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1. NIH R&D in FY 2007 House Appropriations -Table
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Highlights -
The House would endorse the Bush Administration’s proposal to cut nearly all
National Institutes of Health (NIH) institute and center budgets for the second
year in a row. After falling for the first time since 1970 in 2006, the 2007
House appropriation would make another small cut in 2007 for a total NIH budget
of $28.5 billion (see Table 1). All but three of NIH’s
institutes and centers (IC’s) would see their budgets shrink for the second year
in a row. -
NIH would continue to fall well behind its own calculations of biomedical research
inflation, estimated at 4.1 percent this year and 3.8 percent in 2007. The NIH
budget would fall 11 percent from 2004 to 2007 based on these calculations, and
nearly 6 percent based on economy-wide inflation. -
Only three NIH IC’s would receive increases in the 2007 budget. The
House would move some facilities funding from the National Institute of Allergy
and Infectious Diseases (NIAID) to the National
Center for Research Resources (NCRR)
in 2007 to allow for a 2.2 percent increase. The Fogarty
International Center
would receive a 0.5 percent increase back to the 2005 funding level. The House
would endorse a large proposed increase for the Office of the Director (OD; up
$140 million or 26.6 percent) budget to fund increases for the two NIH priorities
of biodefense R&D and the NIH Roadmap for Biomedical
Research. -
Biodefense R&D would total $1.9 billion in FY 2007,
an increase of $110 million or 6.2 percent in an otherwise lean NIH budget. The
entire increase would go to OD for its Advanced Development fund (up $110 million
to $160 million) to develop biodefense countermeasures. Other NIH biodefense
funding, mostly in NIAID, would remain flat. Funding for the other key NIH priority,
the NIH Roadmap, would increase dramatically by $113 million or 34.4 percent to
$443 million in 2007. - NIH R&D funding, 97
percent of the total NIH budget except for training and some overhead costs, would
fall $91 million (0.3 percent) to $27.7 billion (see Table 1) in the House appropriation.
-
Because of these flat to declining budget trends, NIH projects that it
will fund only 19 percent of all research project grants (RPG) applications in
2006 and 2007. While the number of new grants would increase
slightly in the 2007 budget, the total number of RPG’s would continue to slide,
as would the inflation-adjusted size of the average research grant. -
R&D in the other Department of Health and Human Services (HHS) agencies combined
would fall 3.2 percent to $1.3 billion (see Table 2).
All HHS agencies except the Food and Drug Administration would have either flat
or declining R&D funding in the 2007 House appropriation. NIH R&D in FY 2007 House Appropriations On
June 13, the House Appropriations Committee approved its version of the FY 2007
Labor-HHS appropriations bill (HR 5647), which provides funding for the Departments
of Labor, Health and Human Services, and Education. The bill funds R&D in
the Department of Health and Human Services (HHS), including the National Institutes
of Health (NIH). [But the House leadership is considering delaying a House vote
on the bill until well into fall to avoid intense political battles over the bill
between fiscal conservatives, Republican moderates, and Democrats. So these spending
allocations could be the only signal of House intentions for HHS spending until
well into the new fiscal year.] Except for some minor changes, the draft House bill would approve NIH’s own request for FY 2007 calling for nearly all of NIH’s institutes and centers’ budgets to fall for the second
year in a row. The House would allocate
a small cut to the NIH for the second year in a row for a total NIH budget of
$28.5 billion, $99 million or 0.3 percent below this year’s funding level (see
Table 1). The
apparent cut is due to a $100 million shift in Global Fund for HIV money from
the NIH budget to a different appropriation; without the shift, NIH funding would
be exactly this year’s funding level in the House appropriation. 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 would
total $27.7 billion next year, again a slight cut for the second year in a row.
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, and slowed even further to 2.2 percent in 2005,
reversed in 2006 and will likely continue to slide in 2007. 
Figure
1. (click on the image for PDF) After
several years of gains, 2007 would be the third year in a row that NIH would lag
behind inflation in the economy as a whole, projected at 2.2 percent next
year if the House appropriation prevails (see Figure 1). The 2007 NIH budget would
be nearly 6 percent below the 2004 peak after adjusting for inflation. But NIH
would fall even further behind in its own calculations of biomedical research
inflation. NIH calculates a Biomedical Research and Development Price Index (BRDPI),
an inflation index for goods and services purchased by the NIH budget. Recently,
NIH projected the BRDPI increase for FY 2007 to be 3.8 percent after a 4.1 percent
increase in 2006. In recent years, the BRDPI inflation rate has outpaced the economy-wide
inflation rate by roughly 2 percent a year. Using BRDPI, the 2007 House appropriation
would be 11 percent less than the 2004 budget in biomedical inflation-adjusted
terms. (AAAS and the federal government generally use the economy-wide GDP deflator
to adjust R&D dollars for inflation.) NIH Institutes in the FY 2007 House Appropriation The
NIH budget is actually appropriated in 26 separate budget accounts, roughly corresponding
to NIH’s institutes and centers (IC’s; see Table 1). There are
20 institutes with separate budgets, along with four centers, an Office of the
Director (OD), and a Buildings and Facilities account. There are three other centers
that are not separately budgeted. In
the FY 2007 budget and now the House appropriation, all but three IC’s would see
their budgets decline for the second year in a row. In the House, all of the
20 independent institutes would see budget cuts for the second year in a row,
mostly between 0.2 and 0.8 percent. The largest cut, of $113 million, would be
for the National Institute of Allergy and Infectious Diseases (NIAID), but only
because of transfers: the House would shift $100 million in NIAID funding for
the Global Fund for HIV/AIDS, Malaria and Tuberculosis out of NIH to another appropriations
bill, and would also shift $25 million in facilities funding to the National Center
for Research Resources (NCRR). After adjusting for these transfers, the NIAID
budget would actually increase slightly. NCRR was slated for a cut, but the House
would transfer $25 million in facilities funding from the National Institute of
Allergy and Infectious Diseases (NIAID) to NCRR for a net $24 million or 2.2 percent
gain for that center. The Fogarty International Center (FIC) would receive a slight
0.5 percent increase that would match an equally sized cut in 2006, while the
two other centers’ budgets would fall for the second year in a row. [In
a rare legally binding designation of funds, the House would mandate $69 million
for the National Children’s Study in 2007 in a reaction against NIH’s
proposal to eliminate funding. The multi-year study, funded by the National Institute
of Child Health and Development (NICHD), is currently in its early stages but
NIH proposed to end further work because of its tight budget situation and looming
future costs of enrolling 100,000 children in the long-term study. The House bill
does not add any money to the NICHD request, so the $69 million carve-out would
require cuts in other parts of the NICHD budget. Although Congress often provides
non-binding guidance to NIH on diseases or programs it should consider spending
additional resources on, rarely does the Labor-HHS appropriations bill contain
a specific allocation for a program in the legal text of the bill.] [The
House bill would also require NIH-funded researchers to submit electronic versions
of their final published research papers to NIH as soon as possible but no later
than 12 months after publication, so that NIH-funded research results can
be freely accessible to the public in NIH’s PubMed
Central digital archive. The legally binding language follows non-binding report
language in previous appropriations bills calling on NIH to make PubMed Central a central, open-access repository for all NIH-funded
research findings. In response to the earlier language, NIH released a policy
last year calling on all NIH-funded researchers to submit their manuscripts to
PubMed Central after publication, but made submission
voluntary. Apparently frustrated by the low percentages of researchers who have
done so, House appropriators would make submission within a year of publication
mandatory.] Only
the Office of the Director (OD) would see its budget increase significantly in
2007. The House agrees with NIH’s proposal to boost
the OD budget by $140 million or 26.6 percent to $668 million in 2007, after a
similar increase in 2006. In both 2006 and 2007, the bulk of the increases would
go to biodefense and other terrorism research. In 2006, OD takes
over responsibility for a $47.5 million radiological and nuclear countermeasures
portfolio from the Office of the HHS Secretary, and a $50 million biodefense
countermeasures development fund from NIAID. The 2007 budget would add $110 million
in new funds for the Advanced Development fund for biodefense
countermeasures, bringing total OD investment to $160 million. The remaining $29
million OD increase in 2007 would go to expand the NIH Roadmap for Medical Research
(see below). Because
of stagnant and declining funding in recent budgets and now for 2007, all NIH
IC’s, except the Office of the Director, have lost ground significantly in inflation-adjusted
terms (see Figure 1). The largest institute, the National Cancer Institute (NCI),
would see its budget decline 0.8 percent in 2007 down to $4.8 billion. After factoring
in (economy-wide) inflation, the NCI budget would be 6.8 percent below the 2004
funding level. The National Heart, Lung, and Blood Institute (NHLBI) would have
0.7 percent less than the current year for $2.9 billion in 2007, a 6.4 percent
inflation-adjusted loss compared to 2004. The other NIH institutes would see similar
losses. Even NIAID, which received billions of dollars in additional funds in
the aftermath of the fall 2001 anthrax attacks to become the second-largest NIH
institute, has lost ground in more recent years with a $4.3 billion in the 2007
House appropriation, 5.1 percent below its 2004 budget in real terms excluding
the effects of the Global Fund transfer. (The losses would be even greater if
calculated with the biomedical research BRDPI inflation index.) NIH Funding Mechanisms From
funding an average of 1 out of 3 grant applications earlier in the decade, NIH
now expects to fund fewer than 1 in 5 applications. NIH
projects a decline in the success rate for new grant applications for the sixth
year in a row to 19 percent in 2006 and 2007, down steeply from a high of 32
percent in FY 2001 because recent surges in the number of applications have far
outpaced the number of grants awarded. Several NIH institutes would see success
rates well below the 19 percent NIH-wide average. The largest National Cancer
Institute, already facing a 20 percent success rate in 2005, projects a decline
to 16 percent in the 2007 budget. The National Institute of Neurological Disorders
and Stroke (NINDS), most recently at 22 percent in 2005, projects only a 15 percent success rate in the 2006 and 2007
grant competitions. NIH Priority Areas NIH
continues to expand funding for clinical research, high-risk basic research, new
research tools, and multidisciplinary collaborative research in the NIH Roadmap for Biomedical Research. The total roadmap, after increasing
from $240 million to $329 million within a declining total NIH budget in 2006,
would increase another $113 million or 34.4 percent to $443 million in 2007 in
both the request and the House appropriation. The Roadmap would continue to be
managed in the Office of the Director, and OD would provide the largest single
contribution with $111 million in 2007 (up 35 percent). The remaining Roadmap
funds would come from a transfer of 1.2 percent of each IC’s budget (up from 0.9
percent in 2006), totaling $332 million (up 34 percent). Various parts of the
Roadmap are then parceled out for selected ICs to administer. Biodefense R&D continues to be the other expanding priority in the NIH portfolio.
NIH would devote $1.9 billion for biodefense R&D
in FY 2007, up $110 million or 6.2 percent from the current year. The entire $110
million increase would go to the Advanced Development fund in the Office of the
Director (OD). The fund, which OD inherited from NIAID in 2006 at a level of $50
million, would increase to $160 million to develop new biodefense countermeasures which could eventually wind up
in the Strategic National Stockpile for use after a terrorist attack. The additional
funds would go primarily toward vaccines and treatments for anthrax and smallpox.
Of the remaining biodefense portfolio, all except a
small construction investment would go to competitively awarded research grants
and contracts, mostly from NIAID. In addition to the biodefense investment, NIH OD would also receive $96 million,
the same as the current year, for an R&D program on radiological and nuclear
countermeasures. NIH
would fund $114 million in R&D facilities and capital equipment in FY 2007,
down slightly from the current year. Much of this funding comes from the Buildings
and Facilities account, which would remain at $81 million in the House appropriation
for 2007. The B&F appropriation funds intramural construction at NIH facilities,
while in the NCRR appropriation there would be $25 million for extramural biodefense construction grants to finish several laboratories
around the country. R&D in Other HHS Agencies Total
R&D in the Department of Health and Human Services (HHS) would be $29.0 billion
in FY 2007 under the House Labor-HHS bill, a slight cut of 0.5 percent after a
similar cut in 2007 (see Table 2). NIH dominates
the HHS R&D portfolio, but the rest of HHS (excluding NIH) would fund a still-substantial
$1.3 billion in R&D in FY 2007, a cut of 3.2 percent. All HHS agencies would
see their R&D funding remain flat or decline except for an increase in the
Food and Drug Administration (FDA), consistent with an overall declining discretionary
health budget. Impacts
of the NIH R&D Portfolio The
2007 House appropriation, if left unchanged on the House floor, would be a disappointment
to biomedical research advocates who had hoped that the House could add funds
to a flat 2007 request. The House appropriation would leave NIH with less money
in real terms than in 2003, signaling a retreat from the funding levels reached
in the NIH doubling campaign. The recent slowdown in NIH budget growth combined
with continuing growth at NIAID for biodefense research
means that, in real terms, all the other NIH institutes collectively have seen
their budgets decline every year since 2003 and would continue to do so in 2007
(see Figure 1). NIH
continues to invest more than 90 percent of its research portfolio in the life
sciences, nearly exclusively biology and medical research. Among other disciplines,
psychology research makes up 3 percent of the NIH portfolio but no other discipline
exceeds 2 percent. As
shown in Figure 2, NIH provides 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 a third of
all federal support. NIH is also a large supporter of social and behavioral sciences
research.  Figure
2. (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
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 17 percent of NIH R&D which goes to ‘other’
performers (see Figure 3) 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 and 2007 after many years of gains. Outlook and Next Steps [The
House was scheduled to debate and approve the Labor-HHS bill this month, but the
House leadership pulled the bill from the floor schedule indefinitely, and there
is talk that it will not come to the House floor until after the November elections,
well after the October 1 start of FY 2007. The Labor-HHS bill has always been
a difficult one to shepherd through the appropriations process, but it is unusual
for congressional leadership to essentially give up on its prospects this early
in the appropriations season. At this time, it is unclear whether the Senate will
go ahead in drafting its own version of the bill as scheduled in July.] If the
Labor-HHS bill continues to stall, then it could be months before NIH and its
constituencies receive any further signals on the agency’s fate in FY 2007. 
Figure
3. (click on the image for PDF)
(This analysis is one of a series
of AAAS R&D Funding Updates on FY 2007 congressional appropriations. The complete
series of AAAS R&D Funding Updates, including continually updated analyses
of R&D in FY 2007 appropriations, is available on the AAAS
R&D Web Site (http://www.aaas.org/spp/rd)
in the “FY 2007 R&D” or the “What’s
New” sections.)-
June 16, 2006 (revised June 21 - revisions in [ ] )
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