The Obama administration has become so concerned about the slowing pace of new drugs coming out of the pharmaceutical industry that officials have decided to start a billion-dollar government drug development center to help create medicines.

The new effort comes as many large drugmakers, unable to find enough new drugs, are paring back research. Promising discoveries in such illnesses as depression and Parkinson's that once would have led to clinical trials are instead going unexplored because companies have neither the will nor the resources to undertake the effort. Drug companies have typically spent twice as much on marketing as on research, a business model that is increasingly suspect.

The initial financing of the government's new drug center is small compared with the $45.8 billion that the industry estimates it invested in research in 2009. The cost of bringing a single drug to market can exceed $1 billion, according to some estimates.

Groundwork for drug firms

The National Institutes of Health has traditionally focused on basic research, such as describing the structure of proteins, leaving industry to create drugs using those compounds. But the drug industry's research productivity has been declining for 15 years, "and it certainly doesn't show any signs of turning upward," said Dr. Francis Collins, director of the institutes.

The job of the new center, to be called the National Center for Advancing Translational Sciences, is akin to that of a home seller who spruces up properties to attract buyers in a down market. In this case, the center will do as much research as it needs to do to attract drug company investment.

That means that in some cases, the center will use one of the institutes' four new robotic screeners to find chemicals that affect enzymes and might lead to the development of a drug or a cure. In other cases, the center might need to discover not only the right chemicals but also perform animal tests to ensure that they are safe and even start human trials to see whether they work. All of that has traditionally been done by drug companies, not the government.

"None of this is intended to be competitive with the private sector," Collins said. "The hope would be that any project that reaches the point of commercial appeal would be moved out of the academic support line and into the private sector."

Whether the government can succeed where private industry has failed is uncertain, officials say, but they say doing nothing is not an option.

The health and human services secretary, Kathleen Sebelius, sent a letter to Congress on Jan. 14 outlining the plan to open the new drug center by October — an unusually rapid turnaround for an idea first released with little fanfare in December.

Creating the center is a signature effort of Collins, who once directed the agency's Human Genome Project. Collins has been predicting for years that gene sequencing will lead to a vast array of new treatments, but years of effort and tens of billions of dollars in financing by drugmakers in gene-related research have largely been a bust.

As a result, industry has become far less willing to follow the latest genetic advances with expensive clinical trials. Rather than wait longer, Collins has decided the government can start the work itself.

"I am a little frustrated to see how many of the discoveries that do look as though they have therapeutic implications are waiting for the pharmaceutical industry to follow through with them," he said.

Catalyst for breakthroughs

Collins' ability to conceive and create such a center in a few short months would have been impossible for most of his predecessors, who had nice offices but little power. But Congress in recent years has invested real budgetary and administrative authority in the director's office, and Collins is the first director to fully use these new powers.

Under the plan, more than $700 million in research projects underway at various institutes and centers would be brought together at the new center. Officials hope the prospect of finding new drugs will lure Congress into increasing the center's financing well beyond $1 billion.

Hopes of new money may be optimistic. House Republicans have promised to cut the kind of discretionary domestic spending that supports the health institutes, and officials are already bracing for significant cuts this year.

But Collins has hinted that he is willing to cannibalize other parts of the health institutes to bring more resources to the new center.

"There are some people that would say this is not the time to do something bold and ambitious because the budget is so tight," he said. "But we would be irresponsible not to take advantage of scientific opportunity, even if it means tightening in other places."

For the plan to go into effect by October, the administration must by law get rid of one of the 27 centers and institutes already in existence at the NIH — something that has never been done before. So the administration plans to downgrade the National Center for Research Resources, in part by giving some of its functions to the new drug center.

Researchers and staff members connected to the research resources center have inundated a complaint blog about the coming change. Mark Lively, a professor of biochemistry at Wake Forest University and a member of an advisory council to the research resources center, said he could not understand why the administration was moving so quickly with its plans.

"And the NIH is not likely to be very good at drug discovery, so why are they doing this?" Lively asked.

But Garret FitzGerald, a professor of medicine and pharmacology at the University of Pennsylvania, said the new center could inspire universities to train a new generation of investigators.

"It could be a really good idea," he said.