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Statement on President's Budget Request for NIH

Statement of
Harold Varmus, M.D.
Director, National Institutes of Health
Department of Health and Human Services
House and Senate Appropriations Subcommittees on Labor,
Health and Human Services, and Education
February 23-24, 1999

Mr. Chairman and Committee Members:

I am pleased to be here today to represent the NIH for the sixth time in the annual appropriations process. In his budget plan for FY2000, the President is requesting $15.933 billion for the NIH, an increase of $320 million or 2.1 percent above the amount appropriated to us in FY 1999. By any measure, the amount we received in FY 1999 from the Congress and the Administration — an increase of $2.030 billion or 15 percent above our FY 1998 level — was dramatic, especially in an era of fiscal austerity. This generous FY 1999 budget has allowed us to initiate many new and important programs, which I will discuss later, and to improve conditions throughout the medical research enterprise. The funds requested for FY 2000 will permit us to continue our FY 1999 initiatives and will bring us just above the level outlined last year in the President's plan to increase the NIH budget by 50 percent over five years.

Rationale for Support of the NIH: Winning the War Against Disease

Throughout the world, the NIH is considered the leading force in mankind's continuing war against disease. Over several decades of medical research, we have learned that disease is a complex and evolving enemy — one that draws upon the combined forces of heredity, environmental insults, infectious agents, the aging process, personal habits, and other factors, and acts upon a variety of tissues and organs. And we have also learned that disease can be fought in many different ways — with medicines and vaccines, with surgical procedures and medical devices, with behavioral modification and environmental remediation.

Our enlarging conceptions of disease and the means to control it underscore the magnitude of the war that needs to be waged. As in military encounters, the strategy includes the gathering of intelligence about the enemy — the causes of disease, its distribution in the human population, and its progression in individuals — and about the terrain on which the battle will be fought — the cells and organs of the human body. In addition, the battle demands the development of weapons (drugs and procedures to prevent and treat disease) and the training of soldiers (laboratory and clinical scientists). All of these are functions that the NIH has assumed, often in collaboration with our partners abroad, in other agencies and funding organizations, and in the private sector.

At the end of a century in which the average life expectancy in the United States has increased by nearly thirty years, victory over disease and disability has become an understandably popular and realistic goal. Support for this goal has been further enhanced by the advent of an era in which the world is largely at peace and our nation is experiencing remarkable economic prosperity. These factors have contributed greatly to the growth of our budget over the past few years. But interest in the work of the NIH has also expanded as the public learns more about the evolving threats to health that accompany the aging of our population, the appearance of new and altered infectious agents of disease, the growth of components of our population that have traditionally experienced the poorest health, and the unequal distribution of medical resources among nations and segments of our own society. Because the burdens of illness — the cost of care, the loss of manpower, the psychological impact, and the raw suffering — have such detrimental effects on social groups, the fight against disease is increasingly viewed as one of the great communal responsibilities of advanced nations.

The Administration recognizes the several responsibilities assigned to the NIH in this fight: to amass intelligence about biological systems and about the mechanisms by which they fail; to develop defenses and weapons against disease; to train the personnel who will wage the war; and to transmit news of progress on the battle fronts to the public and providers of health care.

Progress Against Disease: Intelligence Gathering

The NIH has a rich history of success in its many roles in the battle against disease. In their opening statements, the Institute and Center Directors will provide many examples of new weapons that they have developed for preventing and fighting disease effectively. I will instead highlight some recent accomplishments that illustrate the stunning power of our intelligence gathering devices and the speed with which new intelligence is translated into new battle strategies.

The first — the result of a ten year project sponsored jointly by the NIH and the Welcome Trust in England and a watershed event in the history of biology — is the complete deciphering of all of the genes of a multicellular organism, the intensively studied roundworm, Caenorhabditis elegans. This tiny organism has a delicious anatomical simplicity; the adult form contains only 959 cells, each with known physiological functions and an origin precisely traceable back to the fertilized egg (Figure 1). Despite its small size, C. elegans performs many of the activities enjoyed by mammals — digestion, sensation, sexual reproduction, muscular movement — and has fully one-quarter as many genes (19,099 compared to the 80,000 estimated for man) (Figure 2). Most significantly, the similarity of many worm genes to human genes is readily recognizable: over 70 percent of the human genes catalogued to date are related to genes present in the worm. These include several genes implicated in important human diseases, including Alzheimer's Disease, diabetes, cancer, and musculoskeletal disorders. Because gene functions and interactions are much easier to decipher in worms than in mammals, many important features of biological systems and their disorders are being learned swiftly from this tiny organism, now that every one of its genes is known.

Another important means for gathering critical intelligence about biological systems depends on the increasingly powerful set of tools used to survey the three dimensional organization of proteins. This year, two dramatic discoveries have been made about proteins that are associated with cell membranes and therefore notoriously difficult to decipher. One such class of proteins — the potassium channel proteins — form a conduit that allows the efficient passage of potassium, the charged atom (ion) needed for electrical impulses in the brain, muscle, and sensory organs, from the outside to the inside of cells. The structural features of one such potassium channel, isolated from the soil bacterium, Streptomyces lividans (Figure 3), can explain how potassium can move so quickly through these fatty membranes and how the channel can discriminate so precisely between potassium and very similar ions, like sodium and calcium. Because the makeup of potassium channels is so similar from one to the next, the structure determined this year can be used to predict what others will look like, including the several hundred potassium channels in man and other mammals and the 80 or so known from genomic sequencing to exist in the worm, C.elegans. This is important because mutations in human genes that instruct cells to make potassium channels cause certain forms of epilepsy, abnormal heart rhythms, congenital deafness, and likely other disorders. And the recently deciphered shape of the channels can now serve as a guide to the design of drugs that might beneficially affect their behavior.

Equally complex information has been obtained about another group of membrane proteins — two proteins on the membranous surface of HIV and two on the surface of susceptible human cells (Figure 4). These are the four proteins that interact to allow HIV to gain entry to cells, initiating infection and ultimately disease. Studies of the shapes and interactions of these proteins — and of the crucial changes in shape that accompany the steps in viral entry — have provided new ideas for the design of vaccines and the synthesis of drugs intended to block the virus from entering cells. Indeed, in just the few months since these changes in shape were described, vaccine strategies for attacking the virus during its journey into cells have been successfully tested in model systems, and chemicals that interfere with the entry process have been synthesized. Thus, intelligence gathering through structural biology provides promising ways to fight viral infection — by HIV or other viruses — with immune responses and chemistry.

Spending the FY 1999 Appropriation

These and many other recent successes of biomedical science have helped to inspire increased appropriations for the NIH. Nevertheless, the $2 billion increase awarded to the NIH in FY 1999 has understandably prompted concerns about our planning practices; some have even wondered openly whether we could usefully spend the new funds in one year. Under the President's Budget for FY 2000, the NIH will mainly continue FY 1999 programs, so it is especially appropriate to review here the spending patterns and initiatives undertaken this year in order to demonstrate that we are spending the increase wisely now and will continue to do so in FY 2000.

To facilitate the presentation of so many scientific activities, conducted through a wide variety of mechanisms in many Institutes and Centers, I have displayed the categories of spending in a series of charts (Appendix A) that indicate the amounts of new money devoted to research project grants, centers, research and development contracts, intramural research, training awards, and other mechanisms, and I have listed some of the specific programs that will be initiated or expanded through each mechanism. The charts also indicate the amounts that will be spent on inflationary increases, salary and stipend increases, and increases in average size of awards in FY 1999. Additional new initiatives, to be undertaken in FY 2000, are described in our Congressional Justification documents, classified within several NIH Areas of Research Emphasis; these include contributions to the Administration's trans-agency plans to improve information technology and bolster defenses against bioterrorism. To maximize funds available for these programs within the President's Budget Proposal for FY 2000, we do not anticipate increasing the sizes of competing or non-competing awards or augmenting salaries or stipends.

The charts that depict our spending of the increase in appropriated funds in FY 1999 and the lists of programs to be added or expanded in FY 2000 are telling reminders of the long- and short-term planning undertaken annually throughout the NIH. Because of the number and variety of research objectives, it is not possible to provide a full account of the programs here. However, many of their goals can be encompassed within four large themes:

(1) Exploiting genomics. All of biology is undergoing fundamental change as a result of new methods that permit the isolation, amplification, and detailed analysis of genes. The completion of the analysis of genomes of viruses, bacteria, and yeast, as well as C.elegans, has dramatically demonstrated the utility of such information and inspired new technologies for analyzing genetic variations and the roles of genes, and the proteins they encode, in health and disease. The NIH is pursuing an accelerated plan to complete a rough draft of the human genome by 2001 and to deliver a finished product by 2003. We have initiated a program to sequence the genome of the mouse, arguably the most significant animal model for human disease, and we are assembling genetic information about several other disease-causing and model organisms as well. This new information will be used to assess predisposition to disease, predict responses to environmental agents and drugs, design new medicines and vaccines, and detect infectious agents, including the agents of bioterrorism.

(2) Reinvigorating clinical research. New developments in genetics, drug discovery, stem cell research, and other fields are creating opportunities for revolutionary change in the practice of medicine — but at a time when clinical research is perceived to be under siege and perhaps even in decline. To confront this situation, the NIH has initiated several new training and career development programs for clinical investigators; intensified our clinical trials activities, including the establishment of clinical trials networks; augmented funding of the General Clinical Research Centers and created other Centers for clinical research on diseases such as asthma, Parkinson's Disease, and mental illness; taken steps to strengthen clinical research in the intramural program, including continued construction of the new Mark O. Hatfield Clinical Research Center; and developed an NIH clinical trials database, in accord with the FDA Modernization Act of 1998. To further expand patient access to clinical research protocols, we have worked with the American Association of Health Plans to begin to define acceptable terms under which their member organizations would refer patients to clinical trials and agree to pay the costs of care for those enrolled in NIH trials.

(3) Harnessing other disciplines. Medical research has traditionally depended heavily on discoveries made by physicists (e.g. isotopes and X-rays), engineers (e.g. biomaterials and instruments), and chemists (e.g. synthetic drugs and laboratory reagents). Recent advances have further increased our needs for scientists in these disciplines and others, including computer science, mathematics, and subfields of engineering. We are trying to meet these needs by attracting scientists in other fields to biology and medicine through program announcements that invite applications from such investigators; the creation of the Bioengineering Consortium (BECON); investment in instrumentation development; participation in the President's Information Technology Initiative (ITI); construction of new beam lines for structural biology at DOE's Synchotron facilities; and development of interdisciplinary training programs and centers for drug development and other purposes.

(4) Eliminating health disparities. Recent epidemiological surveys indicate that the benefits of healthy living conditions and advanced medical knowledge have not reached all components of our own society or all nations on the globe. Varying rates of disease, disability, and mortality exist among people belonging to different ethnic and racial groups, living in different parts of the United States, experiencing different socio-economic status, and engaging in different patterns of behavior. These differences are important points of departure to learn what accounts for the variable burden of disease and to identify targets for efforts to eliminate disparities in health status. Many new research programs at the NIH are intended to understand and to remove the origins of these disparities in the United States and abroad. In our efforts abroad, we are working closely with the World Health Organization, under the new leadership of Dr. Gro Brundtland, and we are giving special attention to infectious diseases (including malaria, HIV, emerging infections, and tuberculosis) as well as many chronic illnesses that pose increasing problems in developing countries as their populations age.

Administrative Functions at the NIH

The large increase awarded to the NIH in FY 1999 has also focused attention on our administrative practices, as well as on our plans to spend the funds, with the legitimate concern that an organization of such size should be operating with efficiency, fairness, and rigor.

In response to similar concerns raised by the House Appropriations Subcommittee in 1997, the NIH contracted with Arthur Andersen and Associates to undertake an extensive review of our administrative functions. The outcome of that study was presented to the Subcommittee last year. This year we can report that implementation of 72 of the 80 recommendations is either complete or in progress. These changes range from the mundane but vital (e.g. marked improvements in mail delivery) to the fundamental (e.g. creating a Center for Information Technology). The CIT, headed by our first Chief Information Officer, is performing several essential roles in response to needs for streamlined administrative practices and to changes in biology that demand more computer science. For example, the NIH has met all of its milestones for achieving Year 2000 compliance for its computer systems, it is improving its methods for preserving clinical and research data in the intramural program, and it is undertaking an extensive review of future computer needs in biomedical sciences. This review, to be completed by June, 1999, has informed our choice of projects within the Administration's Information Technology Initiative for FY 2000.

The organization of our peer review system, largely under the direction of the Center for Scientific Review, is a traditional focus of attention for NIH-supported scientists and advocacy groups; this is especially so with the recent changes that have occurred in biomedical science and the need to design review mechanisms for novel and interdisciplinary research. The CSR has begun a comprehensive reorganization of its study sections, with advice from an external Panel on Scientific Boundaries for Review. In addition, with the advice of the Peer Review Oversight Group, public representatives have been added to review panels, when appropriate.

The NIH has been seeking other ways to extend the already numerous interactions with our various public constituencies. Responding both to the interests of many disease advocacy groups and to the Congressionally-mandated Institute of Medicine report entitled "Scientific Opportunity and Public Need," we have designated Offices of Public Liaison in all Institutes and Centers and in the Office of the Director; established an NIH Director's Council of Public Representatives; begun a revision of our booklet describing the priority setting process; expanded the budget planning activities for FY 2001 to include more public opinion; and planned workshops to examine ways to measure and interpret the burden of disease. In addition, public representatives will participate in the drafting of strategic plans for each Institute and Center and in the review of our GPRA Performance Plan.

Under FY 1999 appropriation law, the NIH is required to establish a National Center for Complementary and Alternative Medicine. We have rapidly formed the Center (final approval was provided by Secretary Shalala on February 1, 1999), chartered a new Advisory Council, nearly finished the search for a permanent Director, and expanded the research portfolio to make full use of the new funds provided for the NCCAM in FY 1999.


In proposing the NIH increase for FY 2000, which is consistent with the goal of increasing NIH's budget by nearly 50 percent over 5 years, the Administration has voiced its support for the NIH's many roles in a multifaceted war against disease. With your continued help, we can insure that these advances occur on many fronts.

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