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progress. Their number should be determined only by scientific merit and need and they should be funded adequately.

The notion of "pipeline" is central to the future of research activity. We support the recommendations of the National Academy of Sciences regarding the appropriate number of research trainees in the National Research Service Award (NRSA) Program.

A final area of great concern is the Biomedical Research Support Grant (BRSG). We recommend its funding at the FY 1989 level. While the funds involved are a minuscule portion of the NIH budget, their value is very high. Over the years, they have been a major mechanism for supporting young scientists in establishing themselves prior 10 reaching the point where they may be funded through the normal competitive process. They have bridged a few months between grants of senior research scientists, have provided just a small amount of dollars needed for additional temporary personnel or computer time, and have been a lever in the total process of academic medical research. Their very Nexibility makes their availability imperative.

ADAMHA

For Alcohol. Drug Abuse, and Mental Health research, we recommend for FY 1992 $1.254 billion. This compares with $992 million in FY 1991 and the Administration's request of $1.073 billion. The Congress' recent substantial increases of funding for ADAMHA research manisest its leadership in our society in confronting "closet sickness” that, because of misguided social mores, for so long could not be talked about and, therefore, could not be studied scientifically. As the Committee well knows, great strides have been made in many areas within the ADAMHA jurisdiction.

In the area of mental health, thousands of people who might only a few decades ago have spent their entire lives in the darkness of institutions because of schizophrenia and depression, now, through the assistance of medications developed through research, lead complete and productive lives. There are numerous national plans focused on the disorders in children and adolescents or on specific diseases. Parallel progress in

medical research will allow study of the genetic aspects of mental illness and interrelationships of dnig dependence and other disease. One needs only to note that alcoholism is estimated to cost the nation substantially more than $100 billion every year to recognize the validity for more research in this agency.

Our recommendation, as in the case of NIH, is for funding approximately one third of project grants recommended by study sections. Similarly, we propose a funding level for research centers beyond the Administration's request. Quite deliberately, we endorse the funding of trainees at a level substantially beyond FY 1991. These areas of research have been playing "catch up" for a long time while producing remarkable research findings in the face of shortfalls in support. We recognize that unless we do more training of the next generation, there simply will be an inadequate number of scientists in the near future prepared to capitalize on the research of an earlier generation.

One final observation. In recent months, the subject of indirect costs and how they are reimbursed and monitored has been in the press and other media. Because the currency of research universities above all else is credibility, our memberships are committed to working with the appropriate Congressional committees and federal agencies to assure in as quick a time as is practical that our house is entirely in order with regard to the indirect costs charged to federal research activity. In the meanwhile, it is exceedingly important that the Congress, under its own serious fiscal pressures, not embark on temporary or expedient actions that might appear to be dealing with one or another problem. There may be a real need for changing the current A-21 system for determining proper indirect costs. That will have to be done with expertise and with evaluation of the implications of every step. Talk that we hear of the possibility of across-the-board cuts in appropriations subcommittees of indirect costs is unnerving in part, obviously, because of the loss of research funds that such an action involves but also because it implies desperate acts in face of troublesome circumstances. We urge the Subcommittee to take no unilateral action regarding indirect costs but to encourage all parties to the current discussions and activities to bring this matter to a positive closure for our mutual clientele, the taxpayers of the United States.

Senator ADAMS. Thank you very much, Doctor. I want to turn to Senator Specter here in a moment, but you have at the end of your statement a proposal for changing the OMB A-21 system for determining proper indirect cost as a way of moving toward potential control of costs at universities.

Now as a former Cabinet officer, I am familiar with both circular A-21 and circular A-22, one applying to in this case universities. The other is more generalized and applies to departments and to nonuniversity functions.

Do you want to give me any thoughts on how you believe or what changes you might propose to A-21 in terms of apportioning or determining proper indirect costs? You can do this in writing if you prefer. I ask that because I spent last weekend at my university discussing this with the dean of health sciences. We do not have any problems such as Stanford has, but he says they sure have a lot of auditors out there.

I do not want to put words in your mouth, but you can tell me in your own words. I think what you are saying is that a more direct system or statement might prevent a lot of audits and a lot of time being spent that is presently being spent by both administrative and other staffs to correct this problem in a simpler fashion.

Dr. ASBURY. Well, it is true that for each platoon of auditors that the Federal Government sends to investigate, the universities have to hire their platoons of auditors to deal with them in turn.

Senator ADAMS. The land grant colleges will usually have a group of legislative auditors, too.

Dr. ASBURY. I think the intent of that paragraph to which you refer is to make sure that the approach to changes in indirect cost administration are done carefully and thoughtfully and not in precipitous response to some of the recent public happenings.

Let me, however, turn to Jerry Roschwalb, who is the administrator for the land grant colleges and State universities. Perhaps he could add a word.

Senator ADAMS. Mr. Roschwalb, nice to have you with us.

Mr. ROSCHWALB. Yes, Senator. I think you have already answered the question in the question. Nobody today would doubt that the system that is in place is not perfect. It lacks precision. It is the lack of precision that gets people into difficulty. It allows people to push at the edges when they do not know where the edges exactly are.

What was proposed in the Pings report 2 years ago before this became a major public event was the necessity for OMB to sit down and examine and in some places perhaps establish fixed rates and administer costs that all could agree on and thereby avoid a lot of problems over whether you were responding correctly or not responding.

I do not think what we are talking about now is about aberrations and extraordinary circumstances. I think your university, University of Washington, the private institutions of the State, face the same problem. I do not think they face the multitude of the problems because they do have those layers. The State auditor is always on their backs, which is a healthy thing. Private institutions, by having less auditing, can run into more difficulties at times, and also they are more desperate.

I think that what has happened in the past few months has been a positive thing, despite the headlines and the pain, in that a lot of people are going to get down and try to set up a simpler system that will guarantee every penny is spent the way it is supposed to be spent.

Senator ADAMS. Thank you very much.
Senator Specter.
Senator SPECTER. Thank you, Mr. Chairman.

We will do our very best. The National Institutes of Health has fared very well in the course of the past decade, notwithstanding the budget constraints, and we very much appreciate the advances which have been made on scientific research. They are overwhelming. What we frequently have to do is pick and choose among the competing success stories.

We are very well aware of the needs and very well aware of the opportunities, and we will do our very best. It is a shrinking pie, as you know. When the time comes to make the allocations, it is extremely difficult. I am just being repetitious now to tell you we will do our best. Dr. ASBURY. Thank

you. Senator ADAMS. Thank you, Senator.

Thank you very much for your testimony and particularly for your testimony with regard to the circulars. I appreciate that. STATEMENT OF DR. JOE D. COULTER, UNIVERSITY OF IOWA COLLEGE

OF MEDICINE, ON BEHALF OF ASSOCIATION OF AMERICAN MED.

ICAL COLLEGES Senator ADAMS. Our next witness is Dr. Joe D. Coulter, University of Iowa College of Medicine, for the Association of American Medical Colleges.

Doctor, welcome to the committee. We will be pleased to hear your testimony.

Dr. COULTER. Good morning, Senator. I am Dr. Joe Coulter, and this morning I represent the Association of American Medical Colleges, or the AAMC. The AAMC thanks this committee for its continued support of medical research and for health professions education support.

The administration's fiscal year 1992 budgets for NIH and ADAMHA fall short of the levels necessary to take full advantage of the critically important and currently available scientific opportunities. The AAMC supports the fiscal year 1992 proposal of the ad hoc group for biomedical research funding which calls for a $9.77 billion budget for the NIH and a $1.254 billion budget for ADAMHA, the Alcohol, Drug Abuse, and Mental Health Administration, for research and for research training.

This proposal, the ad hoc group's proposal, provides increased support for investigator-initiated research, which is, of course, the cornerstone of this Nation's biomedical research effort.

However, the association is also concerned that the NIH Institutes and the ADAMHA Institutes may be forced to cut program project and other center grants to support a greater number of the RO-1 grants called for in this last year's reports by the Appropriations Committees. This strategy would, of course, adversely affect the types of cooperative studies essential to clinical applications of basic research and would markedly destabilize the institutions where NIH-funded research is conducted. This must not happen.

Another program critical to the application of basic research is the General Clinical Research Centers Program which provides specialized facilities and resources for multidisciplinary clinical research. This program has been chronically underfunded during the last several years and deserves certainly additional funding above the administration's request.

The association is concerned also about the administration's proposal to eliminate the BRSG, or Biomedical Research Support Grant Program. Institutions, of course, use BRSG funds in a timely and cost-effective manner to address institutional needs unmet by other NIH support mechanisms. The AAMC strongly recommends that the BRSG funding be restored to its fiscal year 1989 level of $55 million.

The AAMC also urges that you reject the administration's proposal to cut funding for the NÍH's Shared Instrumentation Grant Program. The administration would cut this program by 75 percent. We would like to see a restoration in this funding mechanism.

Regarding health professions training, the administration has again recommended elimination of a number of programs to train primary care health professionals who are acting and serving to improve access to health care in underserved areas.

The AAMC requests that the Congress reject the administration's proposed cuts in the Family Medicine Departments Program. We would like to see Congress support these programs in family medicine residency training, in general internal medicine, and in the general pediatrics residency programs and fund them at the authorized levels.

The AAMC also recommends $26 million for Federal training programs in geriatrics and geriatric faculty development. Congress, we would hope, could appropriate $23 million for the area health education centers, or the AHEC programs, and the $8 million called for in the Health Education Training Centers Program which serve as important physician and retention tools serving the health needs of rural America. Finally, the AAMC urges that this subcommittee take leadership

rejecting the administration proposal to phase out the Health Education Assistance Loan Program and restore the necessary funds for this loan program to the 30,000 health profession students who need these.

PREPARED STATEMENT

We look forward to working with the members of this committee. We want to thank them for their past support. We look forward to working with the subcommittee staff in meeting these objectives.

[The statement follows:]

STATEMENT OF DR. JOE D. COULTER

The Association of American Medical Colleges (AAMC), which represents all 126 accredited U.S. medical schools and their students, 420 major teaching hospitals and 92 professional and academic societies, appreciates this opportunity to comment on the FY 1992 appropriations for the Department of Health and Human Services. The Association's members, who play a major role in implementing the federal government's programs for medical research and health professions training, commend this Subcommittee for its continued support of the research and education programs under its purview.

Medical Rescarch -- The investment that the Federal Government has made in medical research has enabled the United States to develop a comprehensive system of researchers, technicians and laboratories to explore and understand the nature of the diseases and disabilities that affect millions of Americans. However, the Administration's FY 1992 budget requests for the National Institutes of Health (NIH) and for the research and research training programs of the Alcohol, Drug Abuse and Mental Health Administration (ADAMHA) demonstrate a lack of recognition of the essential role that this investment has in the pursuit of improved health through research. These requests fall short of the levels necessary to take advantage of critically important and currently available scientific opportunities and to provide sufficient support for the research infrastructure.

It is commendable that the Administration at last attempts to address the substantial gap between scientific opportunities and the resources available to NIH and ADAMHA 10 take advantage of that potential. However, there is a serious gap between the Administration's proposal to award additional research project grants and the dollars that have been requested to fund the projected number these grants. Attempts to buy research "on the cheap" can only impede scientific progress and inhibit its contributions to improvements in human health.

The AAMC supports the FY 1992 proposal of the Ad Hoc Group for Medical Research Funding for $9.77 billion for the NIH and $1.234 for ADAMHA research and research training. This represents an increase of $1 billion over the Administration's request for the NIH and $181 million over the President's budget for ADAMHA

The Ad Hoc Group proposal recognizes the importance of investigator-initiated research as the cornerstone of this nation's medical research effort. It is essential to provide for sustainable growth for investigator-initiated research. At the same time, the Ad Hoc Group believes sound funding policy must be based on a determination by scientific experts of the costs necessary to conduct the proposed research. Thus, a significant portion of the increase over the Administration's budget proposed by the Ad Hoc Group represents the funds necessary to support research project grants at historic study section recommended levels.

The fundamental scientific knowledge gained through basic research is only the first step in the continuum of effori necessary to accomplish the goal of the NIH and ADAMHA: the use of science to improve the health and well-being of the American people. To achieve this goal, this nation needs a comprehensive research agenda that supports not only basic research but also the application of the results of that research to clinical settings. The Association is concerned about reports that NIH institutes may be contemplating radical cuts in program project and center grants in order to fashion a greater number of RO-1 grants. If this strategy is followed by all institutes, it will seriously and adversely affect the types of cooperative studies essential to converting basic knowledge to clinical applications, and will markedly destabilize the institutions in which NIH-funded research is carried out. This must not happen.

Another program that is critical to the translation of basic research to clinical applications consists of the General Clinical Research Centers (GCRCs). GCRCs provide specialized facilities and resources for clinical research into the cause, prevention, control and cure of human diseases. These centers support multidisciplinary and multicategorial research. Although the Administration has requested a 6.3 percent increase for GCRCs for FY 1992, this program has been chronically underfunded during the last several years and deserves additional funding above the Administration's request.

The Association also is concerned that while the Administration requests a significant increase in funds for research project grants, it proposes to eliminate or severely reduce two critically important programs at the NIH. The Administration proposes to eliminate the Biomedical Research

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