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Trump proposed budget cut unites Congress to defend NIH

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By Mari Serebrov
Regulatory Editor

Republicans and Democrats alike continue to circle the congressional wagons around the NIH, as the storm clouds of a proposed 24 percent budget cut gather overhead.

President Donald Trump's 2018 budget blueprint, which is slated to be fleshed out early next week, is "a dark cloud" that would decimate the NIH, Rep. Nita Lowey (D-N.Y.), ranking member of the House Appropriations Committee, said Wednesday at a subcommittee hearing on biomedical advances being made at the NIH. The president's proposed NIH cut would result in nearly 90,000 lost jobs, a $15 billion reduction in economic activity, delayed cures, lost American lives and a ceding of global stature, Lowey noted.

The president's plan would cut the NIH budget to $25.9 billion – $5.8 billion, or 18 percent, less than its $31.7 billion budget for fiscal 2016. The proposal is $8.18 billion, about 24 percent, less than the $34.08 billion fiscal 2017 budget Congress granted the NIH earlier this month when it ignored Trump's request for a $1.2 billion cut for the remainder of the fiscal year, which ends Sept. 30. (See BioWorld Today, March 17, 2017, and May 2, 2017.)

To achieve the savings, the president's 2018 budget blueprint calls for a reduction in administrative costs, a "rebalance" of federal contributions to research and a major reorganization of the NIH's institutes and centers to focus resources on the highest priority research and training.

It also would shutter the agency's Fogarty International Center, which builds scientific expertise in developing countries, training health care professionals in those countries to detect and address pandemics at the point of origin and accelerate scientific discovery. Fogarty-trained experts are involved in Zika vaccine clinical trials in Latin America and were instrumental in stopping the spread of Ebola in western Africa a few years ago, Anthony Fauci, director of the NIH's National Institute of Allergy and Infectious Diseases, said at Wednesday's hearing.

After more than a decade of declining real dollars for NIH-funded research, the NIH has seen funding increases for the past two years. As a result, the U.S. government is now on track for increasing the agency's funding at the rate of inflation plus 5 percent, Rep. Katherine Clark (D-Mass.) said. Even at that, other countries are exceeding the U.S. investment in biomedical research. Consequently, Clark said, private U.S. companies are in danger of losing their talent to overseas opportunities.

NIH Director Francis Collins testified that U.S. efforts to develop new medical treatments have been the envy of the world, largely due to the basic scientific research funded by the NIH that the private sector can't afford to do. "We have an amazing engine" for discovery, Collins said, but other countries are now following that model.

"China has read our playbook. They want to become us. I don't blame them," Collins told the subcommittee. China is well on its way toward that goal. By 2021, it will be spending more on biomedical research than the U.S., as it continues to invest in building universities and laboratories, Collins added.

OVERHEAD AND SHUTDOWNS

As he had at an earlier hearing on the NIH budget, Rep. Andy Harris (R-Md.) pointed out that the agency paid $6.4 billion in indirect costs last year – more than enough to cover the president's proposed cut. Noting that the 30 percent the NIH pays on average for indirect costs is triple what the private sector is paying, Harris questioned what he called a double standard for taxpayer-funded grants. (See BioWorld Today, March 30, 2017.)

Collins responded that university presidents have explained that they can absorb the research costs for nonprofit grants because they're such a small portion of their research programs, but research institutions couldn't absorb the overhead costs for NIH-funded grants, which account for the bulk of their biomedical research.

Collins also clarified that the NIH does not negotiate the indirect costs. Those are set every four years in accordance with the White House Office of Management and Budget guidance. He did acknowledge there's opportunity to reduce the overhead cost associated with NIH grants by eliminating some of the bureaucratic red tape wrapped around the grants.

Referencing threats to the possibility of a government shutdown later this year over the 2018 budget, Rep. Mike Simpson (R-Idaho) asked Collins to describe the impact the 16-day shutdown in 2013 had on the NIH.

It was "the darkest day" in his experience at the agency, Collins said, and it "was purely destructive." Research stalled. Peer reviews had to be cancelled. But worst of all, the NIH clinic had to turn away new patients, many of whom viewed the clinic as their last hope.

That could have been avoided, Harris said, had President Barack Obama used his authority to exempt the NIH from the shutdown because of its importance in protecting life.

Collins also was asked about the impact of the hiring freeze Trump imposed when he took office in January. Such freezes occur every time the administration changes, he responded. The agency is now able to hire to advance initiatives such as the Precision Medicine Initiative and staffing issues are beginning to level out, he said.

FDA USER FEES

The NIH is not the only agency Congress is rallying behind to protect from budget cuts. Monday, Health and Human Services Secretary Tom Price asked Congress to support the president's 2018 budget plan to recalibrate FDA user fees for drugs and medical devices so the review programs would be supported 100 percent by user fees, with no tax-dollar funding triggers. Currently, user fees cover at least 70 percent of the cost of reviews of drug applications and more than 30 percent of the cost of device reviews.

Price's request came four days after the Senate Health, Education, Labor and Pensions (HELP) Committee voted 21-2 to send the FDA Reauthorization Act (FDARA) to the Senate floor for a full vote. The bill, which reflects the agreements negotiated last year between industry and the FDA, sets the user fees for the next five years and must be passed by Sept. 30. Recalibrating the agreement would require new negotiations with industry. (See BioWorld Today, May 12, 2017.)

Before the committee vote last week, HELP Chairman Lamar Alexander (R-Tenn.) noted the urgency of getting the bill to the president before Congress breaks for its August recess, otherwise the FDA would have to begin sending layoff notices to more than 5,000 employees to notify them that they could lose their job in 60 days.

Responding to Price's request, Sen. Patty Murray (D-Wash.), ranking member of the HELP Committee, said the administration's proposal "would upend our work and if implemented, leave the FDA hamstrung and without the federal investments it relies on to carry out its important public health work."

On the House side, the Energy and Commerce Subcommittee on Health signaled its answer by scheduling a markup session Thursday to vote on FDARA and releasing four videos stressing the importance of the bill in developing new cures. In its hearings on the individual user fee agreements, the subcommittee pitched FDARA as a way to implement and further the provisions of the 21st Century Cures Act that was passed last year.

"We're ready to advance the underlying bill and proceed with the timely reauthorization of these important programs," Rep. Michael Burgess (R-Texas), chairman of the subcommittee, said Tuesday in announcing the markup session. "[FDARA] will ensure that FDA has the tools they need to deliver safe and effective products to patients more quickly."

By law, the FDA had to submit the negotiated fee agreements to Congress Jan. 15 – five days before Trump was sworn in as president. This marks the first time the agreements came due during an administration change.