| National Institutes of Health
in the FY 2003 Budget
Kei Koizumi, AAAS
· The National Institutes of Health (NIH) would receive $27.3 billion for its total budget in FY 2003, an unprecedented increase of $3.7 billion (15.7 percent) that would fulfill the commitment to double the NIH budget between FY 1998 and 2003. NIH R&D would rise 16.0 percent to $26.5 billion (see Table II-9). This would follow 14 to 15 percent increases in each of the last four years.
· The big budget winner would be the National Institute of Allergy and Infectious Diseases (NIAID) which would receive a boost of 57.3 percent to $4.0 billion as NIH's lead institute for bioterrorism R&D and a key part of the Bush Administration's homeland security request. NIAID would introduce a new extramural facilities construction program to build bioterrorism research laboratories around the nation.
Introduction and Political Environment
The National Institutes of Health (NIH) is the second-largest supporter of R&D in the federal government, after the Department of Defense. In its mission to promote biomedical research and other fundamental inquiries that may lead to medical advances, it is by far the largest federal supporter of basic research, applied research, and R&D at colleges and universities, and has a disproportionate impact on support for the life sciences and related fields. Because of its support of research that offers the hope of breakthrough advances in the treatment of disease, NIH has long been popular both in Congress and with presidential administrations of both parties, and benefits from strong support not only in the scientific community but also from an extensive network of disease-oriented patient advocacy groups.
The FY 2003 budget request of $27.3 billion for NIH would be a $3.7 billion (or 15.7 percent) increase (see Table II-9). NIH classifies 97 percent of its budget as R&D, including R&D facilities. (The remainder is for overhead costs and research training.) Its FY 2003 R&D would total $26.5 billion, a 16.0 percent increase.
The proposed increase would follow increases of nearly 15 percent in each of the last four years. These large increases were intended by Congress to be the first four installments of a plan to double the NIH budget between FY 1998 and 2003. Although President Clinton never embraced the plan and never requested the roughly 15 percent increases needed each year to achieve this goal, President Bush made finishing the doubling effort a presidential campaign promise, and requested a nearly 14 percent increase last year, to which Congress added funds for an FY 2002 budget of $23.6 billion (including some emergency funds for counter-terrorism activities). In the FY 2003 budget, President Bush would provide the final installment of the doubling plan with a request of $27.3 billion, exactly double the $13.7 billion FY 1998 NIH budget.
With the end of the doubling plan nearly in sight, biomedical research advocates and NIH planners are already beginning to turn their attentions to what will happen to the budget in FY 2004 and beyond. The outyear projections in the President's budget call for NIH funding to stabilize somewhat at $27.9 billion in FY 2004 with only inflationary increases thereafter to $29.9 billion in FY 2007. In other words, after a $3.7 billion increase in one year (FY 2003) the NIH budget would increase only $2.5 billion spread out over the next four years, dropping from a 16 percent increase to a series of 2 percent increases. There are concerns, however, that because much of NIH's budget involves multi-year commitments of grant funding that the much-slower projected growth in future years will impede NIH's ability to offer new grants or shift funding to meet emerging research opportunities.
Congress will most likely match or exceed the President's request, as it has in past years. Because the FY 2003 request would distribute the large increase somewhat unevenly and would provide most institutes with increases between 8 and 9 percent, Congress may add even more money to the request if resources are available, to bring more research areas to double the FY 1998 funding level.
Despite its funding successes, NIH finds itself in an awkward legislative situation because its research activities touch on several controversial areas, including stem cell research and human cloning. Please see Chapter 2 for a discussion of these issues, which could have a large impact on NIH activities in the coming year.
Funding Request and Priorities
The majority of NIH's budget is distributed to external performers through Research Project Grants (RPGs), which are investigator initiated, peer reviewed, and competitively awarded (see Figure 1). (NIH funding by institute is found in Table II-9; its budget by funding mechanism is found in Table II-10.) RPG funding would increase by 9.9 percent in FY 2003 to reach $13.7 billion. These funds would support a record 35,920 RPGs, an increase of 1,408 awards over FY 2002 assuming the requested budget is approved (see Figure 2). Included in this total would be a record 9,854 new competing RPGs, 5.1 percent more than the number of new grants in FY 2002.
The success rate for grant applications would dip slightly to 30 percent from a high of 32 percent in FY 2001 (see Figure 2) because of a large expected increase in the number of applications, with expected success rates varying from 6 percent to 43 percent depending on the institute, each of which conduct their own grant solicitation processes. For successful applicants, there would be good news. The official 6.1 percent average increase for grants would overstate the real rate of growth for most grants because of unusually expensive bioterrorism-related grants that NIAID plans to award in FY 2003. But after adjustments, the average new grant would be 4 percent larger in FY 2003 than in FY 2002, a rate set to the projected increase in the NIH Biomedical Research and Development Price Index (BRDPI), a NIH-developed measure of inflation for biomedical research costs that tends to run slightly higher than the inflation rate for the economy as a whole. Continuing grants are expected to average a 3 percent cost increase in FY 2003.
Because of worries about future NIH budgets in FY 2004 and beyond, NIH would again propose to fund the entire cost of some multi-year grants in the FY 2003 budget rather than the normal year-by-year funding pattern, allowing for more budgetary flexibility in future years at the cost of reducing the number of grants awarded in FY 2003. Congress has traditionally resisted such proposals, however, and will likely favor awarding the maximum number of grants in FY 2003.
In addition to RPGs, NIH also distributes funds through Small Business Innovation and Research (SBIR) grants (RPGs awarded through a special competition for small and medium-sized businesses), competitively selected research centers, and a number of specialized research competitions. NIH also distributes about 10 percent of its budget ($2.6 billion in FY 2003) through R&D contracts (see Figure 1). NIH distributes approximately 85 percent of its budget to extramural performers; approximately 10 percent to intramural research, mostly at NIH's Bethesda, Maryland, campus; and the remaining 5 percent to management, administration costs, and intramural facilities. The majority of NIH's extramural support goes to colleges and universities; as a result, NIH is by far the largest federal supporter of R&D at colleges and universities with nearly two-thirds of the federal total. Because the federal government funds 58 percent of all R&D at colleges and universities, at most universities and colleges with medical schools NIH is the single largest funding source for R&D.
NIH classifies the majority of its budget as basic research, $14.4 billion out of $27.3 billion in FY 2003 (up 9.0 percent; see Table II-1). NIH is by far the largest federal supporter of basic research, and in FY 2003 would provide 56 percent of all federal support, a share that has been steadily increasing for decades. NIH is also the largest federal supporter of applied research, $11.2 billion out of its $27.3 billion budget in FY 2003 (42 percent of all federal support). NIH applied research would increase a tremendous 22.4 percent in FY 2003, primarily because much of the large NIAID increase would go to counter-bioterrorism R&D that is applied in nature. (For more on basic and applied research in the total federal budget, please see Chapter 3.)
NIH does not classify any of its work as development, and would fund $874 million in R&D facilities and capital equipment in FY 2003, a near-doubling of the FY 2002 funding level boost of 75.5 percent that would establish the agency as the third-largest funding source for R&D facilities behind the National Aeronautics and Space Administration (NASA; $2.4 billion) and the Department of Energy (DOE; $1.1 billion). The enormous increase in facilities funding would be due to expanded investments in bioterrorism-related construction both on the NIH campus and in extramural laboratories (see below).
The strong growth in the NIH budget would not be as evenly distributed as in previous years because of increased priority-setting in the FY 2003 budget and the identification of three high-priority needs for additional investment: bioterrorism, facilities construction, and cancer.
NIH has supported bioterrorism-related research for years, but its research portfolio became more vital following last fall's postal anthrax attacks. In the FY 2002 budget, Congress quickly rushed to provide funds to ramp up NIH's efforts. In the FY 2003 request, NIH would become the lead research agency in the burgeoning federal effort to combat bioterrorism in a profound shift from DOD's traditional lead role dating back to when concern over bioterrorism was focused on military troops rather than the U.S. civilian population. Within NIH's R&D portfolio, NIH has identified $1.7 billion for bioterrorism-related R&D and infrastructure in FY 2003, up substantially from only $275 million in FY 2002 which itself was a major boost from $50 million in FY 2001. Most of the new funds would go to the National Institute of Allergy and Infectious Diseases (NIAID), which would receive a boost of 57.3 percent to $4.0 billion as NIH's lead institute for bioterrorism R&D and a key part of the Bush Administration's homeland security request. Of the $1.7 billion NIH-wide counter-bioterrorism R&D request, roughly $1 billion would go to research activities aimed at developing biomedical tools to detect, prevent, and treat infection by biological agents. NIAID would also receive $150 million in R&D facilities funds for construction of new biosafety laboratories around the nation and $250 million to procure anthrax vaccines.
Some of the counter-terrorism R&D facilities funds would go to Buildings and Facilities, which would nearly double to $633 million over an FY 2002 total already inflated by counter-terrorism funds. The FY 2003 total would be quadruple the $161 million FY 2001 investment. The new funds would further improve NIH laboratory security ($80 million), build a new laboratory in Fort Detrick, Maryland, for bioterrorism research ($105 million), build a new laboratory on the NIH campus to study infectious agents ($186 million), and finish construction of NIH's new Neuroscience Research Center ($168 million). In addition to funds in Buildings and Facilities and NIAID for construction, the National Center for Research Resources (NCRR) would provide $77 million for extramural facilities construction grants to be awarded on a competitive basis, down from $110 million in FY 2002. An additional $14 million in extramural facilities construction funds would be awarded by two other institutes.
Cancer is a high priority in the FY 2003 budget request. Cancer research would make up $5.5 billion of the NIH budget in FY 2003, mostly in the National Cancer Institute (NCI). The NCI budget would total $4.7 billion in FY 2003, an increase of 12.2 percent, the second-largest percentage increase (after NIAID) among the established institutes and also the second-largest dollar increase. NCI would remain the largest institute.
Although not as high a priority as cancer research, AIDS research would also benefit from the budget request, increasing $255 million or 10 percent to $2.9 billion. Most of this research would be funded by NIAID, the lead institute for AIDS research.
An NCRR program receiving extra attention in the FY 2003 budget is the Institutional Development Award (IdeA) program, which would receive $185 million, up from $160 million in FY 2002 and $100 million in FY 2001. IdeA provides support to enhance the research capacities of states that have been underrepresented in winning NIH funds in the past. IdeA is similar to NSF and other agencies' Experimental Program to Stimulate Competitive Research (EPSCoR), also aimed at improving the research capacities of underrepresented states. IdeA's main goal is to develop critical masses of competitive researchers in IdeA states.
(For information on NIH's behavioral and social science research portfolio, please see Chapter 20.)
Other Health Research in the Federal Budget
Although NIH is the dominant funding source for health-related research in the federal budget, other agencies in the Department of Health and Human Services (HHS) also fund health-related research. Most of these agencies would see their R&D funding decline in the President's request (see Table II-8). Non-NIH R&D in HHS would total $1.1 billion in FY 2003.
The Agency for Health Care Policy and Research (AHCPR) was renamed the Agency for Healthcare Research and Quality (AHRQ) two years ago. AHRQ would not receive an appropriation in FY 2003, but its R&D programs would continue to be funded through transfers from other HHS agencies at a level of $263 million, down from $311 million. AHRQ's programs evaluate the quality and delivery of health care services, finance research on health care outcomes, explore ethnic and racial health care disparities, and evaluate changes in health care delivery. Another renamed agency, the Center for Medicare and Medicaid Services (formerly the Health Care Financing Administration) would have $28 million in FY 2003 (down from $117 million) to study the effectiveness of health-care delivery systems, especially in the context of the Medicare and Medicaid programs. Much of the decrease would be due to the proposed elimination of congressional R&D earmarks.
The Centers for Disease Control and Prevention (CDC) received a burst of attention last fall in the aftermath of the postal anthrax attacks as the lead federal agency in combating bioterrorism. In the immediate aftermath of the attacks, the agency received substantial sums of emergency money that boosted its total budget from $4.0 billion to $4.4 billion. Most of these funds were for non-R&D activities such as stockpiling vaccines or improving security at CDC facilities, but emergency funds for CDC's R&D efforts in anthrax and other bioterrorism agents boosted the CDC R&D budget nearly 10 percent to $601 million in FY 2002. In FY 2003, CDC R&D would decline 8.9 percent down to $548 million because most of the bioterrorism R&D work would shift to NIAID in NIH. The largest R&D unit in CDC is the National Institute for Occupational Safety and Health (NIOSH) which would have an R&D budget of $227 million in FY 2003.
The other major biomedical research agency in the federal government is the Department of Veterans Affairs (VA). Although it does not receive as much attention as the HHS agencies because all of its research is performed intramurally at VA hospitals and laboratories, the VA R&D portfolio has expanded steadily over the past decade and the agency now ranks among the top 10 R&D funding agencies. Its R&D budget of $810 million in FY 2003 (up 6.5 percent or $49 million; see Table II-19) would make it the eighth-largest R&D funding agency.
In recent years, VA's medical research has grown in tandem with increasing resources available to veterans medical care in general. More than half of the VA research portfolio is funded through the Medical and Prosthetic Research account, which would grow from $384 million to $409 million in FY 2003. The much-larger Medical Care appropriation ($25.0 billion), which funds the nationwide network of veterans hospitals and medical facilities, funds laboratory facilities, support services, and some clinician/investigators' salaries that support VA R&D activities. The Medical Care appropriation would supply $401 million in R&D funding for FY 2003.
In addition to these VA funds, VA researchers perform research with other funds, as shown in Table II-19. VA researchers win federal grants, mostly from DOD and NIH, to perform medical research in VA facilities, totaling $460 million in FY 2003. Other funding sources, including private medical research foundation, would support another $196 million in R&D in FY 2003, bringing total VA performance of R&D with all funds to $1.5 billion.
VA divides its research portfolio into four main areas: medical research, focusing on diseases with particular relevance to the veteran population; rehabilitation research to improve medical care for the physically disabled; health care services research, to improve the effectiveness of medical care for veterans; and cooperative studies, to support multi-site clinical trials. Among the major topics for VA research in these four areas are aging, chronic disease, mental illness, substance abuse, and trauma-related illness.