Highlights
-
The final National Institutes of Health (NIH) appropriation for 2006
sticks closely to the President’s request, but an across-the-board cut
contained in another spending bill leaves NIH with a budget of $28.6
billion, down 0.1 percent for the first NIH budget cut since 1970 (see
Table 1). After adjusting for inflation,
NIH has a smaller budget in 2006 than it did in 2003, erasing the small
gains of the last two years.
- All but two institutes suffer budget cuts in 2006, with most institute
budgets falling between 0.4 and 0.7 percent.
- The
final NIH appropriation continues the recent trend of the NIH budget
falling behind its own calculations of biomedical research inflation,
estimated at 3.3 percent last year and 3.2 percent in 2006, but 2006
is the first time since 1982 that NIH appropriations have failed to
keep pace with economy-wide inflation, projected at 2 percent in 2006.
- The largest percentage
increase goes to the Office of the Director (OD; up 33.5 percent) for
transferred biodefense R&D but also to boost OD funding for clinical
research, high-risk basic research, and collaborative research in the
NIH Roadmap for Biomedical Research.
- NIH research (basic and applied) manages a small increase of 0.5 percent
to $27.6 billion, the smallest increase in 36 years.
- NIH had already projected a decline in the number of Research Project Grants (RPGs) for the second year in a row in 2006, no inflation adjustment
for most new or continuing grants, and a decline in the RPG success
rate for the fifth year in a row down to 21 percent, but the across-the-board
cut will make these funding trends even worse.
- R&D
in the other Department of Health and Human Services (HHS) agencies
combined falls $25 million or 2.0 percent to $1.3 billion (see Table
2). The cut, however, is due to the transfer of biodefense
R&D from the Office of the Secretary to NIH; other HHS R&D actually
increases in 2006 because of emergency appropriations for R&D to
combat a potential avian flu pandemic.
NIH R&D in FY 2006 Final Appropriations
In 2006,
the NIH budget falls for the first time in 36 years.
Although Congress appropriated the modest increase that NIH requested
back in February, a separate 1 percent across-the-board cut for all
discretionary programs leaves NIH with $28.6 billion in 2006, $35 million
or 0.1 percent less than 2005 (see Table 1).
All but two institutes have less in 2006 than last year, with most
institutes facing budget cuts of between 0.4 and 0.7 percent.
NIH classifies
97 percent of its budget as R&D, including R&D facilities (the
remainder is for overhead costs and research training). NIH R&D
totals $27.7 billion in 2006, also a 0.1 percent cut from 2005 funding
levels and 1 percent less than the request. (For details of the NIH request, see Chapter
8 of AAAS Report XXX: R&D
FY 2006 or the March 4 AAAS R&D Funding
Update). NIH support of basic and applied research grows slightly
compared to total R&D with a 0.5 percent increase because of a drop
in R&D facilities funding, but the growth in NIH research support
is still the smallest increase since 1970.
Figure 1. (click on the image for PDF)
On December 13, congressional
appropriators agreed on a second conference report (final agreement) for the FY
2006 Labor-HHS-Education appropriations bill (HR 3010) which funds NIH and
other HHS agencies. In November, appropriators thought they had reached a final
agreement, but the House rejected the first conference report because of its
steep cuts for many of the health and education programs in the bill. After
padding the first conference agreement with some extra health care and rural
health funds offset by shifting home heating assistance funds to a separate
bill, the new agreement won final approval from the House and Senate just
before Christmas. But the final Defense appropriations bill cleared separately
by Congress the same week includes a 1 percent across-the-board cut for all
discretionary programs to partially offset emergency hurricane recovery
spending, transforming the flat funding or modest increases for many programs
into cuts. (All figures in this analysis reflect the second conference report
of the Labor-HHS bill and also reflect the across-the-board cuts in the final
Defense bill.)
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 gradual easing into slower growth rates. But growth in the
NIH budget slowed sharply to 3.2 percent in 2004, slowed even further
to 2.0 percent in 2005, and now reverses in 2006 with a declining budget
for the first time since 1970. After adjusting for inflation, FY
2006 is the first time in 24 years that the NIH R&D portfolio falls
behind inflation in the economy as a whole, after just barely staying
ahead of inflation in 2004 and just matching it in 2005 (see Figure
1). The 2006 budget cut is steep enough to bring NIH R&D below
the 2003 funding level in real terms, erasing the increases of the last
two years. NIH had already fallen behind its own Biomedical Research
and Development Price Index (BRDPI), an index that attempts to calculate
the inflation rate for goods and services purchased by the NIH budget.
NIH projects the BRDPI increase for FY 2006 at 3.2 percent after a 3.3
percent increase in 2005. In recent years, the BRDPI inflation rate
has outpaced the economy-wide inflation rate by roughly 2 percent a
year. (AAAS and the federal government use the economy-wide GDP deflator
to adjust R&D dollars for inflation.)
Most NIH institutes see budget cuts in a narrow range between 0.4 and
0.7 percent, even before factoring in a roughly 2 percent inflation rate.
The National Institute of Allergy and Infectious Diseases (NIAID), home to NIH’s biodefense effort, is one
of only two institutes with more money than last year with a small 0.3 percent
increase to $4.4 billion. The steepest cut among the institutes goes to the National
Center for Research Resources
(NCRR) budget with a 1.4 percent drop to $1.1 billion because of the
elimination of a $30 million program for extramural facilities construction. This
program had funded competitively awarded construction grants and was the only
federal funding source for non-biodefense biomedical
research facilities. Buildings and Facilities funding, for NIH intramural
facilities, falls 26.5 percent to $82 million as the renovation and
construction of biodefense facilities ramps down.
The
only significant increase goes to the Office of the Director (OD) with
a 33.5 percent boost to $478 million, but primarily because Congress
transfers $97 million from the Office of the HHS Secretary to NIH.
The Office of the Secretary requested $97 million (see Table
2) for transfer to NIH to spend on developing medical countermeasures
against nuclear, radiological, and chemical terrorist attacks, nearly
double last year’s funding level because of the introduction of chemical
countermeasures to the 2006 program. Congress bypasses the Office of
the Secretary and gives the requested funds directly to NIH (see Table
1). But after excluding the transfer, the remaining increase for
OD is still a substantial 8 percent to boost OD funding for clinical
research, high-risk basic research, and collaborative research in the
NIH Roadmap for Biomedical Research.
The Roadmap could receive up to $333 million in FY 2006 (up 41 percent),
with $83 million from OD and $250 million coming from other institutes’
budgets, with their contributions going from 0.63 percent of institute
budgets to 0.89 percent in 2006.
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, could receive more than half the Roadmap funding with as much
as $169 million, up from $135 million last year. Research Teams of the
Future, aimed at encouraging interdisciplinary research and high-risk
basic research, could receive $44 million. The goal of Re-engineering
the Clinical Research Enterprise, focused on enhancing clinical research
training and clinical research networks, could double to $120 million
next year.
Biodefense R&D continues to be a high priority in the NIH portfolio. NIH
identifies $1.7 billion for biodefense R&D
in FY 2006, essentially unchanged from last year. But a decline in biodefense laboratory construction funding allows for a 7
percent increase in biodefense R&D grants
and contracts to a total of $1.7 billion, plus another $97 million in
mostly biodefense funding transferred from the Office of the Secretary.
After providing $148 million in 2005 to fund extramural construction
for biosafety level (BSL) 3 and 4 laboratories
around the nation, NIAID construction funding ramps down to $30 million
in 2006.
HIV/AIDS research continues to be another focus area in the budget.
The HIV/AIDS R&D portfolio was slated to expand 0.4 percent to reach
$2.9 billion, but the across-the-board cut will most likely result in
a slight cut in 2006. The majority ($1.5 billion) of this research would
be funded by NIAID, the lead institute for AIDS research.
Congress failed
to act this year on separate legislation to change the current Bush
Administration policy on federal funding for human embryonic stem cell
(HES) research. Although the Senate version of the bill strongly
urged the Administration to modify the current policy to allow for an
expansion of federal funding, and criticized NIH’s implementation of the current policy for leading to
only $24 million in NIH funding in 2005 for HES research, the Senate
failed to take up a House-passed bill that would change the current
policy and postponed action until early 2006. The House-passed bill
would expand NIH funding for embryonic stem cell research beyond the
currently approved lines to lines derived after the August 2001 cut-off
date of the current policy.
NIH Funding Mechanisms
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. Earlier
this year, NIH had projected
a decline in the number of Research
Project Grants (RPGs) for the second year in a row based on the NIH request,
but the 1 percent across-the-board cut could further reduce RPGs. RPG funding would have increased by 0.4 percent
in FY 2006 to reach $14.9 billion, but the final appropriation will
most likely lead to a 0.6 percent or so cut in RPG funding. The final
appropriation will result in even fewer than the projected 36,666 RPGs,
compared to roughly 37,000 last year and 2004 (see Figure 2). Because
RPGs are multi-year grants, the number of new grants initiated
in FY 2006 was already projected to be smaller, and could shrink even
further to well below the 10,020 awarded in 2004.[NIH recently announced
that non-competing awards (the second or later years of a multi-year
grant) will be reduced by 2.35 percent from funding levels previously
promised, and that the average new grant will be flat with the FY 2005
average. - revised 1/11]
NIH also projects a decline in the success rate for new grant applications
for the fifth year in a row to 21 percent in 2006, down steeply from
a high of 32 percent in FY 2001 (see Figure 2) because recent surges
in the number of applications have outpaced the number of grants awarded.
The success rate could dip below 20 percent in 2006 after institutes
factor in the 1 percent across-the-board cut. 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.
Figure 2. (click on the image for PDF)
Even before the NIH budget was finalized, the FY
2006 request estimated that nearly every institute would fund a smaller
percentage of proposals in FY 2006 than in the past. Expected success rates vary by institute,
from a low of 15 percent (NIBIB) to a high of 36 percent for NCRR. Among
the largest institutes, the National Cancer Institute (NCI) expects
a success rate of just one in five applications (19 percent), down steadily
from 33 percent in 1998 before the doubling campaign. The National Heart,
Lung and Blood Institute (NHLBI)’s 25 percent success rate may be high
among the institutes in 2006, but would be down from 36 percent five
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 19 percent
expected success rate in FY 2006 would represent a steady downward trend
from 43 percent in 1997. The projected success rates could go even lower
once institutes factor in the 1 percent across-the-board cut. Every
NIH institute (except NIEHS) would have a lower success rate in FY 2006
than in at least one of the years before the NIH doubling campaign.
Figure 3. (click on the image for PDF)
R&D in Other HHS Agencies
Total R&D
in the Department of Health and Human Services (HHS) is $29.0 billion
in FY 2006, a slight cut of 0.2 percent (see Table
2). NIH dominates the HHS R&D portfolio, but the rest of HHS
(excluding NIH) funds a still-substantial $1.3 billion in R&D in
FY 2006, a cut of 2.0 percent. The entire apparent cut is due to the
transfer of medical countermeasures R&D from the Office of the Secretary
to NIH; overall, HHS R&D outside NIH wins an increase because of
the last-minute infusion of emergency funding to combat a possible U.S.
outbreak of avian flu. Although nearly all of the $3.8 billion avian
flu spending package attached to the final Defense bill is for non-R&D
activities such as countermeasures procurement, health infrastructure
upgrades, and health monitoring, the Centers for Disease Control and
Prevention (CDC) receives $50 million to upgrade its R&D facilities,
the Food and Drug Administration (FDA) receives $18 million for R&D
and facilities related to flu, and the Office of the Secretary receives
an estimated $80 million within a larger $3.3 billion flu appropriation
for avian flu-related research. Without the estimated $148 million in
flu R&D, HHS R&D would join NIH in suffering budget cuts in
2006.
Funding Impacts
and Next Steps
The final 2006
budget leaves NIH with less money in real terms than in 2003, signaling
a retreat from the funding levels reached in the NIH doubling campaign.
Although other R&D funding agencies have struggled to maintain their
budgets over the past decade, NIH until recently enjoyed extraordinary
success on Capitol Hill, and its budget growth accelerated between FY
1998 and 2003. As shown in Figure 1 and Figure 3, NIH enjoyed steady
growth in its budget for many years. NIH’s budget growth accelerated during the NIH doubling campaign
(in non-inflation adjusted terms) in the five years to FY 2003, but
then abruptly halted. Much of the recent growth in NIH has been in biodefense research, funded primarily by the National Institute
of Allergy and Infectious Diseases (NIAID). As a result, the NIAID budget
has grown far faster than other institutes’ budgets to become the second-largest
institute (see Figure 3). But the recent slowdown in NIH budget growth
combined with continuing growth at NIAID means that, in real terms,
all the other NIH institutes collectively have seen their budgets
decline every year since 2003 (see Figure 3).
NIH continues to
invest more than 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 small shares of a large total.
Figure 4. (click on the image for PDF)
As shown in Figure
4, 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 2006, NIH alone is expected
to fund 48 percent of all federal support for basic and applied research,
down slightly from 2005 because of the budget cuts.
NIH alone now accounts for two-thirds of all federal support for R&D
in colleges and universities. Figure
5 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 5) 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. Because of budget cuts,
universities and colleges and medically oriented nonprofits can expect
falling federal R&D support in FY 2006 after many years of gains.
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 2006 budget provides $220 million for NIH’s
Institutional Development Award (IDeA) program,
down slightly from last year. 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.
Figure 5. (click on the image for PDF)
Now that the FY 2006 budget is final, NIH
institutes face the difficult task of allocating budget cuts among its
funding mechanisms, juggling variables such as grant size, grant numbers,
grant duration, and the mix of funding mechanisms. Because the Bush
Administration has continued to emphasize its goal of flattening or
reducing domestic discretionary spending in 2007 and future budgets,
the FY 2007 budget request, due in early February, is unlikely to offer
better news for NIH.
-
December 22, 2005
(This analysis is one of a series of AAAS R&D Funding
Updates on FY 2006 congressional appropriations. The complete series
of AAAS R&D Funding Updates, including continually updated analyses
of R&D in FY 2006 appropriations, is available on the AAAS
R&D Web Site (http://www.aaas.org/spp/rd) in the "FY
2006 R&D" or the "What's New"
sections.)
AAAS R&D Budget and Policy Program
1200 New York Ave, NW
Washington, DC 20005
(202) 326-6607; -6600
AAAS R&D
Web site: www.aaas.org/spp/rd
