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Testimony on The National Institutes of Health's (NIH) FY 1998 Budget by Dr. Harold Varmus
Director, National Institutes of Health
Accompanied by Dr. Ruth Kirschstein, Deputy Director, NIH Dr. Wendy Baldwin, Deputy Director for Extramural Research, NIH Dr. Michael Gottesman, Deputy Director for Intramural Research, NIH Mr. Anthony Itteilag, Deputy Director for Management, NIH Ms. Francine Little, Director, Office of Financial Management, NIH and Mr. Dennis P. Williams, Deputy Assistant Secretary , Budget, DHHS

U.S. Department of Health and Human Services

Before the House Appropriations Committee, Subcommittee on Labor, Health and Human Services, Education and Related Agencies
February 26, 1997

I am pleased to present the President's budget request for the National Institutes of Health for Fiscal Year 1998, a sum of $13.078 billion, an increase of $337 million (or 2.6%) above the FY1997 appropriation.

The pace of medical research: Retrospective

This is the fourth year that I have been privileged to represent the NIH at this Committee's proceedings. As on previous occasions, the Institute Directors and I will soon provide you with a summary of remarkable scientific accomplishments from the past year and a description of some exciting paths our research is likely to take in the coming year. This annual process of recounting our performance and predicting future productivity is important, stimulating, and necessary. But it should not obscure some essential features of our activities: that our ultimate task, the conquest of disease, is formidable; that the course of progress is best measured over many years or decades, rather than over a single year; that scientific advances require a long-term investment in training and facilities, as well as research projects; and that the benefits of research are unpredictable, demanding work on a broad range of topics to achieve success with even a single problem.

Some of these features are dramatically illustrated by recent events in our battle against the human immunodeficiency virus (HIV) and the acquired immunodeficiency syndrome (AIDS). In the past year, the world has learned that many people with AIDS can experience dramatic improvement after treatment with a new class of anti-HIV drugs, called protease inhibitors, especially when combined with another class of drugs, called reverse transcriptase inhibitors. Although far from perfect, such potent anti-viral agents are unprecedented in the history of virology, and the achievements have been appropriately heralded in many news stories, including New Year cover stories in the lay press (Time magazine) and the science press (Science magazine).

But the history of these accomplishments encompasses much more than a single year; it reaches back over many years and in many directions. It extends to the early isolation of retroviruses from birds and rodents, as long ago as 1910. To the identification in the 1970's of retroviral enzymes---reverse transcriptase and protease---that now serve as targets for the anti-viral drugs. To the determination of the three-dimensional structure of these enzymes a few years ago. To the development of inhibitors of cellular proteases over twenty years ago for the treatment of hypertension.

To the lengthy training of investigators competent to pursue basic science, drug discovery and development, and clinical testing. And to the strength of our nation's laboratories, developed over decades, in governmental, academic, and industrial sectors.

The pace of medical research: Prospective

The breadth and depth of the investments required for the success of protease inhibitors underscore the importance of the strong bipartisan support that the NIH has received for the past fifty years. It is our responsibility to bring here each year new signs that such continued confidence is warranted and likely to produce future dividends. Thus, while we can take pride in end products, such as protease inhibitors, it is even more important to showcase recent discoveries, especially those findings from which many lines of investigation are likely to grow and measures to combat disease are likely to develop.

To illustrate this point, I would like to refer again to the field of HIV research, this time to describe a recent, long-awaited finding that holds special promise. Soon after the discovery of HIV in the early 1980's, investigators found that CD4, a well-known protein on the surface of certain T lymphocytes, was required for HIV to attach to and infect target cells. But it was also learned that at least one other protein was required, and those proteins---the so-called co-receptors---remained elusive for many years.

About one year ago, a research group in the NIH intramural program used an ingenious detection method to unveil co-receptors as members of a class of cell-surface proteins we already knew a great deal about---proteins that normally allow cells to detect secreted signaling molecules called chemokines. This discovery was especially exciting because another group of NIH intramural scientists had shown that certain chemokines could interfere with infection by HIV. Now we recognize that the interference is due to blockade of a co-receptor. Recently, some individuals were found to carry mutations that prevent production of a co-receptor. Because these people are actually resistant to infection by HIV, yet otherwise normal, co-receptors have emerged as prime targets for therapeutic and preventive strategies against HIV, stimulating a frenzy of experimental activity towards those goals.

Recent culminations and inspirations

For dramatic purposes, I have chosen to present in detail two paradigms of success---one representing culmination, another inspiration---from the domains of AIDS research. But other examples abound.

The culminations are visible as practical health benefits, often accompanied by economic benefits:

  • The first successful treatment for stroke, using recombinant tissue plasminogen activator (tPA).
  • Increasing use of cell growth factors to protect patients against the bone marrow toxicities of cancer and AIDS therapies.
  • Declining mortality rates for many cancers, including some common ones.
  • Reduction in disability rates among the elderly.
  • The virtual elimination of Hemophilus influenza as a cause of childhood meningitis, due to widespread use of a new vaccine.
  • Recent inspirational discoveries are also legion, especially in the fields of genetics, molecular biology, and neurosciences:
    • The genomes of baker's yeast and several bacteria (including the experimental warhorse, Escherichia coli) have been fully sequenced; a detailed map of the human genome as been assembled and posted on the Internet; and innovative technologies are being harnessed to understand this genetic cornucopia.

    • The locations of still unknown genes implicated in Parkinson's disease, prostate cancer, and other diseases, have been narrowed to small chromosomal regions, implying imminent isolation; and genes involved in many other disorders (such as retinitis pigmentosa, polycystic kidney disease, many birth defects, basal cell carcinoma, hemochromatosis, and some forms of diabetes) have been isolated and characterized.

    • The precise changes that occur in genes during our lifetimes are telling us how environmental agents, like tobacco and sunlight, cause cancer by inducing mutations, and how normal mechanisms for correction of DNA can fail, allowing harmful mistakes to persist in our genetic material.

    • Experimental manipulation of genes in mice has produced new animal models for studying many diseases (including Alzheimer's Disease, cardiac and vascular diseases, developmental defects, drug abuse, cancers, and others).

    • New imaging methods are informing our understanding of the central nervous system during early development, behavioral change, learning, pain, and emotion, and in a variety of disease states, including drug addiction. Recently-identified molecules that govern the behavior of nerve and muscle cells are providing new prospects for repairing injury and degeneration in the brain and spinal cord.

    • Such advances inspire further work and support our request for appropriated funds for FY1998. To help you see what these funds are likely to accomplish in the immediate future, the Institute Directors and I have identified many of the most exciting topics of on-going and anticipated research and grouped them within six broad Areas of Research Emphasis: the biology of brain disorders, new approaches to pathogenesis, preventive strategies against disease, therapeutics and drug development, genetics of medicine, and advanced instrumentation and computers. These categories of research reach beyond Institute boundaries to highlight the disciplines that we judge to show special promise for further discovery and practical application. You will be hearing from individual Institute Directors during the next two weeks about many specific examples that illustrate why we believe these topics to warrant such high priority.
Clinical research and the new Clinical Research Center

In my appearance before this Committee last year, I emphasized my concerns about several aspects of clinical research, especially the need to reinvigorate, reorganize, and rebuild the Clinical Center at the NIH. Since then, we have received $90 million in FY1997 appropriated funds that allow us to proceed with the detailed planning and initial construction of what will be the Mark O. Hatfield Clinical Research Center. We have established a Board of Governors to oversee management of the Clinical Center, in accord with the recommendations of last year's report by Dr. Helen Smits and her colleagues to the Secretary of HHS and we have initiated plans to collect third party payment for care at the Clinical Center. We have continued to recruit outstanding clinical scientists, improve instruction in clinical research, toughen the review of protocols for clinical experiments, expand outreach to extramural clinical investigators, and forge stronger ties with nearby academic health centers. In the past few months, we have also developed a program to bring medical students to the NIH campus for one or two years to participate in patient-oriented research, in accord with a recommendation by the NIH Director's Panel for Clinical Research. (This important training program, to begin this Fall, is our first collaborative effort with the newly-constituted Board of the National Foundation for Biomedical Research, which received its first appropriated funds, $200 thousand, in FY1997.)

The prospect of a new Clinical Research Center has re-energized clinical investigators at the NIH. Two weeks ago, we held a full-day celebration of our clinical research activities, with many presentations of past, present, and future projects on metabolic, infectious, and genetic diseases; diagnostic methods developed with molecular and novel imaging tools; therapies involving immune manipulation and gene transfer; and various approaches to disorders of the nervous system. For this occasion, Institute Directors prepared statements of their goals for patient-oriented research for the next several years; post-doctoral fellows showed posters outlining recent work; and architects and administrators described plans for the form and function of the new facility. In addition, the intramural clinical research community has proposed measures to strengthen our ability to recruit clinical investigators and to ensure a nurturing environment for them at the NIH.

Other aspects of administrative oversight

Clinical research is only one of many areas that have benefitted from increased administrative oversight during the past few years. The Institutes have recently pledged to develop more interactive information systems, and the NIH is in the process of hiring a Chief Information Officer. Directives from both this Committee and the Administration to limit administrative costs have stimulated the adoption of streamlined methods for peer review, accounting, and other activities; more widespread use of electronic communication; sharing of resources through service centers; and reduced use of FTE positions. In response to your request, Mr. Chairman, we are currently undertaking an extensive study of all of our administrative functions, looking for opportunities to achieve even greater efficiency, without impairing support of the research enterprise and our traditional stewardship of Federal funds.

We have also been vigilant about oversight of our research activities. In the spirit of the 1994 report on intramural research by the Marks-Cassell Committee and the 1995 Bishop-Calabresi report on the NCI, we have continued to review individual intramural research programs; a report on the NIMH program was recently completed, and four others are in progress. Complex activities--- gene therapy, the AIDS program, and clinical research---have been subjected to detailed review, and many trans-Institute areas of investigation---nutrition, pain, sleep, and several specific diseases---are being monitored by special coordinating committees. In addition, we have initiated a process for evaluating the performance of Institute and Center Directors every five years; panels are currently reviewing the activities of the seven Directors with the longest terms of service.

Plans for the proposed budget for FY1998

The President's FY1998 budget for the NIH provides an increase of $337 million over the current NIH appropriation. In line with our traditional priorities, we plan to allocate about 80% of the additional funds ($271 million) to research project grants (RPGs), increasing support for these awards by nearly 4% over FY1997. We expect to increase the average size of both continuing and new awards by 2%, rather than the usual 4%, allowing us to support about 7100 new and competing grants and to achieve an all-time high total of nearly 27,000 research grant awards. (Note that the Department of Commerce has determined the Biomedical Research Development and Price Index [BRDPI] to have been 2.6% in 1996, the lowest rate in many years, consistent with the recent decline in the consumer price index ; we project BRDPI values of about 3% for 1997 and 1998.) The Budget also requests a $30 million increase for the National

Institute for Drug Abuse as part of the Administration's efforts to address the problem of drug use.

We also request $90 million to support continued construction of the Mark O. Hatfield Clinical Research Center in FY1998, along with advanced appropriations of $90 million for FY1999 and $40 million for FY2000, for a total of $310 million, which is required to complete the project by 2002.

I will be pleased to answer any questions you and your colleagues might have.

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