Worried about America’s biomedical research enterprise, academics have persistently sounded the alarm over slow growth in the National Institutes of Health budget. The Trump administration responded to those concerns in its 2018 proposed NIH budget by recommending a 22 percent budget cut and a reduction in support for indirect costs. While those cuts never came to pass, they marked a manifestation of political will to examine spending at the NIH.
There’s no question that the NIH could be a leaner and more innovative organization. But that would require elemental reforms in how it supports indirect costs (more on those in a minute) and its reliance on study sections to review grant proposals.
We propose two key reforms and offer a model that could reinvigorate innovation at the NIH while also funding “more for less.”
Reform support for indirect costs
Most NIH grant proposals seek funding for two types of costs. Direct costs include salaries, travel, equipment and supplies, and the like that directly support a project or activity. Indirect costs, also known as facilities and administrative costs, cover expenses such as buildings, maintenance, and administration.
At the NIH’s inception in 1887, scientific grants covered only direct costs. In the 1940s, recognizing that this model favored wealthy institutions, the NIH began to include indirect costs, initially capping them at 8 percent of the direct costs of the grant. Over the intervening decades, the cap increased to 26 percent and the NIH also created individualized indirect rates that now average 52 percent. With the NIH budget growth barely exceeding inflation, increasing indirect expenses directly inhibits the funding of new investigators and new grants.
In 2017, one-third of the more than $26 billion in grants the NIH awarded went to indirect costs. By comparison, the Gates Foundation reimburses indirect costs at 10 percent of the direct cost; the EU has a proposed flat rate of 25 percent starting in 2020.
The current system of indirect funding perpetuates systemic inequity favoring large, wealthy institutions. In 2017, the wealthiest 10 percent received 90 percent of NIH research funding. Recent research has identified large disparities in grant success rate and funding across a number of domains — including race, gender, and age — that severely limit the diversity of funded researchers and greatly hamper scientific progress. Increasing indirect costs in the setting of a flat overall NIH budget have perpetuated this inequity.
We propose that an institution’s indirect rate be placed into one of three tiers — 10 percent, 17.5 percent, and 25 percent — that are inversely tied to the institution’s rolling three-year average of NIH funding. Institutions with the highest record of NIH funding would receive the lowest indirect rate, and vice versa. By our conservative estimate, this change would release $2.2 billion that could be dedicated to funding creative research from new investigators who, lacking publication track records, could start their careers early instead of receiving their first grant at an average age of 42.
Reform the NIH study section
The process by which the NIH funds non-NIH investigators is largely directed by researchers from outside the NIH. Research areas are divided into hundreds of so-called study sections, each largely comprised of 10 to 30 academics. Each study section covers a narrowly defined area, such as cancer biomarkers and cellular mechanisms of aging.
Members are recruited by word of mouth, often through existing study section members. To serve on a study section, a researcher and must have an R01 grant, a requirement that excludes a large portion of the research community. Medical staff members at the NIH — some of the best clinician-researchers in the country — are not involved in grant review.
Study section members agree to three-year commitments, with oversight by a chair and an NIH staff member. Each grant submission is reviewed by at least two study section members, who then present the grant application to the entire section. After discussion, the study section members vote to assign the proposal an overall numerical score. The proposal’s score is compared to a funding cutoff score. Those meeting the cutoff are typically funded.
At 72 years old, the study section model for grant review is ripe for revision. Peer selection of study section members can result in groupthink. Personal animosity within the research community can result in the exclusion of individual researchers from grant funding or serving on a study section. With flat NIH funding and pressure to produce near-term measurable results, innovative ideas with limited supporting data promoted by new researchers are less likely to receive funding.
“Safe science” — mechanistic hypotheses with outcomes that are easy to predict and measure — performed by well-established researchers tends to be favored to demonstrate the sound use of federal funds, meaning that paradigm-shifting work is usually not funded. Yet established investigators with high NIH funding have decreased return on investment and productivity, as shown by research from the NIH’s own Office of Extramural Research.
Given this system, it is no surprise that our country faces a languishing pharmaceutical product pipeline in multiple critical product areas, a lack of meaningful innovation in service delivery, and other research. Like high-octane gasoline, the NIH extramural grant program is supposed to power basic medical research in the U.S. Yet many therapeutic areas are out of gas.
Research into new antibiotics is just one example. The U.S. and the world are running out of drugs to treat serious gram-negative infections, placing vulnerable groups such as cancer patients receiving chemotherapy at higher risk of complications, including death. The CDC estimates that in the U.S. alone, antibiotic resistance results in more than 2 million illnesses each year, along with 23,000 deaths, $20 billion in direct expenses, and more than $35 billion in lost productivity.
What was once a robust research space is now a desert: New drug applications for antimicrobials have declined from more than 30 new antibiotics approved in the 1980s to less than 10 new approvals in the first decade of the new millennium. Dr. Anthony Fauci, who directs the National Institute of Allergy and Infectious Diseases, has repeatedly highlighted the need for increased research in this area.
Look to the FDA review model
The Food and Drug Administration offers several models for review the NIH could look to for inspiration. The Center for Drug Evaluation and Research and the Center for Biologics Evaluation and Research serve as market-entry regulators for pharmaceutical products in the U.S. They employ thousands of expert staff members who serve as reviewers or as hybrid regulators, researchers, and clinicians.
FDA reviewers have helped nurture the creation of product spaces such as targeted oncology, approving 64 new products in 25 years, while fostering incremental innovation elsewhere, approving 1,222 new drugs since 1950. Product area advisory committees of outside experts supplement this community, serving as external sounding boards. We saw this system at work first-hand as a reviewer (B.J.M.) and intern (K.R.) for the Office of New Drugs at the Center for Drug Evaluation and Research.
The NIH would benefit from transforming from a volunteer to a professional review process for grant applications. Funded by reduced indirect costs, with staff members recruited from academia and industry, the creation of a professional staff would promote intellectual diversity and institutional memory, decrease bias towards individual investigators, and supercharge the funding of revolutionary ideas. Area-specific external advisory committees could assist in answering difficult questions.
The NIH extramural grant program is in desperate need of reform so it can embrace young investigators and those with paradigm-shifting ideas. Runaway indirect costs for large, wealthy institutions needlessly consume billions of dollars instead of directly supporting up-and-coming scientific investigators. Groupthink within the study section model paradoxically paralyzes revolutionary ideas. Pharmaceutical companies, lacking the fuel of a blossoming basic research environs, struggle to find molecular targets to attack disease in high need areas.
As we seek to reinvigorate biomedical research in the U.S., we must leave no stone unturned: It is time for change at the NIH.
Brian J. Miller, M.D., is an adjunct assistant professor at the University of North Carolina Kenan-Flagler School of Business and an internal medicine resident at MedStar Georgetown University Hospital. He previously served as a reviewer in the Office of New Drugs at the FDA’s Center for Drug Evaluation and Research. Kyle Richardville, M.D., is an internal medicine resident at the Cleveland Clinic Foundation. He previously served as an intern in the Office of New Drugs at the Center for Drug Evaluation and Research.