits with far less side effects. (or the side effects are advantages to different people, like a stimulating side effect for one drug in the class of drugs, for a person with low energy is beneficial – while for a person struggling with insomnia the same side effect would be a major problem).

    When doctors find a drug is working for a person, but where side effects are problematic, they prescribe other drugs in the class to see how the person’s body responds.

  7. Really enjoyed the surprising turn from the depressing state of affairs to the wonders of the discoveries that still lie ahead.

    Sad but true, the human being shall continue to suffer and die to the proportion of their arrogance.

  8. Funding aging is a good example too. To essentially erradicate degenerative diseases it is necessary to decrease aging rate. Such manipulation will decrease the incidence of all the degenerative diseases just at a single stroke, and will enormously increase the number of “young years” free of degenerative disease. Instead, funding agencies prefer to invest most of their money attacking the degenerative diseases themselves, and the result is that they are creating more old people instead of more young ones. So, although helping individuals to avoid death some years, the individuals live more years disabled and the economic and sanitary problem of aging increases instead of decreasing. This is because the CAUSE of the diseases is not attacked, only their consequences. It has been estimated that to solve the aging problem, NIH should dedicate around 3 billion to fund BASIC aging research, which is around, I was told, 10% of their total budget, so it is possible. But to do this they should either increase their total budget by 3 billion, or decrease the budget to attacking the diseases from around 30 billion to 27 billion (3% decrease). The problem seems to be one of scientific politics. There are too many interests in the specialized doctors related to each disease (oncologists, cardiologists, etcetera) as well as in the pharmaceutical industry. Anyway a Government who is wise enoguh should be able to overcome these corporative interest looking for a soluion for a FIRST DEGREE PROBLEM in any developed country: THE AGING PROBLEM. This is so important that governements should priorize solving this big problem over corporative interests.
    Sadly enough it seems that the biggest governmental agency worldwide, the NIH, is not ready to act in that directing and prefers to continue funding the mainly diseases dedicating still little resources to aging research itself.
    Due to this paralisys of the USA Government, some millionaires recently created a company dedicated to investigatic basic aging. This company is called Google-CALICO. It seems that 3 billion will be invested by these millionaires. If they invest, privately such huge amount of money, it is logical to think that they expect a return many times greater (30 billion, 300 billion?), how much I can not guess but clearly their expectations are huge. The problem is that when antigaing pills will be available, and due to my knowledge of basic biological aging (30 years of succesful research in this area) I can say that that pill will no doubt be obtained, the price of the pill will be too high because it will be protected by a patent.
    I would like that Governments, instead of private millionaires fund this urgently needed reasearch. Because I want this pill for EVERYBODY ON EARTH, not only for the wealthy ones. Its price should not be higher than a few cents. If we want to have a future as humans we should remember that only COMPASSION for our human brothers makes us human and elevates us above common animals. Selfishness will destroy the world no doubt. Only collaboration can save the human kind. I remind as an evolutionary (and laboratory) biologist that “COLLABORATION (LOVE) CREATED COMPLEXITY” (“Longevity and Evolution” Book, Gustavo Barja, NY, 2010, 2011 ebook).


    • Why not consider taking aging research to the public ? There is a relatively new site experiment similar to kickstarter <a href=" which is a crowdfunding platform for science. Most of the projects receive funding albeit it is a lot smaller amount of funding then grants, but that's mostly because they are not asking for large amounts. If a project is revelent enough like aging research it could get funded even at larger amounts. You could even put it on kickstarter itself under technology if your research is compelling enough it will most likely receive funding. Backers could get access to incremental results or even t-shirts. I myself would make a donate for even the remote chance to at the very least have an active healthy life during the later half of my life. The benefit here is that the general public is a lot less adverse to risk (at least in science) then federal funding agencies.

  9. I think that if we ever decline as a civilization, it will be a matter of our self inflicted problems dominating over us.

    We don’t spend on what really matters – scientific research is only one of the areas that we have failed to give the priority that it deserves. We ought to be spending like 10-20%, perhaps more of our entire society’s GDP on scientific research. It has one of the best “returns” to society for the money spent.

    Sadly it won’t happen. We’ve got our priorities all wrong as a species. That could be our downfall.

  10. This was recently posted by Reason at
    DRACO Illustrates the Poor Funding Situation for Radical Departures from the Existing Status Quo

    DRACO, double-stranded RNA activated caspase oligomerizer, is a broadly applicable antiviral technology that has been under development at a slow pace for quite some time now. You might recall some publicity back in 2011, for example, but that marked the results of years of earlier work. DRACO attacks infected cells, not the viruses themselves, following the principle of finding a common vulnerability to target rather than trying to tailor therapies to every different variety of attacker. Despite technology demonstrations to show effectiveness against a broad range of very different types of virus, and the fact that this technology can in principle be applied to near any type of virus, there is next to no ongoing funding for DRACO. It stands as an example of the fact that you can build a better mousetrap and still have the world ignore you. In this case DRACO is languishing despite grave conc! erns regarding spreading viral resistance to existing drugs, and billions devoted to constructing new drugs that are just more of the same.

    Advocacy and philanthropy are often the only ways forward for a new medical technology that is a radical departure from the present status quo… (read more)

  11. “The right way to fund pharmaceutical research is through university grants to target high-priority specific diseases, including aging. All patents accruing from this work should be placed in the public domain, and pharmaceutical companies can compete at what they do best, which is devising inexpensive ways to manufacture and distribute known chemicals.”

    I couldn’t agree more. I always thought this is the way to go. Anyway, it’s very difficult to chage this in the current lobbying/political framework in the US and the EU.

  12. I enjoy your articles, thanks for all your hard work.

    I was wondering what you think about the research or the science of ‘Global Warming’. There seems to be lots of reports about the use of fraud to prove it is true. In your new article you mention several times about the blundering of man and his effects on food sources, and though it is not the same, I was wondering if that was related somehow to a belief in man caused warming or whatever they are calling it now . Do you believe in the science about ‘Global Warming’ and do you think the purported facts about it are based on some frauds?

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