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Funding Health Sciences Research ,~ A Strategy to Restore Balance Committee on Policies for Allocating Health Sciences Research Funds Division of Health Sciences Policy INSTITUTE OF MEDICINE Floyd E. Bloom and Mark A. Randolph' editors NATIONAL ACADEMY PRESS Washington, D.C. 1990

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National Academy Press 2101 Constitution Avenue, N.W. . Washington, D.C. 20418 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competencies and with regard for appropriate balance. This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The Institute of Medicine was chartered in 1970 by the National Academy of Sciences to enlist distinguished members of the appropriate professions in the examination of policy matters pertaining to the health of the public. In this, the Institute acts under both the Academy's 1863 congressional charter responsibility to be an advisor to the federal government and its own initiative in identifying issues of medical care, research, and education. Major support for the study was provided by the Lucille P. Markey Charitable Trust and The Pew Charitable Trusts. Other support was contributed by the Institute of Medicine, from its own endowment interest income and from other independent sources, including unrestricted donations received from several leading pharmaceutical companies. The project was assisted in initial stages by the National Research Council Fund (NRC), a pool of private, discretionary, nonfederal funds that is used to support a program of Research Council/Institute of Medicine studies of national issues in which science and technology figure significantly. The NRC Fund consists of contributions from several sources: a consortium of private foundations, including the Carnegie Corporation of New York, the Charles E. Culpeper Foundation, the William and Flora Hewlett Foundation, the John D. and Catherine T. MacArthur Foundation, the Andrew W. Mellon Foundation, the Rockefeller Foundation, and the Alfred P. Sloan Foundation; the Academy Industry Program, which seeks annual contributions from companies that are concerned with the health of U.S. science and technology and with public policy issues with technological content; and the National Academy of Sciences, the National Academy of Engineering, and Institute of Medicine endowments. Library of Congress Cataloging-in-Publication Data Institute of Medicine (U.S.). Committee on Policies for Allocating Health Sciences Research Funds. Funding health sciences research: a strategy to restore balance / Committee on Policies for Allocating Health Sciences Research Funds, Division of Health Sciences Policy, Institute of Medicine; Floyd E. Bloom and Mark A. Randolph, editors. p. cm. Includes bibliographical references. Includes index. ISBN 0-309-04343-3 1. Medicine-Research-United States Finance. 2. Medical sciences-Research-United States-Finance. 3. Medical policy- United States-Finance. I. Bloom, Floyde E. II. Randolph, Mark A. III. Title. [DNLM: 1. Health Policy-United States. 2. Research Support- organization & administration. 3. Research Support-trends. W 20.5 I513f] R854.USI57 190 362.1107207~dc20 DNLM/DLC for Library of Congress Copyyright (if) 1990 by the National Academy of Sciences Printed in the United States of America 90-13400 CIP

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COMMITTEE ON POLICIES FOR ALLOCATING HEALTH SCIENCES RESEARCH FUNDS FLOYD E. BLOOM (Chair), Chairman, Department of Neuropharmacology, Research Institute of Scripps Clinic, La Jolla, California HENRY J. AARON, Senior Fellow, The Brookings Institution, Washington, D.C. JACK D. BARCHAS, Associate Dean for Neuroscience and Professor of Neuroscience and Biobehavioral Sciences, School of Medicine, University of California at Los Angeles, Los Angeles, California RONALD BRESLOW, Mitchell Professor of Chemistry, Department of Chemistry, Columbia University, New York, New York HOWARD E. FREEMAN, Professor, Department of Sociology, University of California at Los Angeles, Los Angeles, California MANNA H. GRAY, President and Professor of History, University of Chicago, Chicago, Illinois BERNADINE P. MEALY, Chairman, Research Institute of The Cleveland Clinic Foundation, Cleveland, Ohio SAMUEL HELLMAN, Dean, Division of Biological Sciences and the Pritzker School of Medicine, and Vice President for the Medical Center, University of Chicago, Chicago, Illinois MAUREEN M. HENDERSON, Professor of Epidemiology and Medicine, University of Washington, Fred Hutchinson Cancer Research Center, Seattle, Washington RALPH I. HORWITZ, Professor, Department of Medicine, Yale University, New Haven, Connecticut ERNEST G. JAWORSKI, Distinguished Science Fellow and Director of Biological Sciences, Monsanto Company, St. Louis, Missouri GERALD L. KLERMAN, Professor and Associate Chairman for Research, Department of Psychiatry, Cornell University Medical College, New York, New York THOMAS W. LANGFI11 (ex officio member), President and Chief Executive Officer, The Glenmede Trust Company and the Pew Charitable [lusts, Philadelphia, Pennsylvania JOSHUA LEDERBERG, University Professor, The Rockefeller University, New York, New York ARIEL G. LOEWY, Jack and Barbara Bush Professor in the Natural Sciences and Chairman, Department of Biology, Haverford College, Haverford, Pennsylvania DON K PRICE, Professor of Public Management, Emeritus, John F. Kennedy School of Government, Harvard University, Cambridge, Massachusetts . . . ID

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1V FUNDING HEATH SCIENCES ~SE~CH KENNETH I. SHINE, Dean, School of Medicine, University of California at Los Angeles, Los Angeles, California P. DENNIS SMITH, Chairman, Department of Biological Sciences, Wayne State University, Detroit, Michigan Study Staff Ruth Ellen Bulger, Director, Division of Health Sciences Policy Alicia K. Dustira, Study Director Mark ~ Randolph, Co-Study Director Kyung Sook Lee, Research Associate Claudette K Baylor-Flemming, Project Secretary Kimberly ~ Kasberg, Project Assistant Louise M. Gillis, Project Assistant

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Foreword This report represents the efforts of a distinguished committee of university presidents, academic deans, department chairmen, foundation leaders, and university and industry research scientists, who were presented with the difficult task of reviewing the allocation of funding for research in the health sciences and recommending policies to assure balance in support among the components of this research. It contains a valuable analysis of funding and allocation trends in the biomedical fields. During the two years that they worked, committee members were faced with a rapidly shifting funding environment for health sciences research. When they began in 1988, the National Institutes of Health funded more than 6,000 new and competing R01 grants. By the time they finished the report, this number had dropped to less than 5,000. At a June 1990 forum on supporting biomedical research sponsored by the National Academy of Sciences (NAS) and the Institute of Medicine (IOM) many scientists and administrators from the public and private sectors expressed serious concerns about the inadequate funds available to support research, especially by young investigators. Both this report and the sense of the forum emphasize that high priority should be given to the training of the next generation of scientists. However, the consensus view of the forum was that we are now facing a crisis in funding of research projects. Thus it may appear incongruous that this report focuses on long-range recommendations calling for more money for training, career development, facilities, and greater flexibility in the calculation of indirect v

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V1 FOREWORD costs. We recognize that in the current environment the committee might also have addressed and highlighted the immediate funding pressures. It is encouraging that the government officials present at the forum acknowledged the seriousness of the short-term funding problem and an- nounced that they will address the matter in the next budget cycle. It is appropriate therefore that this report seeks to examine long-term strategies that might protect the environment from the wide swings of the past 2 to 3 years and provide long-term stable supplies of investigators, as well as adequate infrastructure to assure the continuing productivity of biomedical research in the country. This report, like the June Forum, is a manifestation of the continuing concern of the NAS and IOM that adequate funding, properly apportioned, be provided for biomedical research. Our institutions will continue to examine these issues as the research scene and funding patterns change. FRANK PRESS President National Academy of Sciences SAMUEL O. THIER President Institute of Medicine

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Preface Few topics provoke as much intense debate among the participants and policymakers of health sciences research as the processes by which research sponsors decide how much to spend and how to allocate their funds. Almost everyone will acknowledge that health sciences research in the United States has experienced progressive expansion and a remarkable course of accomplishment since Vannevar Bush and his colleagues opened the highway of federally funded discovery at the end of World War II. But, not unlike Mark l~vain's comments on the weather, the process of allocating funds for U.S. health sciences research seems to be an issue that draws constant complaints and fuels our desire to do something about it. Important policy decisions on how to expend funds most effectively on research operations, research training, and research equipment and facilities have become issues of intense debate, interminable consternation, and frequent misconceptions both among those providing the funds and those competing to receive them. From the l950s through the 1970s, the federal government increased its investment in health sciences research, outstripping the still significant contributions of private foundations that were once the primary sponsors of academic medical science. As other federal programs drew increas- ingly upon the funds the nation was willing to commit for health research through the 1970s, the rate of federal expansion slowed, but nevertheless retained continuous' albeit modest, growth. A variety of short-term admin- istrative procedures enacted in the 1980s attempted to stretch the available funds to the maximum while simultaneously stabilizing the research base . . V11

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V111 PREFACE through established minimum numbers of funded research projects and increasing award periods. However, these short-term repairs implemented in a new era of enormous federal budget deficits combined with austere domestic spending policies have, in turn, created new problems. Although the number of projects funded has continued to grow, the number of new grant applications reflecting the awareness of new scientific opportunities has grown even faster. The resulting paradox is that despite the greatest historical federal and private investment in absolute dollars, the probabil- ity that any new grant application will be funded has never been lower. This significantly diminished success rate for new research project grant applications is sending painful signals throughout the research ranks. Along with the growing divergence between the overall health research budget allocation and the increasing proportion of approved but unfunded research projects has come the recognition that important pieces of the health research enterprise have been neglected to keep this gap from growing even wider. Multiple federal and private assessments of the trends in research funding have concluded that we may already be entering a crisis whose effects will not be realized until sometime in the future. Because of the present underattractiveness of health science as a career, the cadre of creative, well-trained health scientists needed to continue our current momentum into the next century is already threatened. Since it takes many years to train medical scientists, these effects will not be realized for several years into the future. The emergence of high-technology biomedical research, and its need for talent to maintain the therapeutic and diagnostic advantages earned by the U.S. health care industry, creates an added but indeterminable need for talent development. Other surveys have repeatedly documented the degree to which out- moded facilities and equipment have already constrained the potential creativity of the present generation of medical scientists. Yet the problems remain, and the expressions of distress throughout the scientific community grow louder despite the indisputable fact that federal funds and the number of federally funded health research projects are at an all-time high. In May 1988, the Institute of Medicine appointed the Committee on Policies for Allocating Health Sciences Research Funds to study these potentially onerous trends. It was the committee's task to conduct an in-depth review of the current policies employed by all of the sponsors of health sciences research, including non-federal governmental sources, the private foundations and charitable health agencies, and the corporate health care industry. The committee was also charged to recommend appropriate revisions in these policies in order to restore balance among the essential components of the health research enterprise (research, training, equipment, and facilities); to increase the flexibility in using these funds; and to ensure that, at any established level, the funds committed to health

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PREFACE ix sciences research will be used most effectively to sustain the vitality of the U.S. biomedical research enterprise. As is customary in studies with such broad implications and potential ramifications, the committee's 18 members were selected to include rep- resentation from a broad spectrum of viewpoints including both basic and applied medical researchers; scientific administrators in large and small academic institutions, in private foundations, and in the pharmaceutical industry; and individuals with past direct participation in the administration of federal health sciences research. The breadth of views represented by the committee membership led to intense examination of a large number of perspectives and to the realization that many points of view were in many cases based on inaccurate perceptions of the facts pertaining to amounts contributed by the different sponsors in relation to their research objectives. This report represents the distillation of the factual records on research funding allocations by the various sponsors, and a comprehensive examina- tion of priorities that must be addressed to attain our goal of ensuring the most effective expenditure of the funds to sustain the vigor of our national health research enterprise. ~ derive an accurate representation of the current state of funding, the committee received testimony from a large number of research soci- eties, from prominent educators and administrators throughout the health sciences research community, and from a large number of academic sci- entists and administrators. In addition, three commissioned papers were utilized to bring solid data to bear on the questions of funding trends and gaps in funding, and to illuminate the boundaries of support among the specific sponsors of this research. The committee divided itself into task forces, which, with additional outside participation, focussed on three main sets of issues: the overall strengths and weaknesses of the present system for supporting U.S. health sciences research; the goals of health sciences research; and how to optimize the environment for this research. Following this assessment of the current trends in research funding, the committee worked toward elaborating a set of objectives for a more idealized research enterprise in which the specific objectives of the sponsors could be more effectively aligned. The most important element in the committee's analysis was developing strategies to attract and retain the most competent and creative scientists. Lastly, the committee worked to develop specific recommendations to re-establish a more balanced research system that begins to redress the consistent underinvestment in some areas of the enterprise. To this end, the committee sought to devise a means to Pn~l~rP. ~ more. Kind and vigorous research enterprise through the ~ TV ~^ _ ~ ^~^ _ _ ~ 1 participatory interactions of the sponsors, the public, and the scientific community. The recommendations made are not likely to be seen as the panacea

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x PREFACE that some would have preferred. In speaking directly to the scientific community, not only about their responsibilities to the system that has spawned them but to their responsibility to the future, we recommend steps to be taken now that may seem in the short term to compromise modestly an already critical period of research project funding. Nevertheless, our intent is to achieve a gradual correction of funding imbalances within the existing system of multiple sponsors. We recommend new processes of policy development, assessment, and continued revision that may reduce the unintended constraints on the system. We propose mechanisms for convening the critical participants, including the scientists, their public supporters, and their critics so that their views of what the future might hold will no longer be captive to the divergent views on how to get there. We also acknowledge that public policy is not static and recommend that the various oversight bodies continuously monitor these and other policy changes that are implemented. A study of this scope and duration could not have been possible without a dedicated support staff. The committee specifically wishes to acknowledge the solid support provided by the staff of the Institute of Medicine's Health Sciences Policy Division and its director, Ruth Bulger. We recognize the important organizational and administrative contributions made by the original study director, Alicia Dustira, and the writing, analysis, and review steps that were so effectively carried out by her successor, Mark Randolph. Lastly, an especially hearty expression of gratitude is due to Kyung Sook Lee, the research associate, and to Claudette Baylor-Flemming, Kimberly Kasberg, and Louise Gillis for their dedication to our task and their good nature in helping us reach our goals through every known source of communication available to the Institute, from handwritten notes on easel pads to satellite-transmitted telefacsimiles. Floyd E. Bloom Chairman, Committee on Policies for Allocating Health Sciences Research Funds

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Contents EXECUTIVE SUMMARY.. 1. INTRODUCTION............................................ Objectives of the Study, 29 Boundaries and Goals of Health Sciences Research, 30 2. FUNDING FOR HEALTH SCIENCES RESEARCH. . Federal Support for Health Sciences R&D, 36 Industry, 49 Nonprofit Organizations, 54 Summary and Conclusions, 59 3. SETTING FEDERAL SCIENCE AND TECHNOLOGY PRIORITIES ........................................... Science and Technology Advice to Government, 64 Federal Budget Process, 72 Summary and Conclusions, 77 4. SUPPORTING RESEARCH THROUGH NIH AND ADAMHA............................................ Allocations for NIH and ADAMHA, 81 NIH Direct Operations, 83 Setting Program Priorities Through Peer Review, 92 Research Scientist [lends, 100 R&D Contracts, 104 R&D Centers, 106 xi . . .25 .......... 32 . . . . . . ...62 ....79

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X11 Research Administration, 109 Increasing Costs of Animal Use, 111 Indirect Cost Recovery, 112 Summary and Conclusions, 113 5. NURTURING SCIENTIFIC TALENT ......... Problems in the Human Resource Base, 118 Problems with the Financial Support Base, 129 Summary and Conclusions, 135 6. RESTORING THE PHYSICAL INFRASTRUCTURE FOR HEALTH SCIENCES RESEARCH .............. Adequacy and Suitability of Research Space, 141 Adequacy and Suitability of Research Equipment, 146 Sources of Support for Facilities and Equipment, 148 Summary and Conclusions, 158 CONTENTS ...... 117 ......... 139 7. POLICY OVERVIEW AND RECOMMENDATIONS 162 Support for Health Sciences Research, 162 ldward a Positive Research Environment, 171 Talent Renewal, 182 Improving the Research Project Grants System, 188 Restoring the Physical Infrastructure, 196 Establishing an Ongoing Process for Research Program Management and Oversight, 199 Scientist Responsibilities, 206 A Call to Action, 207 APPENDIXES Tables............................ B. Biographies of Committee Members C. Ask Forces ............... D. Respondents to Input Request INDEX .............. . 209 . 230 .239 .242 . 245

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Fartdir~g Health Sciences Research

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