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December 12, 2016 11:00 PM

Merry Xmas NIH—Here's your 0.1% additional raise

Merrill Goozner
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    No element of the 21st Century Cures Act received greater public acclaim than the $4.8 billion in new funding for the National Institutes of Health, which Congress may parcel out to the agency over the next 10 years to pursue a “moonshot” to cure cancer, investigate brain chemistry and develop individualized or precision medicine.

    “The bill is a crucial step towards removing barriers to innovation, securing funding for major initiatives like the Cancer Moonshot, and streamlining drug development to ensure more patients benefit more quickly from lifesaving therapies and devices,” said Mary Woolley, CEO of ResearchAmerica, which lobbies for more money for NIH.

    “This targeted funding will be an important supplement to the yearly NIH base budget increases that are essential to ensure stable and efficient progress across the spectrum of diseases,” the Association of American Medical Colleges, whose members receive about 80% of NIH grants, said in a statement.

    In her statement, Woolley expressed regret that the bill raided the Prevention and Public Health Fund to offset the costs of the Cures Act, “which will inevitably impact efforts to address health threats.”

    So what, exactly, did NIH gain through this diminishment of prevention and public health and the potential weakening of Food and Drug Administration drug and device approval standards that was the initial impetus for the bill, which was signed into law by President Barack Obama today?

    The $4.8 billion over 10 years (assuming it is appropriated) is in addition to the regular increases that NIH may or may not get.

    It's always tough to make assumptions about what future Congresses will do. But its record over the past 10 years—most of which was under Republican control as it is now—leaves little room for hoping that major increases are in the offing. The average annual average increase over the last decade was 1.3%. (The 2009 stimulus bill contained an additional $10 billion for NIH, but that was never built into its base budget.)

    So what will the appropriations look like if Congress treats NIH the same way in its regular appropriations over the next decade (a 1.3% annual increase), and fully funds the Cures Act?

    The following charts make those two assumptions. At the end of the period (2026), NIH's total annual budget will be $36.99 billion, not the $36.77 billion they'd be getting without the Cures Act. Total spending on research over the period will be $351.9 billion, up from $347.1 billion.

    NIH Cures Act Effects

    NIH Cures Act Effects2

    In other words, total spending on NIH-funded research over the period will increase just 1.4% per year on average versus the 1.3% they would otherwise get. That's a 0.1% average annual increase.

    Combined, the two are less than the expected rate of inflation of about 2%. In other words, in inflation-adjusted dollars, NIH will probably continue to shrink over the next decade even with the Cures Act funding.

    A crucial step to removing barriers to innovation? Or a pre-dream state Uncle Scrooge? You decide.

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