06 Jul Start-Ups say innovation doesn't grow on trees
Biotechnology start-ups have long relied on grants from the National Institutes of Health to fund the research-and-development process for new drugs, medical devices and disease treatments. Every year, the agency is required by law to set aside 2.8 percent of its research budget — $650 million in 2009 — for small businesses and the commercialization of technologies developed at universities.
But when nearly $10 billion in stimulus funds went to the NIH, a last-minute change in the legislation exempted the agency from the requirement. That means the NIH does not have an obligation to reserve a portion of the money to small businesses.
This has created a stir in the area’s biotech community. The companies say that without the requirement to set aside money for the Small Business Innovation Research program, they have a tougher time securing funding that could help them develop new products and survive the recession.
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