Highlights
- The National
Institutes of Health (NIH) has a budget of $28.0 billion in FY 2004
in the FY 2004 omnibus bill, an increase of $878 million or 3.2 percent
over FY 2003 after adjusting for an across-the-board cut. Nearly all
NIH institutes and centers receive increases of about 3 percent.
- After a completed five-year doubling campaign involving 15 percent
increases for each of the past five years, growth in the NIH budget
slows sharply in FY 2004.
- Biodefense research continues to be a high priority in FY 2004. The
final FY 2004 budget gives $4.3 billion for the National Institute of
Allergy and Infectious Diseases (NIAID), the lead NIH institute for
biodefense research, a boost of 16.3 percent over FY 2003 after a 47
percent boost last year.
- NIH research (basic and applied) increases 7.0 percent to
$26.9 billion, greater than the 3.2 percent increase for the overall
NIH budget, because Congress would agree to NIH's plan to discontinue
most of its FY 2003 facilities funding and shift the money to research
in FY 2004, with most of the increase going to biodefense. NIH R&D,
including facilities funding, rises 3.2 percent to $27.1 billion, ahead
of the 1.9 percent projected inflation rate.
- Recent growth in the number of Research Project Grants (RPGs)
would moderate in FY 2004, especially for new competing grants.
The number of new non-biodefense RPGs may actually decline in FY 2004,
and the success rate for NIH grants is expected to dip to 29 percent.
The FY 2004 NIH Budget in Final FY 2004 Appropriations
Nearly four months after the start of FY 2004, Congress gave final
approval on January 22 to an omnibus appropriations bill (HR 2673) that
sets final funding levels for NIH and several other R&D funding
agencies. The House approved the omnibus bill on December 8, but the
Senate delayed final action until January 22; President Bush is expected
to sign the bill into law by the end of January. The FY 2004 omnibus
bill provides $28.0 billion in FY 2004 for the NIH, an increase of 3.2
percent or $878 million over FY 2003 (see Table
1) that adds $152 million to the President's request. (Note: the
figures in Table 1 include mandatory funding
and NIH appropriations in other appropriations bills, and are also adjusted
to reflect an across-the-board cut of 0.59 percent included in the omnibus
bill. See the footnotes below Table 1).
NIH R&D, which makes up 97 percent of the NIH budget, totals $27.1
billion in the omnibus (up 3.2 percent). NIH is the second-largest supporter
of R&D in the federal government after the Department of Defense
(DOD). It is by far the largest supporter of basic research, applied
research, and R&D at colleges and universities, and has a disproportionate
impact on support for the life and medical sciences and other fields.
The remaining 3 percent of the NIH budget goes to research training
and overhead costs. (For details of NIH's proposed allocation of its
budget and its role in federal funding of R&D, please see the AAAS
R&D Funding Update on NIH R&D in the FY 2004 President's
Budget, or Chapter 8 in AAAS
Report XXVIII: R&D FY 2004).
After a completed five-year doubling campaign involving 15 percent
increases for each of the past five years, growth in the National Institutes
of Health (NIH) budget slows sharply in FY 2004. Although the Bush Administration
and Congress promised to double the NIH budget between FY 1998 and FY
2003 and kept the promise, there were no promises for continuing growth
in FY 2004 and beyond. With the prospect of record budget deficits for
the next few years, and higher priorities for big-ticket budget items
such as tax cuts and a prescription drug benefit for Medicare, Congress
and President Bush have pledged to restrain growth in domestic spending.
To meet this pledge, the NIH budget returns to earth in FY 2004.
The modest growth in the NIH budget is distributed relatively evenly
in FY 2004, unlike the large differentials in the FY 2003 budget awarding
larger increases for bioterrorism, facilities construction, and cancer.
Although biodefense research remains a high priority in FY 2004 and
receives a disproportionate increase, nearly all the NIH institutes
receive increases of about 3 percent (see Table
1). Only the Office of the Director (OD; up 23.1 percent) and NIH's
biodefense research receive significantly greater increases.
In FY 2004, NIH biodefense R&D drops slightly to $1.6 billion,
but funding of biodefense research grants (excluding facilities) more
than doubles. Last year, NIH became the lead research agency in
the burgeoning federal effort to combat bioterrorism. NIH identified
$1.7 billion for bioterrorism-related R&D and infrastructure in
FY 2003, up substantially from only $275 million in FY 2002. In FY 2004,
NIH will shift its funding toward research grants and away from the
construction of facilities. Most of the new biodefense funds go to
the National Institute of Allergy and Infectious Diseases (NIAID), whose
budget increases 16.3 percent to $4.3 billion in FY 2004. The new NIAID
funds go to support rapid growth in investigator-initiated biodefense
research grants as well as support of biodefense research centers at
university campuses.
NIH Buildings and Facilities funding falls from $629 million in
FY 2003 down to $89 million; in FY 2004, NIH discontinues most FY
2003 one-time funding for facilities construction, including funding
for extramural and intramural biodefense research laboratories and NIH
facilities improvements. Congress rejected NIH's proposal to discontinue
an $120 million program for extramural construction in the National
Center for Research Resources (NCRR) in FY 2004, providing $119 million
for this competitively awarded construction grants program, leaving
NCRR with a 3.5 percent increase in its overall budget rather than a
requested cut.
Congress provides $215 million in FY 2004 for another NCRR program,
the Institutional Development Award (IDeA) program, up from $210 million
in FY 2003 and the FY 2004 request. IDeA provides support to enhance
the research capacities of 23 states that have been underrepresented
in winning NIH funds in the past.
HIV/AIDS research is another priority in FY 2004. The NIH HIV/AIDS
R&D portfolio expands roughly 4 percent in FY 2004 to reach approximately
$2.9 billion. Most of this research will be funded by NIAID, the lead
institute for AIDS research; also included in the final FY 2004 budget
is $150 million (up from $100 million in FY 2003) to be transferred
to the Global Fund to Fight HIV/AIDS, Malaria, and Tuberculosis - an
international public-private partnership to provide grants for the prevention,
treatment, and cure of these diseases. (The Agency for International
Development (AID) also contributes to the Global Fund; the omnibus bill
contains $400 million for the FY 2004 AID contribution to the Fund).
The FY 2004 omnibus bill contains only minor quibbles with NIH's policies.
The omnibus bill's accompanying language denies NIH's request to fully
fund the multi-year costs of 322 selected grants entirely in the FY
2004 budget; instead, NIH must continue to fund all grants year by year
except for a few small grants that have traditionally been multi-year
funded. The bill also contains an annually renewed provision prohibiting
NIH from funding human embryo research or any research in which human
embryos would be destroyed.
The bill provides an initial endorsement of NIH Director Zerhouni's
NIH Roadmap initiative, announced two months ago as a program to
reinvigorate NIH's clinical research, high-risk basic research, and
collaborative research. The omnibus bill authorizes the NIH Director
to enter into new types of funding mechanisms to carry out his initiative
as long as the funds are in some form merit-reviewed, and gives him
$7.5 million in FY 2004 to carry out these experiments. Full consideration
of the Roadmap initiative will most likely take place in 2004 as part
of the NIH reauthorization process.
There are some minor, subtle criticisms of NIH policies, however,
in the omnibus bill. The bill calls for a major effort to promote
research at the interface between the life sciences and the physical
sciences. The report language notes that advances in the life sciences
often depend on support from advances in the physical sciences, and
that the boundaries between these disciplines are increasingly blurred.
The omnibus bill calls on NIH, traditional funding source for the life
sciences, to work with other agencies traditionally associated with
the physical sciences (such as the National Science Foundation, NASA,
Department of Energy, and DOD) on a conference to discuss ways to promote
advancements in the physical sciences and on research at the interface
of the physical and life sciences, and to better integrate federal efforts
in these areas. The bill also calls on NIH to pay more attention
to the affordability of health products and technologies that result
from NIH research. Congress instructs NIH to submit a report to
Congress on how NIH can promote the affordability of federally funded
inventions and identify any barriers preventing NIH from promoting affordability.
R&D in other HHS Agencies
Although 95 percent of total R&D funding at the Department of Health
and Human Services (HHS) comes from the NIH, there is also significant
research funded by other HHS agencies (see Table
2). Funding at the Centers for Disease Control and Prevention
(CDC) is primarily aimed at non-R&D activities such as public
health and health promotion activities and more recently in biodefense
for programs such as increasing state and local preparedness and improving
security, but CDC also has a strong intramural research program at CDC
laboratories. Congress provides $574 million for CDC R&D activities,
up 0.1 percent from FY 2003 and a significant boost over the $521 million
request. CDC also receives research funds from the Office of the Secretary
(see Table 2) for a variety of biodefense-related
research activities, including $18 million for anthrax vaccine research.
CDC also receives $294 million for non-R&D global HIV/AIDS programs
that complement Global Fund dollars provided to NIAID (above). CDC will
continue SARS research in FY 2004 out of its regular budget, building
from a special $16 million emergency appropriation in FY 2003.
The final omnibus bill does not contain a Senate-approved provision
that would have prevented the Office of the Secretary in HHS from carrying
out its human resources consolidation plan. The HHS, and especially
HHS Secretary Thompson, has come under fire over the past year from
congressional critics and biomedical researchers over its plan to consolidate
many legislative, personnel, procurement, and review functions into
centralized, HHS-wide units, thereby restricting the autonomy that many
NIH institutes and HHS agencies have traditionally had to recruit civil
servants, manage public relations, communicate with Congress and the
public, and organize procurement and grant review. The omnibus would
presumably leave NIH and other HHS agencies free to continue its consolidation
efforts.
Impacts and Historical Trends for NIH R&D
Although other R&D funding agencies have struggled to maintain
their budgets in the past several years, NIH has enjoyed extraordinary
success on Capitol Hill, and its budget growth accelerated between FY
1998 and 2003. As shown in Figure 1, NIH has enjoyed steady growth in
its R&D budget over the past two decades. NIH's budget growth accelerated
during the NIH doubling campaign (in non-inflation adjusted terms) in
the five years to FY 2003. But in FY 2004, growth slows down considerably.
The slower growth could have significant impacts on the number of NIH
grants and on success rates. In February, NIH estimated that the FY
2004 request would allow it to award 37,467 Research Project Grants
(RPGs), the investigator-initiated, competitively awarded grants that
make up the core of NIH's R&D portfolio. Of that total, NIH estimated
that 10,509 would be new competing awards, an increase of 344 new awards
(up 3.4 percent), far smaller than the annual increases in the doubling
period. The omnibus bill would come in only slightly over the request,
so the RPG totals should be similar when NIH finishes allocating its
FY 2004 budget. But the net increase in new awards would be for biodefense
research grants, so it is highly likely that the FY 2004 NIH budget
would mean fewer new non-biodefense RPGs than last year. Not surprisingly,
the competition for new grants is projected to get tougher: the omnibus
bill would likely confirm NIH's estimates that 29 percent of RPG applications
will be successful overall in FY 2004, down from an estimated 30 percent
last year and 31 percent in FY 2002.
Figure 1. (click
on the image to view or download a color, full-size PDF version of the
chart)
Figure 2. (click
on the image to view or download a color, full-size PDF version of the
chart)
R&D contracts would be the
only funding mechanism to receive large increases in FY 2004. The NIH request
presumed $2.8 billion for R&D contracts in FY 2004, a 15.7 percent increase, because much of NIH’s
expanding effort in biodefense research would be
conducted through this mechanism. There would also be a smaller but still
substantial 8 percent increase to $2.6 billion for Research Centers, again
primarily because of the expanding biodefense
research effort funneled through university-based Regional Centers of
Excellence for Biodefense and Emerging Infectious
Diseases.
As shown in Figure
2, NIH provides nearly 80 percent of all federal support for the life
sciences, and nearly 90 percent of federal support for the sub-discipline
of the biological sciences. NIH also funds 75 percent of all federal
psychology research. For most other science and engineering disciplines,
NIH plays a relatively minor funding role. One exception is chemistry,
for which the National Institute of General Medical Sciences (NIGMS)
is a major sponsor and provides nearly 30 percent of all federal support
for chemistry. NIH is also a large supporter of social and behavioral
sciences research. In FY 2004, because even the historically modest
NIH budget growth would still far outpace growth in other agencies’
research budgets, NIH alone is expected to fund a record 48 percent
of all federal support for basic and applied research.
NIH’s
research portfolio is skewed dramatically to the life sciences, and
the life sciences have benefited the most from the steady growth in
the NIH budget. The life sciences receive 89 percent of NIH’s
total research portfolio, with all other disciplines receiving the remaining
11 percent.
Figure 3. (click
on the image to view or download a color, full-size PDF version of the
chart)
NIH alone now accounts for two-thirds of all federal support for
R&D in colleges and universities.
Figure 3 shows that a majority of HHS R&D funds go to colleges and
universities; because of the size of the NIH budget in comparison to other
federal agencies, NIH is the dominant funding source for nearly all colleges
and universities with medical schools. NIH’s
intramural laboratories, mostly in Maryland,
perform a fifth of total NIH R&D. Nearly all of the 18 percent of NIH
R&D which goes to ‘other’ performers (see Figure 3) goes to independent
nonprofit institutions, including non-university research hospitals. Even with
the moderating growth in NIH R&D in the FY 2004 budget, universities and
colleges and medically oriented nonprofits can expect some increases in federal
R&D support in FY 2004, especially those that are competitive in biodefense research, while the NIH laboratories will also
receive increases.
Next Steps
The House approved
the omnibus bill on December 8, and the Senate gave final approval on
January 22. Until a final budget is signed, NIH and other HHS agencies
are operating at last year's funding levels under a continuing resolution
extending through January 31; President Bush is expected to sign the
bill into law by then.
(This analysis is one of a series
of AAAS R&D Funding Updates on the FY 2004 congressional appropriations
process. The complete series of AAAS R&D Funding Updates, including
continually updated analyses of R&D in FY 2004 appropriations, is
available on the AAAS R&D Web Site (http://www.aaas.org/spp/rd)
in the “FY 2004 R&D” or the “What’s
New” sections.)
- December 9, 2003 (revised January 23)
AAAS R&D Budget and Policy Program
1200 New York Ave, NW
Washington, DC 20005
(202) 326-6607; -6600
www.aaas.org/spp/rd
