analysis is a preview of the NIH / HHS chapter in the forthcoming AAAS Report
XXXI: Research and Development FY 2007, a comprehensive look at the President's
budget for R&D in FY 2007. This analysis contains revised AAAS estimates of
NIH and HHS R&D, different from figures originally presented in the President's
budget. More tables and continually updated supplemental materials on R&D
in the FY 2007 budget can be found on the AAAS R&D Web site at http://www.aaas.org/spp/rd.)
The National Institutes of Health (NIH) would have flat funding for the second
year in a row in the proposed FY 2007 budget. After falling for the first
time since 1970 in 2006, the 2007 request would keep the NIH budget exactly even
at $28.6 billion (see Table II-9). 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
5.3 percent based on economy-wide inflation.
Only three NIH ICs would receive increases in the 2007 budget. The
National Institute of Allergy and Infectious Diseases (NIAID), home to NIH’s biodefense effort, would increase
slightly by 0.3 percent to $4.4 billion, but would remain below the 2005 funding
level. The Fogarty International
Center would receive a 0.5 percent
increase back to the 2005 funding level. But the Office of the Director (OD; up
$140 million or 26.6 percent) budget would increase dramatically because of increases
for the two NIH priorities of biodefense R&D and
the NIH Roadmap for Biomedical Research.
Nearly all other NIH IC’s would see their budgets decline between 0.5 and 0.8
percent, after a similar cut in 2006 (see Table II-9).
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
barely increase by $5 million (0.0 percent) to $27.8 billion (see Table
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 (see Table II-10).
R&D in the other Department of Health and Human Services (HHS) agencies combined
would fall 4.1 percent to $1.3 billion (see Table II-8).
All HHS agencies would have either flat or declining R&D funding in the 2007
Overview of the FY 2007 NIH Budget
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.
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The FY 2007 NIH request of $28.6 billion would be exactly even with the
2006 budget, and would be down $66 million from the 2005 budget (see Table
II-9). Last year, the Bush Administration
requested a slight increase for NIH, but Congress wound up appropriating the first
cut in the NIH budget since 1970. There would be similar trends for NIH’s R&D investments. 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 $27.8 billion next year, again flat compared to 2006 and down
from 2005. 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, and reversed in 2006. The 2007 budget would continue the downward trend.
Within an overall domestic budget that would decline for the second year in a
row, NIH would actually do better than most other discretionary health programs.
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
(see Figure 1). The 2007 NIH budget would be 5.3 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 index that attempts to calculate the inflation rate 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 budget would be nearly
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 Budget
NIH budget is actually appropriated in 26 separate budget accounts, roughly corresponding
to NIH’s institutes and centers (IC’s; see Table
II-9). 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.
the FY 2007 budget, all but three IC’s would see their budgets decline for the
second year in a row. Among the 20 independent institutes, only the National
Institute of Allergy and Infectious Diseases (NIAID) would receive even a slight
increase of 0.3 percent, but its budget would still remain below the 2005 level.
The 19 other institutes would see their budgets decline between 0.2 and 0.8 percent
for the second year in a row. The Fogarty International Center (FIC) would receive
a slight 0.5 percent increase that would match an equally sized cut in 2006, while
the three other centers’ budgets would fall for the second year in a row.
the Office of the Director (OD) would see its budget increase significantly in
2007. The OD budget would climb $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, brining total OD investment to $160 million. The remaining $29
million OD increase in 2007 would go to expand the NIH Roadmap for Medical Research
of stagnant and declining funding in recent budgets and the 2007 request, 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
$4.4 billion 2007 request, 5.1 percent below its 2004 budget in real terms. (The
losses would be even greater if calculated with the biomedical research BRDPI
NIH Funding Mechanisms
majority of NIH’s budget is distributed to external performers through
Research Project Grants (RPG’s), which are investigator initiated, peer reviewed,
and competitively awarded throughout the NIH budget (see Figure 2). NIH projects
a decline in the number of RPG’s for the third year in a row in 2007, down steadily
from a high of 37,060 in 2004 down to a projected 35,805 next year (see Table
II-10 and Figure 3). Because of a large number of existing RPG’s ending in
2006, NIH expects to offer 9,337 new RPGs in 2007, up
275 from this year, but the trends are clearly downward from the more than 10,000
new grants awarded in both 2003 and 2004. (RPG’s last 3.7 years on average, and
nearly all are funded a year at a time in successive budgets.)
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funding for RPG’s would be $14.5 billion in 2007, down 1.6 percent after a slightly
smaller cut in 2006 (see Table II-10). Tight budgets
would force NIH to reduce the average size of both new and continuing grants.
Although the average RPG would be a projected $405,500 in 2007, up slightly from
previous years, in real terms the average RPG would continue to lose ground to
inflation (see Figure 3), and NIH warns researchers that they are unlikely to
see any inflationary adjustments in 2006 and 2007 for the second or later years
of their grants.
new grantees in 2007, the picture looks bleaker. The average new RPG could fall
to $350,400 in 2007, the lowest since 2003. Although much of the fall would be
due to unusually large HIV-related grants awarded in recent years transitioning
to continuing status in 2007, the average new grant would continue to lag well
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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 (see Figure 3) because recent surges in the number of applications
have far outpaced the number of grants awarded. Although the number of RPG’s increased
from 25,000 in the early ‘90s to more than 35,000 (see Figure 3), 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.
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.
also distributes about 10 percent of its budget through R&D contracts (see
Table II-10 and Figure 2). Funding for
R&D contracts would continue to increase, by 1.6 percent to $2.7 billion in
FY 2007. 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. Expanded contract awards for genetic research would keep this funding
stream increasing in 2007.
funding of research centers would also continue to grow in FY 2007, by 2.3 percent
to $2.8 billion, for support of 1,373 centers, down slightly from recent years.
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 of the total NIH budget in FY 2007.
institutes also operate an enormous federal research enterprise, mostly in Bethesda,
MD. Intramural research would total $2.8 billion
in 2007, down 0.3 percent after a similarly sized increase in 2006, keeping the
intramural portfolio at the historic level of roughly 10 percent of the NIH budget.
NIH is heavily involved in research training of the next generation
of biomedical researchers. Research training programs would receive $760 million
in FY 2007, down slightly from the current year (see
Table II-10). Tight budgets would keep NIH at approximately
17,500 full-time training positions for another year. Stipends for predoctoral
and postdoctoral trainees would stay flat, with no adjustments for inflation.
new program to encourage new investigators would launch in FY 2007. Pathways
to Independence, starting up with
$15 million, would provide up to 5 years of support for scientists just beginning
their research careers. These awards, which combine research and training support,
are designed to transition scientists from mentored research to independent research
and would go partway to alleviating the great difficulty that new investigators
have in winning their first full NIH grants. (The $15 million in new funding would
make up most of the $21million increase in “Other Research” (see Table
NIH Priority Areas
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 (see Table
II-10). 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.
the three large themes in the Roadmap, Research Teams of the Future, aimed at
encouraging interdisciplinary research and high-risk basic research, would receive
the largest increase to $81 million (up 84.5 percent). The majority of this funding
would go toward interdisciplinary research centers and interdisciplinary research
training, with another large portion going to the NIH Director’s Pioneer Awards,
five-year awards to individual investigators to encourage high-risk basic research.
The goal of Re-engineering the Clinical Research Enterprise, focused on enhancing
clinical research training and clinical research networks, would climb 54 percent
to $181 million. The New Pathways to Discovery theme would increase 8.1 percent
to $181 million for its diverse portfolio of programs, ranging from funding of
molecular libraries to nanomedicine to computational
biology, all centered on cutting-edge research to build biological databases and
other research tools that could benefit all biomedical research.
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 also requests $96 million, the same as the current year, for
an R&D program on radiological and nuclear countermeasures.
HIV/AIDS research continues to be another focus area in the budget.
The HIV/AIDS R&D portfolio would decline slightly by 0.5 percent to $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 2007 budget is $100 million 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.
emerging threat of pandemic flu also receives attention in the NIH budget, and
would increase within a flat budget. The 2007 budget proposes $199 million for
pandemic influenza research, up $35 million from the current year. The research
would focus on developing and testing candidate vaccines and treatments, expanding
clinical trials in Asia, and other studies.
would also start a new Genes, Environment, and Health initiative in 2007 with
a $68 million request to build on some 2006 exploratory studies. The initiative
would examine the complex interplay of genetic and environmental factors in disease
and would involve several IC’s.
NIH Performers and Character of Work
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.
classifies the majority of its budget as basic research, $16.0 billion out of
$28.6 billion in FY 2007 (up 0.2 percent). NIH is by far the largest federal supporter
of basic research, and in FY 2007 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, a proposed $11.7 billion in FY 2007 (down
0.2 percent). Taken together, NIH would fund 51 percent of all federal basic and
applied research in the 2007 budget.
would fund $114 million in R&D facilities and capital equipment in FY 2007,
down slightly from the current year but less than half the $297 million investment
in 2005 and far below the $1.1 billion investment in 2003, because a major effort
to renovate and construct biodefense laboratories launched
in the aftermath of the 2001 anthrax attacks is winding down. Much of this funding
comes from the Buildings and Facilities account, which would remain at $81 million;
in 2003, this account was $639 million because of large biodefense facilities construction projects. Most of these
facilities are now nearing completion. The B&F appropriation funds intramural
construction at NIH facilities, while in the NIAID budget there would be $25 million
for extramural biodefense construction grants to finish
several laboratories around the country. The remaining $8 million in facilities
funding would come from the National Cancer Institute to renovate its laboratory
facilities in Frederick, MD.
R&D in Other HHS Agencies
R&D in the Department of Health and Human Services (HHS) would be $29.1 billion
in FY 2007, a slight cut of 0.2 percent after a similar cut in 2007 (see Table
II-8). 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 4.1 percent. All HHS agencies including NIH would see their R&D funding
remain flat or decline, consistent with an overall declining discretionary health
budget. (More details on HHS agencies will be available in later analyses.)
Outlook for the NIH Budget
physical sciences research would be a high priority in the FY 2007 budget, biomedical
research would share the fate of other domestic programs in tight budgetary conditions.
Recent flat and declining budgets for NIH are a sharp contrast from the 15 percent
annual increases during the NIH doubling period of 1998 to 2003. Looking to the
future, the Bush Administration’s outyear budget projections
show that in the push to reduce the budget deficit in half over the next few years
NIH will be one of the agencies slated to sacrifice. Although key physical sciences
research agencies would see their R&D budgets increase in 2008 and beyond,
the NIH budget is projected to fall in 2008, 2009, and 2010 before rebounding
slightly in 2011, but only to $27.9 billion, well below the current level. After
adjusting for inflation, the NIH budget could fall a further 12 percent over the
next five years. While Congress will try its best to boost the 2007 request when
it begins the FY 2007 appropriations process in late spring, it is worth remembering
that in a similar situation last year Congress ended up turning a small requested
increase into a final cut.
materials on R&D in the FY 2007 budget, historical data and charts, and more
information on AAAS Report XXXI: Research and Development FY 2007, can
be found on the AAAS R&D Web site at http://www.aaas.org/spp/rd.)
February 23, 2006
AAAS R&D Budget and Policy Program
1200 New York Avenue,
Washington, DC 20005
AAAS R&D Web site: http://www.aaas.org/spp/rd