(All figures in this analysis have been revised since early
February to reflect revised agency estimates. This analysis is a preview
of the NIH chapter in the forthcoming AAAS Report XXIX: Research and Development
FY 2005, a comprehensive look at the President’s budget for R&D
in FY 2005. More tables and continually updated supplemental materials
on R&D in the FY 2005 budget can be found on the AAAS R&D Web
site at http://www.aaas.org/spp/rd.)
Highlights
- The National Institutes
of Health (NIH) budget, after doubling in the five years between 1998
and 2003, would see an increase of 2.6 percent in FY 2005 to $28.8 billion
(see Table II-9). NIH R&D would rise
2.6 percent to $27.9 billion.
- Most NIH institutes would receive increases in a narrow range between
2.8 and 3.3 percent; there would be no clear favorites, unlike the
past two years when biodefense research was heavily favored.
- The largest
percentage increase would go to the Office of the Director (OD; up 10.0
percent) because of $60 million in new money for the NIH Roadmap for
Medical Research, NIH Director Elias Zerhouni’s initiative to reinvigorate
NIH’s clinical research, interdisciplinary research, and new research
tools. Another $177 million would come from institute budgets.
- NIH research (basic and applied) would increase 2.5 percent to $27.7
billion, far below the growth rates of the past six years. NIH would
fund 50 percent of all federal support for research in FY 2005.
- The total number of Research Project Grants (RPGs) would barely increase
by 1.4 percent; the number of new grants would rise slightly, but
only to the FY 2003 level after falling this year. The RPG proposal
success rate would fall to 27 percent in 2004 and stay there in 2005,
down from 30 percent last year. The average grant size would rise just
1.3 percent, just at the expected rate of inflation for the economy
as a whole, but well below the 3.5 percent expected inflation rate for
biomedical research. The size of the average new grant would actually
fall in 2005.
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 biomedical 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 2005 budget request of $28.8 billion for NIH would be a $729 million
(or 2.6 percent) increase over the FY 2004 budget (see Table
II-9). The FY 2004 budget was only signed into law at the end of
January; until then, NIH had been operating at FY 2003 funding levels
since October 1. 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 2005 R&D would total $27.9 billion,
again a 2.6 percent increase.
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,
biomedical researchers hoped for a ‘soft landing’ in following years,
or a gradual easing into slower growth rates. Biomedical research advocates
had hoped for 8 to 10 percent increases in 2004 and 2005. But growth
in the NIH budget slowed sharply to 3.1 percent in 2004, turning a ‘soft’
landing into a hard one. The FY 2004 impact was blunted somewhat by
a 7 percent increase in research funding offset by steep cuts in facilities
funding, but in FY 2005 research funding would slow to a 2.5 percent
increase, signaling that the NIH doubling period is definitely over.
Figure 1. (click
on the image to view or download a color, full-size PDF version of the
chart)
NIH Funding Mechanisms
Most NIH institutes would receive increases in a narrow range between
2.8 and 3.3 percent within the tight overall funding environment.
There would be no clear favorites, unlike the past two years when biodefense
research was heavily favored.
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 2.7 percent in FY 2005 to reach $14.9
billion. These funds would support a record 37,744 RPGs, an increase
of 515 awards over FY 2004 (see Figure 2). 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 to the FY 2003 level after falling this year.
Figure 2. (click
on the image to view or download a color, full-size PDF version of the
chart)
The success rate for new grant applications would dip to 27 percent
in FY 2004 and would stay there in FY 2005, down from a high of 32 percent in
FY 2001 (see Figure 2) 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
(see Figure 2), 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.
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. In fact, every NIH institute (except NIEHS) would have a lower success
rate in FY 2005 than in at least one of the years in the late 1990s
before the NIH doubling campaign.
Even for successful
applicants, there would be some disappointments in the budget. The 1.3 percent average increase for all grants between FY 2004 and FY
2005 would just match the expected rate of inflation for the economy
as a whole (see Figure 2), but would fall 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. Recently, NIH calculated the BRDPI increase for FY 2005
to be 3.5 percent. In recent years, the BRDPI inflation rate has outpaced
the economy-wide inflation rate by more than 2 percent a year. (AAAS,
and the federal government, uses the economy-wide GDP deflator to adjust
R&D dollars for inflation.) The NIH average takes in some institutes
that would see the average grant size decline; for example, the average
NCI grant would fall from $413,200 in FY 2004 to $409,400 in FY 2005.
The average size of competing RPGs, however, would decline in FY 2005.
The average new grant at $347,300 would be 0.6 percent below the expected
average of $349,300 this year, though slightly above the $338,600 average
of last year. 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.
NIH also distributes
about 10 percent of its budget through R&D contracts (see Figure
1). Funding for R&D contracts would fall 3.9
percent to $2.7 billion in FY 2005, primarily because of a planned
pase-out of contracts for biodefense activities such as vaccine development
and testing. Non-biodefense R&D contracts would actually increase
neat year. R&D contract funding has grown dramatically over the
last few years as biodefense research became a top priority in NIH,
doubling to $2.8 billion between FY 2001 (before the fall 2001 anthrax
attacks) and FY 2004, and the FY 2005 budget represents a move toward
a more normal NIH funding profile.
NIH funding of
research centers would continue to grow in FY 2005, by 5.9 percent to
$2.7 billion, to fund a net 17 new centers for a total of 1318. These
multi-year multidisciplinary commitments of funds, mostly to universities,
have grown in importance within the NIH budget over the past decade
and would hit an all-time high of nearly 10 percent in FY 2005.
NIH is heavily involved in research training of the next generation
of biomedical researchers. Research training programs would receive
$764 million in FY 2005, up just 2.0 percent from this year (see Table
II-10). This increase would allow for a total of 17,791 full-time
training positions, up 225 from FY 2004. 198 new trainees would be funded
through the NIH Roadmap’s Interdisciplinary Research Training Initiative,
22 net new positions would be in biodefense research, and 24 in NIBIB,
necessitating a net cut in full-time training positions at other NIH
ICs. Stipends for predoctoral and postdoctoral trainees would stay at
FY 2004 levels with no adjustments for inflation, another victim of
tight funding constraints in FY 2005.
NIH Performers and Character of Work
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, $15.2 billion out of $28.8
billion in FY 2005 (up 3.3 percent). NIH is by far the largest federal
supporter of basic research, and in FY 2005 would provide 57 percent
of all federal support, a share that has been steadily increasing for
decades. NIH is also the largest federal supporter of applied research,
$12.5 billion in FY 2005 (44 percent of all federal support), averaging
out to 50 percent of all federal basic and applied research.
NIH would fund
$258 million in R&D facilities and capital equipment in FY 2005,
up 14.2 percent from this year but a sharp drop from $1.1 billion last
year. Much of this funding comes from the Buildings and Facilities account,
which would hold steady at $100 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 would be $150 million
for extramural construction grants to build an additional 20 extramural
biosafety (level 3) laboratories around the nation. The remaining $8
million in facilities funding would come from the National Cancer Institute
to renovate its laboratory facilities in Frederick, MD. The NIAID funding
would be 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.
NIH would discontinue a $119 million program for extramural construction
in the National Center for Research Resources (NCRR) in FY 2005, leaving
NCRR the only NIH institute to see its budget decline (down 7.2 percent
to $1.1 billion). There was a similar proposal last year, but Congress
added back these competitively awarded construction grants in the FY
2004 appropriations process.
NIH Priority Areas
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 would be $128 million this year, proposed to nearly
double to $237 million in FY 2005 with $60 million coming from OD. The
other ICs’ contributions would be 0.63 percent of their FY 2005 budget
requests.
New Pathways of
Discovery, aimed at funding cutting-edge research to build biological
databases and other research tools that could benefit the whole of biomedical
research, would receive more than half the Roadmap funding with $137
million, more than double the $64 million this year. Biomedical computing,
molecular libraries, and nanomedicine would be among the research priorities
in this area. Research Teams of the Future, aimed at encouraging interdisciplinary
research and high-risk basic research, would receive $39 million. The
goal of Re-engineering the Clinical Research Enterprise, focused on
enhancing clinical research training and clinical research networks,
would receive the remaining $61 million. These funds would be pooled
in the Office of the Director and redistributed to the various ICs to
administer; in the FY 2005 plan, the National Institute of General Medical
Sciences (NIGMS) would administer the largest chunk of the Roadmap funds
($47 million).
Biodefense R&D continues to be a high priority in the NIH portfolio.
NIH identifies $1.8 billion for biodefense R&D in FY 2005, up 4.5
percent from this year. As recently as two 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
$150 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 would be 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.
Though small in
budgetary terms, obesity research takes on new importance in
the FY 2005 request. NIH would increase its investments in obesity
research by 10 percent to $440 million in FY 2005, including $22 million
in new funds for trans-NIH obesity research initiatives.
HIV/AIDS research is another priority in the budget. The NIH HIV/AIDS
R&D portfolio would expand 2.8 percent in FY 2005 to reach $2.9
billion. The majority ($1.5 billion) of this research would be funded
by NIAID, the lead institute for AIDS research. Included in the FY 2005
budget is $100 million (the same as FY 2003 but down $50 million from
this year) 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.
Outlook and Historical Trends
Figure 3. (click
on the image to view or download a color, full-size PDF version of the
chart)
NIH has enjoyed steady budget
growth over the past several decades, as shown in Figure 3, but growth
accelerated sharply after FY 1998 and continued to FY 2003 during the five-year
NIH doubling campaign. Growth slowed down to just ahead of the inflation rate
in FY 2004, and would slow down some more in FY 2005 in the NIH request. There
will be tremendous political pressure for Congress to approve an increase for
NIH larger than the 2.6 percent proposal, but lawmakers may be stymied by tight
restraints on overall domestic discretionary spending proposed by the
President. If Congress agrees to these overall funding levels, then any
increases for NIH request would have to be offset by cuts in other programs.
Even the modest proposed increase, however, looks good compared to what
may lie in store. 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 contains preliminary projections
for the NIH budget out to FY 2009. In
FY 2006, the NIH budget would fall to $28.2 billion, giving back
even the modest increase for next year, and increase to only $28.7 billion
in FY 2009, below the FY 2005 budget. After
adjusting for expected inflation, the five-year Bush budget would leave
the NIH budget 6 percent below this year’s funding level in 2009.
- February 20, 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
