BIO Urges Congress to Allow More Companies to Compete for SBIR Grants

More Competition Would Allow Funding of Better Science

WASHINGTON, D.C. (April 26, 2007) -- Dr. Gary McGarrity, Executive Vice President of Scientific and Clinical Affairs at VIRxSYS, testified today on behalf of the Biotechnology Industry Organization (BIO) before the House Science and Technology Subcommittee on Technology and Innovation regarding the reauthorization of the Small Business Innovation Research (SBIR) program.   McGarrity advocated for allowing small companies to compete for SBIR grants regardless of their capital structure.

For more than 20 years, small biotech companies were able to compete for SBIR grants until an arbitrary Small Business Administration interpretation of SBIR eligibility standards in 2003 effectively excluded many biotech companies from participating in the program.  Companies that are 51 percent owned by a group of venture capital firms are no longer eligible to compete for SBIR grants.

“Arguably, excluding companies from the SBIR program solely on the basis of their capital structure could benefit eligible companies like VIRxSYS,” McGarrity testified. “Yet it does so by making the program less competitive.”

“SBIR should be a competitive program that fulfills federal research and development needs while addressing a failure in the market system. It is not meant to repeatedly be a source of corporate welfare but instead should fund high quality research,” concluded McGarrity.

In his testimony, McGarrity quoted from a letter from Dr. Elias Zerhouni, Director of the National Institutes of Health (NIH), to Hector Barreto, former Administrator of SBA: “NIH believes that the current rule undermines the statutory purposes of the SBIR program… It undermines NIH’s ability to award SBIR funds to those applicants whom we believe are most likely to improve human health.”

“More competition results in better science, which leads to better life-enhancing and life-saving products.  In the end, patients win,” added Jim Greenwood, President and CEO of BIO.  “Congress should ensure that its intent is being carried out in the SBIR program.” 

Dr. McGarrity’s complete testimony can be found at

Dr. Zerhouni’s letter to former Administrator Barreto can be accessed at

About BIO

BIO represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and 31 other nations. BIO members are involved in the research and development of healthcare, agricultural, industrial and environmental biotechnology products.  BIO also produces the annual BIO International Convention, the global event for biotechnology.


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