Changes in NIH Grant Rules Threaten to Ripple Through Eye Disease Research

Any changes to the rules that accompany US government research grants could affect eye research in the US in a big way.

The US government awards an average of $1.1 billion a year in grants to research eye disease and vision disorders. The funds in 2023 flowed to 43 states, along with the District of Columbia and Puerto Rico.

That is the latest year for which the National Institutes of Health has released detailed data on awarded grants.

Such funding “ends up paying off in spades,” said Srinivas Sadda, MD, president of the Association for Research in Vision and Ophthalmology, the world’s largest ophthalmic research organization.

Sadda spoke with Market Scope on the topic in early March.

Federal funding attracts foundation and corporate funding, he said. It produces discoveries that reduce suffering, reduces the cost of social services to support people who lost vision, and leads to the development of new commercial products.

Sadda said government funding pays for “foundational research” that uncovers how diseases develop; epidemiological research that shows the burden of disease; and clinical trials, particularly to investigate new uses for inexpensive old drugs, diet, or vitamins.

Foundational research is critical because it opens doors to advancements in disease treatments. Sadda, who is the director of Artificial Intelligence and Imaging Research at the UCLA-affiliated Doheny Eye Institute and has received many government grants over the years, said government money is vital for such research, because there is no other mechanism for funding it.

“Companies don’t want to invest in something without seeing a direct pathway to get to the market,” he said.

The discovery of endothelial growth factor in 1983 at Harvard Medical School, he said, is an example of government-funded foundational research that led to industry research that created treatments for retinal diseases. Today those treatments help millions of people a year preserve their vision.

The Age-Related Eye Disease Study (AREDS), which showed that a certain combination of vitamins and minerals could help prevent vision loss from age-related macular degeneration, is an example of a clinical trial that could not happen without government funding.

It was expensive, because it was big and lasted a long time, but the treatment consisted of cheap, commonly available ingredients, so there was no way for a company to make a financial return from it. The result, however, was an incredibly useful product for preventing vision loss.

“This is where federal funding is vital,” Sadda said.

Philanthropy and industry both play important roles, but they can’t replace government.

Philanthropies can fund early-stage research, but only to a small extent. Even then, they rely on the government to vet the research first. “They come in because they know it is being supported by the government,” Sadda said.

Industry mostly gets involved after research has identified a possibility for treatment, when it sees an opportunity for revenue to move a treatment to market.

Source: Market Scope analysis of NIH data

Source: Market Scope analysis of NIH data

Government laboratories, universities, foundations, and companies all benefit from federal grants to investigate eye disease and vision disorders. The biggest share of federal grant awards in 2023, $212 million, went to NIH employees. Most grants, however, totaling $847 million, went to universities. A total of 230 universities and university-affiliated institutions received grants. They ranged from one grant for $28.8 thousand to the University of the Incarnate Word in San Antonio, Texas, to 144 grants totaling $55.2 million to Harvard University and its affiliated hospitals in Boston, Massachusetts.

Nineteen foundations received a total of $37.5 million in grants. Sixty companies received grants totaling $47.5 million.

Sadda said much of the foundational research at universities will stop if they can’t pay for what are called “indirect costs.”

Direct costs pay for the specific expense incurred to do an experiment that a researcher proposes, but not the facility or equipment to do it—what industry calls “consumables.”

“In our submission, we have to describe what the institution has available as resources: lab space, equipment, etc., but the direct costs don’t pay for electricity, water, or maintenance of equipment,” Sadda said.

Thus, indirect costs will vary across experiments based on the sophistication of the space and equipment needed to conduct the experiment. A climate-controlled clean room costs more to maintain than an office and a desktop computer, for example.

Research at Doheny and many other institutions utilizes delicate, expensive equipment that requires careful maintenance.

“If you don’t have people to maintain it, it won’t last. That maintenance is far from waste,” Sadda said, adding, “These expenses are vital.”

The notion that if philanthropy doesn’t pay for indirect costs, such cost must not be a legitimate part of an experiment is mistaken, Sadda said, because philanthropy only tries to provide fuel to accelerate an experiment already built with government money. One should not mistake fuel to go farther as an indicator that you don’t need an engine to use it.

“Without money from government to maintain facilities and equipment, we will have to lay off most of our people, then we can’t do the research. Research will grind to a halt. There will be nowhere to use grants,” he said.

Outlook for Companies

The outlook is a little different for companies that get NIH grants. Most of the 60 companies that received NIH eye disease research grants in 2023 are startups. A grant can help plug a gap in private financing so that companies can continue to develop an innovative product, or it can legitimize their work and help attract private investment.

One company that has a model for using grants to develop treatments for eye diseases is Opus Genetics. Opus aims to develop gene therapies for rare, inherited eye diseases.

“In our view, if we can get [FDA] approval on clinical trial results from 20 to 30 patients, funding support from government and nonprofits, and commensurate gene therapy prices, we can get a good economic return,” CEO George McGrath told Market Scope in November 2024.

Questions about the availability of federal funds could force company leaders to get more creative regarding funding or more reliant on nonprofits. In a statement emailed to Market Scope, McGrath said: “Opus will continue to be opportunistic in seeking additional and diverse sources of funding to advance our programs, with an emphasis on nonprofit sources for non-dilutive funding this year.”

“The NIH made the US the center of medical research worldwide; the NEI made the US the center of eye research,” Sadda said. “If you don’t make vision research a priority, it is not going to happen.”