Small Business Innovation Research (SBIR)

What is the SBIR Program?

The Small Business Innovation Research (SBIR) program was established by Congress in 1982 to help government meet research and development goals through investment in small businesses.  Currently, 11 Federal agencies, including the National Institutes of Health (NIH), set aside 2.5 percent of their extramural research and development budgets for the SBIR program.  As part of the SBIR reauthorization plan reached in December 2011, this percentage is set to increase by 0.1% for each year from FY 2014 to FY 2017, when it will be 3.2%.  The reauthorized SBIR also increases the total monetary amount of grants available to businesses from $100,000 to $150,000 for Phase I and from $750,000 to $1 million for Phase II.

The reauthorized SBIR also allows for up to 25% of NIH funds to be awarded to businesses that are majority-owned by multiple venture capital firms, hedge funds, or private equity firms.  Previously, the Small Business Administration (SBA), which has jurisdiction over the eligibility requirements for the SBIR program, ruled that in order for small companies to be eligible for SBIR grants, a majority of their overall funds may not come from venture capital sources.  PAN is supportive of this change because the drug development process is highly dependent on venture capital funding being invested in these small companies for early stage testing and development of potential therapies.  Without SBIR program support, other sources of funding for this kind of cutting-edge, patient-oriented research are difficult to obtain.

Why is the NIH SBIR Program Important?

PAN strongly supports the SBIR program as an important source of translational and clinical research funding at the NIH.  SBIR grants play a significant role in the drug development arena as they aim to move or “translate” promising basic research into real therapeutic possibilities for patients.  Often promising new therapies are lost between the basic discovery research being conducted at the NIH and the drug development stage funded by large pharmaceutical companies.  SBIR grants help move research along the drug development pipeline in an effort to advance potential new therapies for people living with Parkinson’s disease.