End of a Golden Era

After dream of doubled NIH budget, institutions awaken to lean budgets; grant renewal rejections stun many researchers.
July 5, 2006

When the National Institutes of Health budget doubled between the 1999 fiscal year and the 2003 fiscal year, many research institutions found themselves awash in funding as yearly budget increases of 15 percent became the norm.

But many researchers and institutions were unprepared, financially and psychologically, when the windfall ended. Funding has been stagnant since 2003, and the NIH took its first small cut since 1970 in the 2006 fiscal year. David Moore, senior associate vice president for government relations at the Association of American Medical Colleges, said that, if the president’s 2007 fiscal year budget is adopted, NIH will have 11 percent less purchasing power than in 2003, and the forecast calls for several more years of decline.

Additionally, more hands are reaching for the downsized cookie jar. Moore said that the doubling led institutions to increase infrastructure and hire new faculty members, leading to more grant applications. That drove the application success rate from 30 percent in the 2003 fiscal year, according to NIH data, to about 22 percent in the 2005 fiscal year. The success rate for the 2006 fiscal year is projected to be under 20 percent. “To a certain extent,” Moore added, the current research community “is a victim of the success of the doubling.”

An NIH report on the president’s 2005 fiscal year budget said that “the agency entered the post-doubling period far stronger and better positioned to improve health through advances in research.” But, with the advantage of 20-20 hindsight, experts say that steady increases over a longer period of time would have been preferable to the feast-followed-by-famine approach.

At Case Western Reserve University, a decline in NIH funds contributed to a budget shortfall of $17 million below projections for the 2006 fiscal year. NIH funds are key at Case -- and at many institutions the NIH is the largest outside source of research support.

While NIH officials have touted the fact that the number of new competitive grants will increase next year, they are slower to point out that a decline in the number of renewals for existing projects more than offsets the increases. Some projects that researchers thought were shoe-ins for refunding, such as the university Alzheimer’s Center that had been supported by NIH since 1988, are among those that lost NIH funding.

Faculty members at Case got a rude awakening when administrators asked them to bargain shop for airfares and hotels when traveling to conferences. When the budget shortfall was announced last October, Ronald Wright, a microbiology professor and chair of the Faculty Senate, told Inside Higher Ed that “we all recognized what was happening in terms of federal funding, but some of us felt that, ‘we’ve been a very successful research university, we won’t get affected.’”

Kei Koizumi, director of the R&D Budget and Policy Program at the American Association for the Advancement of Science, said that “most of the biomedical research community would agree that slow and steady would have been better in retrospect.” Koizumi added that if the NIH had continued to increase at a rate of 6 or 7 percent each year, as it was in the early 1990s, the budget would be larger today than it actually is. “Collectively, institutions got a little carried away,” Koizumi said. Some erected new facilities that created huge demands for staffing, equipment and maintenance. “They looked at the doubling trajectory and assumed the NIH budget would be much higher today than it turned out to be. If you made plans … you may have trouble filling that lab space.”

Between 1998 and 2002, the University of California at Irvine experienced a 127 percent increase in NIH funding, bringing the university total to just over $110 million.

Bill Parker, Irvine’s vice chancellor for research, said that nobody expected NIH budgets to continue increasing at 15 percent a year, but that some transition to smaller increases would have been nice. Parker said that Irvine didn’t create any major new buildings, but that the University’s Chao Family Comprehensive Cancer Center “will have to look at fund raising or internal funds.”

While some institutions might be struggling to maintain expanded infrastructure, just about all see the need for some maintenance to faculty psyche.

In October, Wright described a feeling among some veteran researchers of  “‘Why should I knock myself out when I know it won’t be refunded in this atmosphere?’” he said.

Parker said that Irvine “went through a period where faculty who had longstanding -- like 15-year -- support, from NIH, all the sudden got rejections.”

Like other research institutions, Irvine gave bridge grants so that faculty members could keep their labs open for six to nine months while they incorporated suggestions made by grant application reviewers and resubmitted. (NIH gives applicants three tries). Also, Parker said, “we’ve had to be a little more helpful to beginning faculty.” Parker said that scientists have had to take more care to align their proposals with NIH priorities, and that there’s no getting around the fact they just have to brace for a tougher landscape. “In a competitive world, those that enjoy the competition rise to the top,” he said.

Peggy Newell, vice provost of Tufts University, said that Tufts has added staff and administration to help with grant writing and support for putting together major proposals. “Morale is difficult for people,” Newell said, “when you think about all of the effort that goes in to putting together a grant proposal, and to have the likelihood of success for that proposal be so low, and decreasing, is hard for everyone in science.”

Newell added that NIH wants to see institutional commitment to a particular field of research before it pours money into a university, “and when you’re not getting as many dollars to help support research infrastructure that you built, that becomes more difficult.”

Newell said that institutions are looking more to foundations and donors, as well as to corporate sponsorship. “Although that hasn’t increased in recent years either,” she said.

William Elger, chief financial officer of the University of Michigan Medical School, said that the NIH doubling had a stated end, so institutions really should have known that things would change. Elger advocates that universities adopt some of the financial practices of industry to get the most bang for their bucks. “If you go to Johnson & Johnson, or Pfizer, and say, ‘how do you run a research institute?’ you’ll see some differences,” Elger said. “You’ll see things like more sharing of common equipment. Space is assigned and utilized on how it’s needed, rather than just because you’re a professor you’re entitled to so many square-feet.”

Elger added that the doubling was “driven on, ‘if we could just increase the pace of funding,’ there were a lot of promises on what kind of cures could be delivered,” he said, “and I’m not sure how well that’s been delivered.” He said that research institutes should formulate longer term plans that aren’t beholden to federal funding for survival. Elger pointed out that pharmaceutical companies commercialize enough of their own research and development to then fund more of their own research and development, whereas academics “do R and D and then they give it away. There’s commercialization value there.”

Newell said that banking on technology transfer money, though, is tricky in the academy, especially with basic research, because “there’s a lot of luck involved,” she said. “You can’t turn an invention that’s not ready to make a lot of money into a lot of money.”

Elger said that he’s learned to watch his mouth when trying to adopt some practices from business. “If I said, ‘key performance indicators,’ which is a business term, ‘performance’ isn’t well received by faculty. If I say ‘key success factors,’ it gets perceived a little differently.”  


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