Highlights
- Congress recently finalized
an FY 2005 omnibus budget bill that provides $28.6 billion to the National Institutes of Health (NIH), a 2.0 percent or $573 million
increase (see Table 1), the smallest percentage
increase in decades.
- Most NIH institutes receive increases in a narrow range between 1.6 and
2.5 percent; there are no clear favorites this year, unlike the
past two years when biodefense research was heavily favored.
- NIH research (basic and applied) increases just 1.8 percent to $27.5
billion, far below the growth rates of the past six years.
- The final NIH budget falls short of the NIH request by $156 million. The
shortfall will likely mean that the total number of NIH Research Project
Grants (RPGs) will rise less than the planned 1.4 percent; the number
of new grants could rise slightly, but only near the FY 2003 number
after falling last year. The RPG proposal success rate is likely to
fall below the 27 percent rate for 2004. The average grant size would
rise just 1.3 percent, well below the 3.5 percent expected inflation
rate for biomedical research.
- NIH’s Roadmap
for Medical Research will receive up to $237 million in FY 2005, nearly
double last year’s funding level.
- NIH will soon
put into place a plan called for by Congress earlier in the year to
allow public access to scientific journal articles resulting from NIH-funded
research within six months of publication.
- R&D in the Department of Health and Human Services (HHS) rises
2.2 percent to $29.1 billion. Although less than the request, R&D
in the Food and Drug Administration (FDA), earmarked projects in the
Health Resources and Services Administration (HRSA) and biodefense research
in the Office of the HHS Secretary increase dramatically (see Table
2).
NIH R&D in FY 2005 Final Appropriations
On November
20, Congress came to an agreement on an FY 2005 omnibus appropriations
bill (HR 4818), which incorporates the final version of the FY 2005
Labor-HHS appropriations bill. The House is expected to give final approval
on December 6, and President Bush is expected to sign the bill into
law on December 8. The omnibus bill keeps funding for domestic programs
flat in FY 2005; the National Institutes of Health (NIH) budget does
better than the average for domestic programs, even after factoring
in a 0.80 percent across-the-board cut for most domestic programs. (All
figures in this analysis reflect the across-the-board cut.) The omnibus
provides NIH with a budget of $28.6 billion in FY 2005, a $573 million
or 2.0 percent boost over last year that falls short of the NIH request
by $156 million. NIH classifies 97 percent of its budget as R&D,
including R&D facilities (the remainder is for overhead costs and
research training). The final budget contains $27.8 billion for NIH
R&D, also a 2.0 percent increase over last year but 0.5 percent
short of the request. (For details of the NIH request, see Chapter
8 of AAAS
Report XXIX: R&D FY 2005 or the February
20 AAAS R&D Funding Update).
NIH and the NIH
community are adjusting to diminished expectations after years of favored
treatment. After a completed five-year doubling campaign involving 15
percent increases for each of the five years between 1998 and 2003 (see
Figure 1), biomedical researchers hoped for a ‘soft landing’ in following
years, or a gradual easing into slower growth rates. Instead, growth
has slowed dramatically. NIH enjoyed steady budget growth over the past
several decades, as shown in Figure 1, but growth accelerated sharply
after FY 1998 and continued to FY 2003 during the five-year NIH doubling
campaign. But then growth slowed down to just ahead of the inflation
rate in FY 2004, and slows down even further in FY 2005.
Figure 1. (click
on the image for PDF)
Most NIH institutes receive increases in a narrow range between 1.6 and
2.5 percent within the tight overall funding environment (see Table
1). There are no clear favorites, unlike the past two years when
biodefense research, mostly in the National Institute of Allergy and
Infectious Diseases (NIAID), was heavily favored.
The final appropriation, because it falls short of earlier NIH plans for
FY 2005, could cause NIH to fall short in its plans to allow research
projects grants (RPG) funding to increase.
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. In February, NIH estimated
that the request would support a record 37,744 RPGs, an increase of
515 awards over FY 2004 (up 1.4 percent). Because RPGs are multi-year
grants, the number of new grants initiated in FY 2005 would be far smaller.
In FY 2005, the number of new grants would rise slightly to 10,393,
but only back to the FY 2003 level after falling this year. The final
appropriation, falling 0.5 percent short of the request, will likely
result in fewer total and new grants than previously estimated.
The success rate for new grant applications could dip below 27 percent
in FY 2005, down from a high of 32 percent in FY 2001 and the lowest
since FY 1995 because of recent surges in the number of applications
outpacing the number of grants awarded. Although the number of RPGs
has increased from 25,000 in the early ‘90s to more than 35,000, the
number of grant applications has increased so fast that the success
rate is now well below the success rates of the NIH doubling period
1998-2003 when they exceeded 30 percent. The FY 2005 request estimated
that nearly every institute would fund a smaller percentage of proposals
in FY 2005 than in the past, despite the recent doubling of the NIH
budget. Expected success
rates vary by institute, each of which conducts its own grant solicitation
process, from a low of 15 percent (NIBIB) to a not-so-high rate of 33
percent (NHLBI and NIDDK). Among the largest institutes, the National
Cancer Institute (NCI) expects a success rate of just one in four applications
(24 percent), down steadily from 33 percent in 1998 before the doubling
campaign. The National Heart, Lung and Blood Institute (NHLBI)’s 33
percent success rate may be high among the institutes in FY 2005, but
would be down from 36 percent three years ago. Even the National Institute
of Allergy and Infectious Diseases (NIAID), whose budget has grown the
most dramatically recently, has seen the pool of applications grow even
faster so that its 27 percent expected success rate in FY 2005 would
represent a steady downward trend from 43 percent in 1997, again before
the NIH doubling campaign. Every
NIH institute (except NIEHS) would have a lower success rate in FY 2005
than in at least one of the years just before the NIH doubling campaign.
All these success rates could be even lower in FY 2005 because each
institute received less than requested.
Even for successful applicants, there would be some
disappointments in the budget. NIH planned to award a 1.3 percent average increase for all grants
between FY 2004 and FY 2005; not only could the final appropriation
require a scaling back of the increase, but even the requested increase
would have fallen well behind the NIH-calculated Biomedical Research
and Development Price Index (BRDPI) that attempts to calculate the inflation
rate for goods and services purchased by the NIH budget. Earlier this
year, NIH calculated the BRDPI increase for FY 2005 to be 3.5 percent.
(AAAS, and the federal government, uses the economy-wide GDP deflator
to adjust R&D dollars for inflation.)
The average size of competing RPGs is set to decline in FY 2005. The
average new grant in the FY 2005 request was estimated at $347,300,
0.6 percent below the expected average of $349,300 last year, though
slightly above the $338,600 average of 2003. Much of the decline is
due to an unusual number of large, one-time grants in FY 2004, according
to NIH; the average new multi-year grant would be 1.0 percent larger,
but again the final NIH budget, coming in below the request, could cause
the increase to shrink or even disappear.
NIH will fund $297 million in R&D facilities and capital equipment
in FY 2005, up 32 percent from last year but a sharp drop from $1.1
billion the year before. Much of this funding comes from the Buildings
and Facilities account, which increases 11 percent to $110 million in
FY 2005; in 2003, this account was $639 million because of a major investment
in biodefense facilities construction. The B&F appropriation funds
intramural construction at NIH facilities, while in the NIAID budget
there is $149 million allocated for extramural construction grants to
build an additional 20 extramural biosafety (level 3) laboratories around
the nation. The NIAID funding represents the second phase after a one-year
pause in FY 2004; in FY 2003, NIAID initiated the first round of extramural
biosafety facilities construction with $373 million mostly for BSL-4
facilities.
Congress saved a program for extramural construction from termination,
but at a greatly reduced funding level. NIH planned to discontinue an
annual $120 million program for extramural construction in the National
Center for Research Resources
(NCRR) in the FY 2005 request, leaving NCRR the only NIH institute to
see its budget decline, but Congress provided $30 million to continue
the program. NCRR is still the only institute to see its budget decline
(down 5.4 percent to $1.1 billion).
The final omnibus
bill contains only minor quibbles with NIH’s policies. The bill’s accompanying
language denies NIH’s request to fully fund the multi-year costs of
selected grants entirely in the FY 2005 budget; instead, NIH must continue
to fund all grants year by year except for a few small grants. NIH made
a similar request last year, also denied. 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.
NIH
will soon put into place a plan to allow public access to scientific
journal articles resulting from NIH-funded research within six months
of publication. A few months ago, the report accompanying the House
Labor-HHS bill included nonbinding language calling on NIH to outline
a policy by December to allow public access to all NIH-funded research
results. In response, NIH published a notice announcing a draft policy
for public comment that would respond to the report language, and accepted
comments on the draft until last month. The omnibus bill contains language
supporting the earlier House language and calling for NIH to take into
account the public comments in formulating a final policy. The draft
policy would require that “grantees and supported Principal Investigators
provide the NIH with electronic copies of all final version manuscripts
upon acceptance for publication if the research was supported in whole
or in part by NIH funding.” NIH
would then archive the manuscript in its PubMed Central database six
months after publication, making it freely available to the public.
NIH is expected to finalize the details of this policy shortly, with
only minor changes to the draft.
NIH Priority Areas
Congress approved the funds necessary for NIH to carry out an expanded
Roadmap for Medical Research. Last year, NIH Director Elias Zerhouni
introduced a Roadmap for Medical Research involving all the NIH institutes
and centers and aimed at three areas of NIH research: improving clinical
research (dubbed “Re-engineering the Clinical Research Enteprise”),
encouraging interdisciplinary research (“Research Teams of the Future”),
and providing new knowledge and research tools to assist other researchers
(“New Pathways to Discovery”). Congress approved $12 million in the
Office of the Director (OD) to begin the Roadmap, but with contributions
from the other ICs and other OD funds total Roadmap funding was $128
million last year. Total Roadmap funding will nearly double to $237
million in FY 2005 with $60 million coming from OD and the remainder
coming from a tap of up to 0.63 percent of the other institutes’ FY
2005 budgets.
Biodefense R&D continues to be a high priority in the NIH portfolio
with an investment of $1.7 billion in FY 2005, up 3.8 percent from last
year. As recently as three years ago, the NIH investment was only $162
million. Most NIH biodefense R&D is funded by the
National Institute of Allergy and Infectious Diseases (NIAID), which
became the second-largest NIH institute in the aftermath of the fall
2001 anthrax attacks. NIAID would continue to award biodefense research
grants in FY 2005, complete the establishment of 10 extramural Regional
Centers of Excellence in Biodefense and Emerging Infectious Disease
Research (RCE) with the designation of the final 2 centers, provide
$149 million for the second phase of extramural construction grants
for biosafety level (BSL) 3 and 4 laboratories around the nation, and
conduct animal and clinical trials of various candidate vaccines. In
addition to funds in the NIH budget, there is an additional $47 million
in new funds from the Office of the (HHS) Secretary for NIH to spend
on developing medical countermeasures against nuclear or radiological
terrorist attacks.
R&D in Other HHS Agencies
Total R&D
in the Department of Health and Human Services (HHS) will be $29.1 billion
in FY 2005, an increase of 2.2 percent driven primarily by the NIH budget.
Among the other HHS agencies, R&D in the Food and Drug Administration
(FDA) increases by 14.3 percent to $154 million, in part to boost the
FDA’s laboratory and science capabilities in food safety. R&D in
the Office of the Secretary will surge dramatically by 21.5 percent
to $148 million, most of which will be transferred to other HHS agencies
such as NIH for medical countermeasures (see above) and the Centers
for Disease Control and Prevention (CDC) for anthrax vaccine research
and biosurveillance R&D. The Office of the Secretary will be taking
on an expanded role in biodefense; in addition to its expanded R&D
funding, the office recently took back ownership and management of the
Strategic National Stockpile (SNS) of countermeasures such as treatments
and vaccines against bioterror threats, and also gained legal authority
to select eligible countermeasures for the $5.6 billion, 10-year Project
Bioshield funded by the Department of Homeland Security (DHS) to buy
future products for the SNS. (See the AAAS R&D
Funding Update on the Department of Homeland Security for details
of Project Bioshield.) Finally, R&D in the Health Resources and
Service Administration (HRSA) more than quadruples to $101 million because
of nearly $80 million in R&D earmarks, mostly for laboratory construction
projects in university medical schools and teaching hospitals around
the country.
Impacts and Historical Trends for NIH R&D
Figure 2.
(click on the image for PDF)
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 and Figure 2, 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 slowed down considerably and slows down further in the enacted FY 2005
budget. Figure 2 also shows that NIH continues to invest 90 percent of its
research portfolio in the life sciences, nearly exclusively biology and medical
research. Thus, its recent spectacular budget growth has mostly benefited the
life sciences; among other disciplines, psychology research makes up 3 percent
of the NIH portfolio but no other discipline exceeds 2 percent. NIH support for
these other disciplines like chemistry and computer sciences have grown
dramatically as well, but they have remained relatively constant, small shares
of an expanding total.
Figure 3.
(click on the image for PDF)
As shown in Figure
3, 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 more than 80 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 more than 30 percent of all
federal support for chemistry. NIH is also a large supporter of social
and behavioral sciences research. In FY 2005, 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.
Figure 4.
(click on the image for PDF)
NIH alone now accounts for two-thirds of all federal support for R&D
in colleges and universities. Figure
4 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 17 percent of NIH R&D
which goes to ‘other’ performers (see Figure 4) goes to independent
nonprofit institutions, including non-university research hospitals
and medical research foundations; NIH provides two-thirds of all federal
R&D funds to nonprofits. Even with the moderating growth in NIH
R&D in the FY 2005 budget, universities and colleges and medically
oriented nonprofits can expect some increases in federal R&D support
in FY 2005, especially those that are competitive in biodefense research,
while the NIH laboratories will also receive increases.
NIH R&D is performed primarily in six states. Just over half the
NIH R&D portfolio is spent in California,
Massachusetts, Maryland,
New York, Pennsylvania,
and Texas, each receiving
more than $1 billion annually from NIH. The FY 2005 budget provides
$220 million for NIH’s Institutional Development Award (IDeA) program,
up from $214 million in FY 2004. IDeA provides support to enhance the
research capacities of 23 states (and Puerto Rico)
that have been underrepresented in winning NIH funds in the past. In
FY 2002, just 8.5 percent of the NIH R&D portfolio went to these
states, less than either California
or Massachusetts received.
Outlook and Next Steps
The omnibus bill
is likely to be signed into law the week of December 6, bringing to
a close a disappointing budget season for NIH compared to recent years.
Already,
there is mounting concern about what FY 2006 portends for NIH. With Congress and the President apparently committed to reducing
the budget deficit in half within the next five years primarily through
holding down domestic spending, the consequences for NIH are becoming
clearer. The FY 2005 budget contained preliminary projections for the
NIH budget out to FY 2009; recently, the Bush Administration signaled
that it intends to follow through on the broad outlines of these projections
in the FY 2006 budget proposal scheduled for release in February. In
FY 2006, the NIH budget could fall to $28.2 billion, giving back even
the modest increase for this year. Although the details of the FY 2006
request are still being negotiated inside the executive branch, NIH
would be lucky to emerge with even a flat request much less an increase.
(For more on the five-year projections for federal R&D, see the
April 22 (revised May 7) AAAS Analysis of the
Outyear Projections for R&D in the FY 2005 Budget.)
(This analysis is one of a series
of AAAS R&D Funding Updates on the FY 2005 congressional appropriations
process. The complete series of AAAS R&D Funding Updates, including
continually updated analyses of R&D in FY 2005 appropriations, is
available on the AAAS R&D Web Site
(http://www.aaas.org/spp/rd) in the “FY 2005
R&D” or the “What’s New” sections.)
- December 6, 2004
AAAS R&D Budget and Policy Program
1200 New York Ave, NW
Washington, DC 20005
(202) 326-6607; -6600
www.aaas.org/spp/rd
