A Nickel Ain’t Worth a Dime Anymore*

Shrinkflation applies to more than the size of candy bars or the amount of cereal in a box. It also affects medical research as federally funded investigators face rising costs but compete for flat or declining grant dollars.

Over the last 20 years, the budget for the National Institutes of Health (NIH) has grown from $27.1 billion in fiscal year (FY) 2003 to more than $47 billion in FY2024, but keeping dollars constant to account for inflation using the Biomedical Research and Development Price Index (BRDPI), the value of the current funding is about 5% less than it was in FY2003, according to an analysis from the Congressional Research Service.¹

“2003 was the era of flip phones and dial-up internet and floppy disks, and we still aren’t quite investing in those terms today,” said Tannaz Rasouli, MPH, senior director of public policy and strategic outreach at the Association of American Medical Colleges (AAMC) and executive director of the Ad Hoc Group for Medical Research. The Ad Hoc Group brings together patient and voluntary health groups, medical and scientific societies (including the American Society of Hematology [ASH]), academic and research organizations, and industry to support increasing funding for the NIH.

Heading into FY2025, Congress is considering substantial cuts to overall nondefense discretionary spending, which could include cuts to the NIH. ASH Clinical News spoke with researchers and policy advocates to understand the impact of uncertainty surrounding federal funding on research efforts and the pipeline of new investigators.

NIH Funding Through the Years

The NIH is considered the premier source of funding for basic and translational medical research in the United States, touching nearly every new drug and medical advance of the modern age. A recent study found that NIH-funded research contributed to 99.4% of drug approvals by the U.S. Food and Drug Administration between 2010 and 2019.² It is also an economic engine. Every dollar of NIH research funding generates $2.46 in economic activity, according to a report from United for Medical Research.³

For researchers, NIH funding is at the center of academic medical research, said Marvin T. Nieman, PhD, vice dean for graduate education at Case Western Reserve University. It provides the capital to fund labs and salaries, serves as a benchmark for promotion and tenure, and is the point of entry to a research career for young investigators. “Especially in the biomedical space, NIH funding is essential,” Dr. Nieman said.

Traditionally, there has been bipartisan support in Congress for funding medical research through the NIH, but there have always been peaks and valleys. Between 1998 and 2003, Congress committed to doubling the agency’s funding. The bipartisan effort saw NIH’s budget rise from $13.6 billion to $27.1 billion (an increase from about $42 to $83 per person in the U.S.), but for more than a decade after that, the budget was effectively flat. When accounting for inflation, the agency’s purchasing power declined significantly.¹

Once again, in 2015, Congress came together in a bipartisan effort to shore up medical research funding. Between FY2015 and FY2023, Congress poured $17 billion in new funding into the NIH. “The agency really started to recover some of that lost purchasing power in inflation-adjusted terms because Congress made it a priority to consistently provide eight years of above-inflation increases for the NIH,” Ms. Rasouli said. “But even at the end of that period in FY2023, we had just barely, but not quite yet, reached where we were in inflation-​adjusted terms in FY2003.”

In FY2024, Congress faced strict spending caps on nondefense discretionary spending. Congressional appropriators provided a small increase to NIH funding that year, which helped to offset some sunsetting funds from the 21st Century Cures Act. But even with the new funding, the FY2024 budget came out about $368 million lower than in FY2023.⁴

This year, Congress will consider the FY2025 budget in another tight fiscal environment with the added complication of a presidential election in the background. “We can say with relative certainty that it’s unlikely that Congress will complete the spending bills before the election,” Ms. Rasouli said. What will happen with the budget post-​election is likely to depend on who wins in November, she added.

From Appropriations to Paylines

A flat or reduced NIH budget can result in the agency awarding fewer new grants or potentially reducing existing multiyear awards and generally means that fewer researchers will be supported overall, according to the NIH Office of Extramural Research.

During the peer review process, NIH reviewers assign an impact score to grant applications that reflects the submission’s scientific and technical merit. The agency then converts these scores into a percentile that allows the application to be ranked against others in the same peer review study section.

Many NIH institutes and centers also set a “payline,” which is a percentile score beyond which most applications won’t be funded. When setting a payline, the institutes and centers consider the funds they expect to be available for the next year, commitments to existing multiyear grants, anticipated funding for new and established programs, and likely trends in grant applications.

The payline for the National Cancer Institute (NCI), for example, is one of the most competitive. For FY2024, NCI set the payline for competing R01 and R21 grants to established and new investigators at the 10th percentile. The payline for early-stage investigators receiving R01 grants is set at the 17th percentile.⁵

At the National Heart, Lung, and Blood Institute, the FY2024 payline is set at the 14th percentile for R01 grants and the 24th percentile for R01s for early-​stage investigators.⁶

At the National Institute of Diabetes and Digestive and Kidney Diseases, which also awards funds for research into hematologic diseases, the general FY2024 payline for R01s is set at the 13th percentile. However, R01 applications will be held to a payline that is 5% below the general threshold if they don’t include therapeutic clinical trials as the focus of the research plan and request $500,000 or more in direct costs in any given year.⁷

Paylines don’t directly translate into how many applications and investigators are funded because institutes and centers can choose to award grants outside of paylines based on available funds and research priorities. Success rates, which are calculated by taking the number of funded applications divided by the number of applications reviewed, are another metric for the competitiveness for grant funding. Overall, the success rate for R01-equivalent grants across NIH institutes and centers was 22% in 2023, down from 32% in the late 1990s and early 2000s (see Figure 1).⁸

Reality of the Grant Process

The materials needed to conduct biomedical research and salaries for lab staff are all on the rise, but research awards aren’t keeping up, said Eric Padron, MD, scientific director of malignant hematology at Moffitt Cancer Center in Tampa. The average size of R01-equivalent grants has risen from about $247,000 in 1998 to $585,000 in 2022, but after accounting for inflation, the 2022 figure is just $288,000 (see Figure 2).⁹

“It’s a problem, but I’m not sure it’s the biggest problem,” he said. Dr. Padron, who has multiple active grants including an R01 grant to develop patient-​derived xenograft models in chronic myelomonocytic leukemia, said the biggest issue for him is that, despite increases to the budget for the NCI, it has one of the lowest paylines, meaning it funds only a small proportion of the applications it receives.

While the payline and success rate equations are complicated depending on how many applications are submitted, the bottom line for researchers is that more ideas are being generated than there are resources to test those ideas, said Alisa Wolberg, PhD, chair of ASH’s Committee on Scientific Affairs and professor of pathology and laboratory medicine at the University of North Carolina at Chapel Hill, whose lab focuses on research into thrombosis and bleeding.

For academic researchers, an NIH grant is an essential part of establishing and maintaining a lab. Dr. Wolberg said investigators are typically expected to fund at least 50% of their time with research grants — and up to 100% at some institutions. “We really need the funding, or we don’t have jobs or time to pursue these ideas,” she said.

The life of an academic researcher can be a relentless cycle of grant activity because most grants only last for two to four years, and funding can’t be allowed to lapse or a lab could lose vital staff members, she said. “It hurts the entire enterprise within the lab but also the country’s long-​term goal if we must keep starting over. We’re constantly writing grants to ensure that there aren’t gaps in the way we support team members,” Dr. Wolberg said.

That creates a cycle of writing a grant, doing the work, publishing scientific papers, writing more grants, and on and on. “That’s our lifestyle,” she said. “There’s no time of the year where I’m not thinking of a grant, writing a grant, or editing a grant.”

Another challenge is the length of the NIH grant process. The time between submitting a grant application and receiving the funding can take between one and two years, during which time prices increase, lab staff comes and goes, and unexpected expenses can arise. “Sometimes your freezer dies, and now you’ve got to buy a freezer that you didn’t anticipate. A lot of things happen, but the money doesn’t change,” Dr. Wolberg said.

During cycles when the NIH is operating under a so-called continuing resolution because Congress hasn’t finalized a budget for the year, investigators will often have to resubmit grants because agency officials are unsure how many grants can be funded. “Sometimes you’ve resubmitted the entire proposal, and then you hear that the original one is able to be funded, in which case you did a lot of work that didn’t go anywhere,” Dr. Wolberg said.

Another complication is a recent bump in trainee salaries. In April 2024, the NIH announced it would increase stipends for predoctoral and postdoctoral scholars who are receiving Ruth L. Kirschstein National Research Service Awards (NRSAs). The increase is 8% for postdoctoral fellows, bringing stipends to $61,008. This raise falls short of the $70,000 baseline recommended by the NIH Advisory Committee to the director.¹⁰

Although the move only covers NRSAs, many academic medical centers use that stipend as a benchmark for all postdoctoral fellows, according to Tom Kimbis, JD, executive director and chief executive officer at the National Postdoctoral Association.

Mr. Kimbis said the increase is a good start but still short of what would be needed to stay competitive with government and nonprofit salaries for starting PhDs. At the same time, the increase becomes an unfunded mandate for research institutions. “Institutions typically set budgets for research for a calendar year. To bump up postdoc pay, the money must come from somewhere. Today, the NIH is not closing that gap,” Mr. Kimbis said.

Dr. Wolberg said the postdoc stipend increase was long overdue, but for investigators who budgeted grants as much as four years ago, it creates a budget squeeze. “We have to guess and do our best, but there’s a lot of time that goes into it, a lot of conversations with my grants administrators trying to cobble together what it takes to get the things done we thought we’d need to get done,” she said. “That is also time away from scientific thinking.”

Is It Worth It?

Despite the challenges to academic research, Dr. Padron said he doesn’t see any dampening interest in pursuing NIH funding because of how deeply rooted an NIH-funded grant is for academic success. But the difficulty in breaking into NIH funding may be one of the factors that keeps people from entering the academic research pipeline in the first place.

Claire Pomeroy, MD, MBA, president of the Albert and Mary Lasker Foundation, said one of the most significant consequences from flat NIH funding is the impact on people considering careers in academic research. She said early-career scientists are looking at a variety of alternative pathways, from the intramural research program at NIH to industry positions, rather than pursuing the same pathway as their academic research mentors.

“When I talk to young researchers, I hear major concerns about the uncertainty that is engendered by the recent trends in NIH funding,” Dr. Pomeroy said. “The fact that from year to year we don’t know exactly what’s going to happen to the NIH budget makes it very difficult for young people to commit to a career that has such uncertain resources for them.”

Additionally, it’s difficult for early-career researchers to navigate the grants system. They typically start with an NIH mentored career development award before moving to independent funding, such as an R01 grant. But the NIH recently released data showing that the average age for MDs and MD/PhDs receiving their first R01-equivalent grant is 44 years old, which is a long on-ramp for establishing a research career.¹¹

“What I hear from young scientists is that this is a fantastic career. Medical research is so satisfying,” Dr. Pomeroy said. “We need to meet them in that passion with appropriate resources and support.”

Dr. Nieman shares the concern about how NIH funding could affect the pipeline. As vice dean for graduate education, he hears from an increasing number of graduate students who say they have no interest in academic medicine. “A lot of people say it’s too uncertain,” Dr. Nieman said. “There’s a sense that only the big, established labs get the money and they have no chance.”

Because many graduate students don’t see a path for success, they take themselves out of the game, Dr. Nieman said. From 2021 to 2022, there was an 8% decrease in the number of U.S. citizens and permanent residents employed in postdoc positions, according to data from the National Science Foundation.¹² But Dr. Nieman predicted the pendulum will swing back as people see opportunities and a path forward in academia.

Solutions and Advice

To have a successful laboratory, researchers need to diversify their funding sources, with NIH as the foundation, experts agreed. “Philanthropy, in our experience, allows us to have the greatest creative leeway to follow the science to wherever it goes, do something high risk but potentially high reward that may not fly with an NIH grant,” Dr. Padron said. “Industry can certainly also be complementary.”

Dr. Padron urged grant seekers to consider paylines if their research could fall under multiple NIH institutes. While the NCI funds few grant submissions, the National Institute on Aging (NIA) might offer more opportunity with its paylines for new investigator R01s ranging from 16% to 19%.¹³ Additionally, certain institutes offer benefits that could save time or money down the road. At the NIA, for instance, researchers have access to their aging mouse colony.

Additionally, Dr. Padron advised grant seekers to be part of grant review committees and study sections to gain a better understanding of what makes a grant submission successful.

Dr. Wolberg advised grant seekers to consider requests for applications because that means money has been set aside for a project in that area and the funding levels can be higher. Additionally, she stressed that it’s critical to listen to reviewers. “They are trying to help, and being responsive to those reviewers helps applications on the second round,” she said.

In terms of changes that could make academic research more sustainable, Dr. Wolberg said that the predictability of the budget process is just as important as the amount of funding coming in. “Not being able to decide on a budget sets off a series of downstream events that leads to very long delays between the submission and the grant award and decreased funding when it does come in,” she said. “The lack of reliability is something that in a very real fashion affects the ability to do science and live lives in a steady way.”

Faster turnaround between proposal submission and the awarding of grants would also make it easier to predict the real expenses associated with a given grant, Dr. Wolberg said.

Ms. Rasouli said that AAMC and the Ad Hoc Group for Medical Research have moved away from setting a single marker — like doubling NIH funding — and instead are pushing for predictable, sustained growth above inflation. Specifically, there should be growth of 4% to 6% above biomedical research inflation. For FY2025, that would be a $4.2 billion increase over FY2024, she said.

There is still an opportunity to create bipartisan support for an NIH funding increase, said Eleanor Dehoney, senior vice president of policy and advocacy at Research!America. Medical research is a “kitchen table” issue that stimulates the economy and creates real value for American families, she said, but lawmakers need to be reminded of the value of science.

The key is to connect the work of the NIH back to lawmakers’ communities. “Ninety percent of NIH funding goes to the individual states. It’s not a Washington, D.C., institution. The dollars are at work locally in every state and territory in the U.S.,” Ms. Dehoney said.

References

1. Congressional Research Service. National Institutes of Health (NIH) funding: FY1996-FY2025. June 25, 2024. Accessed June 26, 2024. https://crsreports.congress.gov/product/pdf/R/R43341.
2. Galkina Cleary E, Jackson MJ, Zhou EW, et al. Comparison of research spending on new drug approvals by the National Institutes of Health vs the pharmaceutical industry, 2010-2019. JAMA Health Forum. 2023;4(4):e230511.
3. United for Medical Research. NIH’s role in sustaining the U.S. economy: every state benefits. 2024 update. March 2024. Accessed June 26, 2024. https://www.unitedformedicalresearch.org/wp-content/uploads/2024/03/UMR-NIHs-Role-in-Sustaining-the-US-Economy-2024-Update.pdf.
4. Kaiser, J. Final NIH budget for 2024 is essentially flat. Science. March 21, 2024. Accessed June 26, 2024. https://www.science.org/content/article/final-nih-budget-2024-essentially-flat.
5. Rathmell WK. Fiscal year 2024 appropriation brings clarity and difficult choices. National Cancer Institute. April 4, 2024. Accessed June 26, 2024. https://www.cancer.gov/grants-training/nci-bottom-line-blog/2024/nci-fy-2024-appropriation-brings-clarity-and-difficult-choices.
6. National Institutes of Health, National Heart, Lung, and Blood Institute. FY 2024 funding and operating guidelines. Accessed June 26, 2024. https://www.nhlbi.nih.gov/current-operating-guidelines.
7. National Institute of Diabetes and Digestive and Kidney Diseases. 2024 award funding policy. Accessed June 26, 2024. https://www.niddk.nih.gov/research-funding/process/award-funding-policy.
8. NIH Data Book. R01-equivalent grants: competing applications, awards, and success rates. January 2024. Accessed June 26, 2024. https://report.nih.gov/nihdatabook/report/29.
9. NIH Data Book. R01-equivalent grants: average size. January 2024. Accessed June 26, 2024. https://report.nih.gov/nihdatabook/report/158.
10. National Institutes of Health. NIH to increase pay levels for pre- and postdoctoral scholars at grantee institutions. April 23, 2024. Accessed June 26, 2024. https://www.nih.gov/news-events/news-releases/nih-increase-pay-levels-pre-postdoctoral-scholars-grantee-institutions.
11. Lauer M. Age of principal investigators at the time of first R01-equivalent remains level with recent years in FY 2023. NIH Office of Extramural Research. May 6, 2024. Accessed June 26, 2024. https://nexus.od.nih.gov/all/2024/05/06/age-of-principal-investigators-at-the-time-of-first-r01-remains-level-with-recent-years-in-fy-2023/.
12. National Science Foundation. Graduate enrollment in science, engineering, and health continues to increase among foreign nationals, while postdoctoral appointment trends vary across fields. March 20, 2024. Accessed June 26, 2024. https://ncses.nsf.gov/pubs/nsf24320.
13. National Institute on Aging. Update 4/24/2024: NIA funding line policy for FY 2024. Accessed June 26, 2024. https://www.nia.nih.gov/research/grants-funding/update-4-24-2024-nia-funding-line-policy-fy-2024.