1. NIH in the Post Doubling Era: Realities and Strategies for the Future Elias A. Zerhouni, M.D. Director National Institutes of Health

2. NIH Budget Facing a “Perfect Storm” in 2006  Federal & Trade Deficits  Defense and Homeland Security needs  Katrina  Pandemic flu  Post Doubling effect  Physical Sciences focus  Biomedical research inflation

3. Competition for funds from the NIH and other sponsors, intensifying year by year, now stands at an unprecedented level, and shows no sign of abating. Never before have so many established investigators faced so much uncertainty about their longevity as active scientists. Never before have so many novices faced so many disincentives to entering or continuing a research career. Dr. William F. Raub, NIH Associate Director for Research and Training, strategy paper, 1982

4. The budget of NIH has doubled - but - Success rates have dropped by a third What is happening? The Apparent Paradox:

5. What Is Really Happening?  Facilities building and faculty growth throughout U.S. research institutions  100% growth in applications and 75% growth in applicants per year by 2007  Budget appropriations below inflation since 2003  Budget cycling phenomenon

6. 10 8 6 4 2 0 1990-19971998-20022003-2007 Dollars (in billions) 3.2B 5.4B 9.5B Year AAMC – Survey of Research Facility Investments (99 of 125 AAMC Member Schools) Data Based on AAMC Faculty Roster * Investment in Research Facilities at U.S. Medical Schools

7. Success Rates Applications Projected % Success Rate of Grants Funded 0% 5% 10% 15% 20% 25% 30% 35% 1998199920002001200220032004200520062007 0 10 20 30 40 50 60 +8,303 +8,359 31% 22% Number of Applications/Applicants (in thousands) National Research Capacity and Demand for Grants Surges at End of Doubling Period, Success Rates Fall 19% 43,069 24,154 49,656

8. Success RatesApplications Projected Number of Applications/Applicants (in thousands) % Success Rate of Grants Funded 0% 5% 10% 15% 20% 25% 30% 35% 1998199920002001200220032004200520062007 0 10 20 30 40 50 60 43,069 Applicants +5,334 +5,208 19% 31% 36,653 19,744 31,791 National Research Capacity and Demand for Grants Surges at End of Doubling Period, Success Rates Fall

9. 0% 5% 10% 15% 20% 25% 30% 35% 40% 199519971999200120032005 Applicant Applications Success Rate for R01 Equivalents Fiscal Year Success Rate files as of May 3, 2006. Program srf_indiv_060103_rfm Individuals are determined using the pi_profile_person_id in IMPAC-II What are My Chances of Being Funded? Success Rate per Application Understates Funding Rate per Applicant 22.3% 27.6% Percentile Payline does not Equal Success Rate

10. NIH’s Challenge: Maintain Research Enterprise Vitality in Light of Reduced Purchasing Power and Increased Demand Nominal funding Adjusted by BRDPI −8.3% loss in purchasing power since 2004 Note: BRDPI is the Biomedical Research and Development Price Index $25.7 B $28.6 B $28 B

11. The Budget Cycling Phenomenon: What Funds are Available in any One Year? NIH Appropriations Committed Funds Uncommitted Funds Budget Increase From ending grants started 4-5 years ago From current year to previous year Continuing grants

12. NIH Congressional Appropriations Billions of Dollars DOUBLING $13.7 $15.6 $17.8 $20.5 $23.3 $27.1 $28.0 $28.6 $0 $5 $10 $15 $20 $25 $30 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 ?

13. The Bottom Line: Demand for Grants “Took Off” Just as NIH Budget Was “Landing”!  Post doubling “boom” in applications has led to a supply/demand imbalance  Success rate drop is due to – Near 100% increased demand for grants – 40% increased costs of grants – Decrease in inflation adjusted budget  Budget cycling effect will slightly improve supply vs. demand of grants in 2007 and beyond Applications Budget

14. Common Misperceptions

15. 56.6% 53.9% 55.2% 56.4% 52.1% 53.0% 55.2% 55.8% 55.2% 56.1% 40.5% 39.2% 38.4% 38.5% 39.8% 40.8% 43.5% 41.0% 40.8% 5.0% 7.0% 3.7% 5.7% 5.5% 5.2% 4.8% 3.6% 3.1% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% FY 1998FY 1999FY 2000FY 2001FY 2002FY 2003FY 2004FY 2005FY 2006FY 2007 Basic ResearchApplied ResearchOther Common Misperception 1: NIH is Over-emphasizing Applied Research

16. Common Misperception 2: NIH is Shifting Towards Solicited Research 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1994199619982000200220042006 Fiscal Year Percentage of Grants UnsolicitedSolicited 91% 93% 9% 8%

17. Common Misperception 3: NIH Roadmap is Shifting Funds Away from Grant Pool Roadmap 1.2% Non-Roadmap 98.8% FY2006 Budget = $28.6 B  Developed to increase synergy across NIH  Not a single initiative but over 345 individual awards in FY 2005, 133 institutions, 33 states  Estimated in FY 2006: ― 51% basic ― 36% translational ― 13% high risk

18. Where Do We Go From Here? Adaptive Strategies Based on Key Principles

19. Discovery and Generation of New Knowledge Principle 1: Protect Core Values and Mission

20. Broadening the NIH Vision Neuroscience Blueprint Obesity Research Strategic Plan Image © Time magazine, June 2004 FY 2005FY 2006 Involves 19 Institutes and Centers Involves 15 Institutes and Centers Involves entire NIH Roadmap for Medical Research FY 2004FY 2007 Office of Portfolio Analysis and Strategic Initiatives Involves entire NIH

21. Balanced National Biomedical Research Portfolio NIH - $28B Clinical Research Basic Research Translational Research Private Sector - $59B Clinical Research Basic Research Translational Research

22. NIH Director’s Pioneer Awards  Support individuals with untested, potentially groundbreaking ideas in many areas of science, from neuroscience to chemistry to behavioral science  Highly competitive  465 applications for 7 funded awards in 2006  Institutes and Centers contributed to enable funding more awards, for a total of 13

23. Principle 2: Protect the Future  Five years of support consisting of two phases  Phase I provides 1-2 years of mentored support for advanced post doctoral fellows- 90k per year  Phase II provides up to 3 years of independent RO1 equivalent research support- 250k per year  NIH aiming for 150-200 awards per year –Received ~700 applications so far –First award announcements this Fall Pathway to Independence Award http://grants1.nih.gov/grants/new_investigators/index.htm

24. Principle 3: Focus on Balancing Supply/Demand  Actively manage supply/demand imbalance by adjusting programs  Recycle budgets into larger number of competing grants (+3% in 2007)  Prioritize projects to maintain reasonable investigator-initiated success rates  Maximize research and development activities by managing costs across all portfolios  Facilitate peer-review processes to reduce need for multiple applications

25. Misperceptions in the Media Declines in Funding NIH R01 Grants 9% 12% 38% 23% 35% 0% 5% 10% 15% 20% 25% 30% 35% 40% New Unamended applications not from PAs or RFAs New Unamended applications from PA's and RFA's Type 1 Amendments Competing Continuations and Supplements Total of all Applications Success Rates, FY 2005

26. 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 19981999200020012002200320042005 Fiscal Year Number R01 Equivalent* Includes R01, R23, R29 and R37 Misperceptions in the Media Number of R01 Equivalents Decreased

27. Fiscal Year $0 $2 $4 $6 $8 $10 $12 19981999200020012002200320042005 Funding (in Billions) R01 Equivalent* Includes R01, R23, R29 and R37 Misperceptions in the Media R01 Funding Decreased

28. Survivorship Millions of People 1971 198619902003 9 6 3 Principle 4: Proactive Communication about Investment in NIH  For the first time in recorded history, annual cancer deaths in the United States have fallen  10 million cancer survivors  Improved effectiveness of early cancer detection and screening  Thanks to the doubling, new targeted, minimally invasive treatments for cancer multiplied  New drugs developed for cancer prevention 30-year investment per American: ~$260 Total Average investment per American ~$8.60 per year

29. NIH Communication Goals Increase awareness of the benefits every American receives from public investment in biomedical research Convey to all audiences the role research will play in transforming medicine in the 21 st century Persuade the public and private sectors of the importance of sustaining momentum in advancing knowledge and discovery

30. NIH Homepage –More than 40 Fact Sheets –State-by-state Funding Data –Newsletter from NIH Director http://www.nih.gov/about/researchresultsforthepublic/index.htm

31. Coming to Your Doctor’s Office: Free, Authoritative, Up-to-Date Health Information

32. 22 Million Readers, Plus Website Visitors

33. Mentions “National Institutes of Health” April through August 2006 Average: 4,200 per month (Not including specific Institute and Center programs)

34. NIH Beyond the Beltway

35. 2006 Is the Year… To succeed in communicating the importance of medical research and the role of NIH…

36. Principle 5: Promote NIH’s Vision for the Future Preemptive Personalized Predictive Participatory

37. NIH Transforming medicine and health through discovery