The Editor’s Corner: The Funding of Biomedical Research -Time for a Change in Direction

Harold Alexander

Biomedical research funding in the United States is at a fateful pass. It wasn’t so long ago that the National Insti- tutes of Health, whose funding is essential to virtually every facility of consequence, used to approve four pro- posals out of every ten submitted; the current level is approximately one in ten, and even this figure is decep- tive in two important respects. First, biomedical research funds, from both government and private sources, while they have nominally increased, have in fact decreased in real, inflation-corrected dollars- at the same time that the number of researchers competing for those dollars has been increasing.

Second, inherent in funding at such a low level (10%) is a cost inefficiency that imposes an oppressive tax on both researchers and the resources that they represent to the nation. To appreciate this, consider the economics of obtaining a competitive grant, viewing the process in terms of Gross National Product. Let us say that the typical proposal costs $10,000 to prepare (including pre- liminary data preparation). To this should be added $1000 in equivalent man-hours spent by reviewers- who are typically unpaid (or underpaid) for this effort-and another $1000 representing the funding agency’s adminis- trative costs. This puts the average share of GNP per proposal at approximately $12,000, most of it for the pre- cious time of the biomedical researcher-time that could have been spent in more directly productive research.

This cost in time and money is justified when the funding rate is high. Indeed, it can be argued that the proposal process plays an important role in focusing, in organizing the researcher’s efforts. At the current hit rate, however, this process becomes wasteful and dis- couraging. Let me use my own department as an example. Over the past two years we have submitted 34 competitive grant proposals and successfully pro- cured $1,200,000 ($600,000 per year). These funds pro- vided approximately one-half of our operating budget. The cost to us of producing these proposals was $340,000, leaving us a net gain of $860,000, or $430,000 per year. This may not seem to be such a bad return until we look at where the money is spent. Most of the pro- posal cost is in expert, professionally trained labor. Half the procured funds go into overhead, equipment, and supply costs. Consequently, we spent $340,000 in highly trained labor to obtain $600,000 to pay these people. In effect, my professional staff spent 57% of their paid time writing proposals!

Journal of Applied Biomaterials, Vol. 2, 55-56 (1991) 0 1991 John Wiley & Sons, Inc. CCC 1045-4861/91/010055-02$4.00

Let us next consider the typical proposal funded by NIH. Since approximately ten proposals are submitted for every one funded, the total cost per funded grant is approximately $120,000. Considering the fact that the average grant is now for a period of five years at a level of $1 million, this may seem to be a justifiable expense. However, that million dollars typically only pays for ap- proximately $200,000 in principal investigators’ salaries. Since the expense of preparing a proposal is mainly prin- cipal investigator time, we must assume that, on average, 60% of the NIH-funded principal investigator time is spent on proposal writing!

I can hear the objections already-denials that not one of you spends 60% of his or her time writing pro- posals. Most probably not. But for every one of you who is lucky enough to obtain a grant, there are nine unsuc- cessful PIS out there who have contributed their time to the process gratis. This time (and money) must be fac- tored into the total.

Funding research at the 10% level is thus short- sighted and exceedingly wasteful. It also drives scores of bright, young investigators from research and fosters an anticollegial dog-eat-dog environment that discourages free scientific exchange. Unless drastic measures are taken, we stand to lose an irreplaceable national re- source: the precious time and energies of our talented biomedical researchers.

An obvious, simple solution to this problem is to in- crease the total amount of funds available for research. This, unfortunately, will not happen in the near future. An alternate, admittedly radical, solution is to change NIH funding procedures to make approval contingent upon the grantee obtaining matching funds from other, nonfederal sources. This would have two primary ef- fects, both largely beneficial to the biomedical research community, to the institutions they serve, and to the na- tion at large.

First, because NIH would be underwriting only half the bill for any given project, the number of funded pro- posals will automatically double. Ah! but you say-that’s just half the story. Just how easy (or hard) do you think it’s going to be to raise that other half of the bill!-the matching funds?

It is reasonable to expect that, under such a system, universities, hospitals, dedicated research facilities, phi- lanthropies, and industry would be more than willing to help fund projects to which NIH has already lent its pres- tigious imprimatur; indeed, sources that previously may have steered away from funding biomedical research on the grounds that they were not qualified to judge a proj-

56 ALEXANDER

ect’s viability or the competence of the applicants would now enjoy, with no additional expenditure, the luxury of a screening committee of consummate experts to pass on these matters.

A second major effect, and the one I anticipate will provoke the most objections, is that funding under this system would be limited to the projects of a small, elite pool of investigators, specifically, those capable of raising such funds on their own or those whose institutions are either willing to provide significant financial support or are instrumental in finding outside investors. The hidden message in this observation is that such a system would be unfair that it would favor researchers at wealthy, es- tablished institutions. Well, perhaps the time has come to concentrate our biomedical research in institutions that are willing and able to make their own substantial contributions of resources (or at least make the effort to

find them elsewhere). As biomedical research becomes more sophisticated, requiring millions of dollars in in- strumentation, this approach may in fact be the only really viable one.

The combined effect of doubling available funds and restricting the potential principal investigator pool should bring the NIH approval rate back to the 40% range that existed in past decades. The alternative to taking such a radical step is far from pleasant. The con- sequences, to our nation and to the world, of retaining the current wasteful funding mechanism will be the loss of the potential contributions of disaffected researchers, who will undoubtedly choose more productive and less frustrating careers.

I hope the views expressed here will serve as a cata- lyst for productive dialog, and I wholeheartedly encour- age readers to send me their comments.