Madam Chairwoman and Members of the Committee, I am Dr. Wendy
Baldwin, Deputy Director for Extramural Research at the National Institutes
of Health (NIH). On behalf of the Department of Health and Human
Services, I am pleased to testify before you today on the reauthorization of
the Small Business Technology Transfer Act of 1992, the enabling
legislation for the Small Business Technology Transfer (STTR) program.
Due to the size of our extramural budget, the NIH is the only principal
operating component within the Department that -participates in the STTR
program. In FY 96, the NIH awarded 109 STTR projects at a cost of $13.9
million.
Reports issued previously by the Small Business Administration (SBA) and
the General Accounting Office (GAO) indicate that the Department has
experienced the highest success rate among all Federal agencies in
commercializing the results of research conducted under the Small Business
Innovation Research (SBIR) program. We expect the STTR program to
achieve similar results as it matures into the 21 st century.
As you might be aware, the goals of the STTR program focus on bridging
the gap between performance of basic science and commercialization of
resulting innovations. The program accomplishes its mission by
stimulating and fostering scientific and technological innovation through
cooperative R&D; between small businesses and research institutions;
fostering technology transfer between small businesses and research
institutions-, and increasing private sector commercialization of innovations
derived from federal R&D.;
The SBIR and STTR programs fit within the broader range of scientific
programs and goals of NIH by contributing to the development of products
and methods useful in other research efforts. Such products and processes
have succeeded in increasing the productivity of other researchers and
decreasing the cost of specific areas of research. (Even those projects that
have not realized the goal of commercialization have achieved the equally
important purpose of contributing to the knowledge base of science through
professional publications.)
Let me describe a few SBIR programs that I feel exemplify the kind of
SBIR and STTR research that we see at the NIH. I would use STTR
vignettes, but the program is sufficiently new that we have not yet seen as
many success stories as we have in the SBIR program. The National
Human Genome Research Institute (NHGRI) has one of the smallest SBIR
programs at the NIH. Over the past five years NHGRI has funded an
average of nine projects per year, with a success rate equivalent to that for
their regular research project grants (R01s). At the NIH SBIR conference
that we held on our campus in January of this year, a staff member of the
NHGR1 described four successful grantees who had produced equipment
which either increased the productivity of other researchers, decreased the
cost of specific aspects of genetic research, or both. Not only NHGRI, but
the scientific community it serves, has benefited from these SBIR projects,
and one of the SBIR principal investigators now holds a $5 million regular
research project grant which grew out of his early SBIR work.
One of the largest SBIR programs at the NIH is that of the National Heart,
Lung, and Blood Institute (NHLBI). The projects of NBLBI illustrate that
SBIR/STTR applications address not only hypothesis-driven research but
also design-directed research, for development of both 2 products and
methods useful in further research efforts. One current NHLBI grantee is in
the final stages of commercializing a laser-welding system for
anastomosing arteries and veins. This researcher previously
commercialized two other products. The first, which was funded through
the National Institute of Dental Research, was a temperature-sensitive
screening device for detecting periodontal disease. The second, a non-invasive method for
detecting lead in the human skeleton, was supported by
the National Institute of Environmental Health Sciences. A second NHLBI
grantee developed a swallowable electrode used for cardiac monitoring.
These products have also contributed to the science and clinical knowledge
base, serving as a basis for other research projects and being cited in
multiple professional publications.
The largest SBIR program at the NIH resides at the National Cancer
Institute. This program is an integral part of the overall research mission of
the Institute and benefits portfolios that reach well beyond SBIR. This is
illustrated by an NCI grantee who developed a specific assay for detecting
telomerase activity in the diagnosis of and screening for certain
malignancies, including breast cancer. This enzyme plays an important role
in cell division; therefore, the detection of its activity has implications for
research in cellular development, cell death and aging. This project also
demonstrates the importance of close collaboration with other researchers
and with clinicians in developing and testing the product, and a great deal
of the work for these projects was performed as part of the Phase I activity.
The distinguishing feature of the STTR program is its partnering concept, in
which we not only
permit but encourage research that is initiated either by the scientist in the
small business or the
investigator in the research institution. (For the NTH, a "research
institution" most often means a college or university.) These scientists may
propose any collaborative research project of their choosing that capitalizes
on the ideas, talents, and capabilities of their organizations. When provided
with such opportunities, a for-profit company and a research institution are
most likely to propose research that they perceive to have the greatest
commercial viability, thus increasing the likelihood that the STTR project
will generate a product with potential for entering the marketplace,
Our policies under the STTR program mirror those of the SBIR program in
several important ways. First, applicant small business concerns are
allowed to revise and resubmit Phase I (feasibility studies) and Phase II
(research and development) applications twice. Often, although an
application may be promising, an applicant fails to provide sufficient details
on the research design in a Phase I application or the results of Phase I
when applying for the Phase II project. These are weaknesses that can be
remedied in a revised application.
Second, we provide multiple receipt dates for the submission of research
grant applications.
Rather than limit the small business community to a single opportunity each
year, the Department has three receipt dates annually. This means that if a
small business concern misses one deadline, it need wait only four months,
not a year, for the next submission date.
As a part of our continuing innovations in management, in 1996 the NTH
instituted a "Fast-Track" parallel review option designed to expedite the
decision and award of Phase II funding. Under this option, those who
satisfy the criteria may concurrently submit Phases I and II of the project,
thus passing through the peer review process at the same time with the
intent of reducing or eliminating the funding gap between phases. Initial
"Fast-Track" awards are being issued now. Information on SBIR and STTR
programs may be found on the NIH Small Business Opportunities
homepage at HTTP:/WWW.NIH.GOV/GRANTS/FUNDING/SBIR.HTM
on the World Wide Web.
We realize that the "Fast-Track" mechanism will not be appropriate for all
types of work or for all applicants. Our standard, non-"Fast-Track"
procedures allow Phase I grantees to submit Phase II applications -- on any
of our three annual SBIR and STTR receipt dates -- either during or after
expiration of the Phase I budget period to allow the grantee to minimize
the possibility of a funding gap.
The NIH was the first and is still among the few agencies that include
industry scientists, especially those from the small business community, on
its scientific review panels. It has always been our belief that participation
of scientists and technical experts from small companies brings a unique
dimension to and strengthens our peer review of applications. The
inclusion of these scientists helps review panels develop an appreciation for
the environment in which small firms must carry out research.
In conclusion, let me say that the Department is very pleased with its
involvement in the SBIR and the STTR programs. I would be happy to
answer any questions that you may have regarding our participation in
these programs.
