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  • Posted: 05/07/2013

Message to Grantees About NCI Funding and Grant Support for FY2013

On May 7, 2013, NCI Director Harold Varmus sent an email to all NCI grantees informing them of reductions to NCI’s budget for fiscal year 2013.  The reductions, due in large part to sequestration, are spread across NCI’s portfolio to protect NCI’s ability to issue new and competing research project grants.

To the NCI-supported scientific community:

A message that I sent to you in March outlined the general approach that the NCI planned to take to absorb an anticipated reduction in our FY2013 budget. At that time, I promised to provide more information once we received firm figures for the remainder of this fiscal year. Now that the Congress and the Administration (including the Office of Management and Budget, the Department of Health and Human Services, and the NIH Director’s Office) have weighed in, the NCI has learned that our budget for the current year will be approximately $4.78 billion, $293 million less than in FY2012, a reduction of 5.8%. This decrease is attributable in large part to sequestration (a 5.1% decline), with the remainder due to further reductions mandated by DHHS to support various Departmental obligations.

As in the strategy I outlined previously, we have responded to this situation by reducing funds for virtually all sectors of the NCI portfolio in order to limit the impact of the reductions on the most vulnerable part of the budget—our capacity to issue new and competing research project grants. This is not easily accomplished. Over 20% of our budget is comprised of fixed costs—such as salaries for NCI personnel, rents, utilities, Clinical Center expenses, etc. —and cannot be reduced. (And we have also decided not to reduce salaries for NIH trainees. )  That means that the other components of the budget must absorb the entire reduction, lowering their allocations by an average of over 7%. To do this, we have had to make appreciable reductions in ongoing (non-competing) grants (about 6%), centers and other research programs (6.5%), and research and development contracts (8.5%). Similar or even larger reductions were applied to the discretionary parts of other budgets, such as research management and support and the intramural program, in both of which salaries constitute most of the expense.

As a result of these decisions, we can now expect to fund slightly more than 1000 new and competing grants—less, but only a bit fewer, than the nearly 1100 funded in each of the past couple of years. The already low success rates for grant applicants (recently in the range of 13 to 14%) may decline a small degree, but we believe that we have achieved a fair compromise, given the size of the budget reduction overall, our commitments to current grantees, and our several fixed costs.

As in past years, a fuller account of the FY2013 budget will soon be posted on the NCI web site to provide additional details.

Needless to say, no one at the NCI is happy about these reductions, but they are now unavoidable for FY2013. I believe that our goals should be to manage as best we can within these limits, to use the nearly $4.8 billion at our disposal as effectively as possible to make progress against cancer, and to look for opportunities to improve our fortunes in the next year or two. Although I recognize that there may be resistance in Congress to returning our budget to FY2012 levels or better, it is encouraging to note that the President has proposed a significant increase above FY2012 for the FY2014 NIH budget.

Those of us who must govern the NCI in this difficult year thank you for your attention to this matter and ask for your support of our efforts to cope with it.

Harold Varmus
Director, NCI