Images
Image source: White House on Flickr.

Disaster has once again been averted. Despite going down to the wire (as it has with each and every spending bill or budget that needs to be finalized), Congress came together and, along with President Obama, passed a new spending and tax bill into law on Dec. 18.

The bill President Obama signed includes roughly $1.1 trillion in spending and approximately $622 billion in tax breaks. Businesses are going to be thrilled that a provision allowing them to depreciate newly purchased equipment more rapidly is now available through 2019, while consumers can rejoice that the earned income tax credit isn't going anywhere. 

This agency just received a big raise
However, there's perhaps an even bigger winner from the passage of this federal spending bill: the National Institutes of Health.

The National Institutes of Health, or NIH, is a government-funded medical research facility at the forefront of multiple aspects of patient care. It's comprised of 27 institutes and centers, including the National Cancer Institute, National Institute on Drug Abuse, and National Institute of Allergy and Infectious Diseases, to name a few. Each institute or center focuses on particular diseases or body systems to help improve our medical understanding and potentially even assist in the development of cures to chronic and/or terminal diseases.

Nci Vol
Image source: National Cancer Institute. 

According to details from the recently signed federal spending bill, the NIH received the maximum allowable increase in funding of $2 billion -- its largest increase in 12 years. Instead of the $30 billion it currently receives, the NIH will begin receiving $32 billion in federal funding in 2016.

Within the federal spending bill, a portion of the extra funding will be funneled toward specific goals. The bill gives $200 million to the Precision Medicine Initiative, which aims to improve the effort to find personalized treatment options for sick patients by targeting their genetic makeup. Another $350 million is to be spent on Alzheimer's research. The BRAIN initiative, which is an ongoing project to map the human brain, is earmarked to receive $85 million. Researchers will receive $303 million to further their efforts in the fight against antibiotic-resistant bacteria, and finally, $91 million is being set aside for research to examine how opioid abuse can be reduced. This is a nearly 300% increase from the amount set aside last year to analyze ways to reduce opioid abuse.

The end result is pretty clear: more money at the NIH's disposal could mean a better understanding of certain diseases and lead to more effective ways to combat them. Of course, we already have some intriguing therapies on pharmacy shelves, or working their way through clinical trials, in many of the aforementioned disease categories above.

A major advance in Alzheimer's in the offing
One of the biggest budgetary increases went to researching Alzheimer's disease -- and with good reason. Right now more than 5 million people in the U.S. have Alzheimer's disease, based on estimates from the Alzheimer's Association, but by 2050 almost 14 million people are expected to be living with some degree of Alzheimer's. It's also quite an expensive disease to treat. Between 2020 and 2040 the cost to treat Alzheimer's as a percentage of Medicare's annual budget is projected to rise from just 2% to as much as 24%.

G

Image source: Alzheimer's Association.

Thus, a lot could be riding on Biogen's (NASDAQ:BIIB) aducanumab, arguably its most important pipeline product. Aducanumab is being studied in two global phase 3 studies known as ENGAGE and EMERGE in early-stage Alzheimer's patients. In a phase 1b study, patients taking the 3 mg and 10 mg doses of aducanumab demonstrated a statistically significant improvement in the 30-point mental acuity test compared to the placebo. A statistically significant improvement over the placebo was also seen in the 10 mg dose cohort in the 18-pointClinical Dementia Rating. The 3 mg cohort did not reach statistical significance over the placebo.

We've witnessed a lot of promising early-stage Alzheimer's compounds fizzle out in late-stage studies, but the results from Biogen's phase 1b study were so demonstrably strong that there's certainly some buzz that aducanumab could be a major step forward in Alzheimer's disease treatment.

Explosive growth in personalized treatments
The $200 million earmarked to examine the ways a patient's genetic makeup can be used to help treat certain diseases is a great move -- but it's also a move that's been under way for years with drug and device developers.

Opdivo

Image source: Bristol-Myers Squibb.

For instance, some drug developers are using certain biomarkers as targets for their cancer drugs. Merck (NYSE:MRK) and Bristol-Myers Squibb (NYSE:BMY) have each developed a cancer immunotherapy drug -- Keytruda for Merck, Opdivo for Bristol-Myers -- that works by subduing the immunosuppressant quality of cancer cells and exposing them to the patient's immune system. Specifically, Merck's Keytruda and Bristol-Myers' Opdivo have shown the most promise in tumors expressing PD-L1. This biomarker often yields average response rates of 50%-60% in advanced non-small cell lung cancer patients, which is substantially higher than the average response rate for prior standards of care for advanced NSCLC.

Myriad Genetics' (NASDAQ:MYGN) BracAnalysis tests are another prime example of how personalized medicine has already arrived. Myriad's BracAnalysis test analyzes whether or not a woman is a carrier of the mutant BRCA1 or BRCA2 gene. A carrier of these mutations is considered to be at a far higher risk than a non-carrier to develop breast or ovarian cancer. A positive test of this gene mutation is what prompted Hollywood actress Angelina Jolie to undergo a preventative mastectomy. Jolie also had her ovaries and fallopian tubes removed in a separate surgery after tests showed she had markers that may have represented signs of early cancer. Jolie's mother, grandmother, and aunt have all died from cancer.

Tests like Myriad Genetics' BracAnalysis could very well become the norm as the push to personalize treatment pathways gains traction.

Collaborations galore?
The increased funding could also mean that drug developers could be privy to fully sponsored, or partially sponsored, trials, as well as collaborative efforts between drug developers and NIH researchers.

A good example here is the formation of the Accelerating Medicines Partnership (AMP) in 2014 between the NIH, Food and Drug Administration, and 10 drug developers, including Bristol-Myers Squibb, Merck, Biogen, and seven other industry giants. With the assistance of multiple non-profit organizations, these AMP partners work toward identifying biomarkers that could allow more effective treatment options to emerge. Best of all, all AMP partners are making their discovery findings public for the entire medical community to see (and presumably target).

Personally, I'm pleased to see the NIH receiving such a large increase in its annual budget, and I fully expect we'll begin to see the fruits of this budgetary increase in the not-so-distant future.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool recommends Biogen. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.