Please keep in mind what we have for years that young investigators frightened off by wide swings in support cannot be returned to the laboratories as easily as money can be returned to the budget. A sense of stability and commitment to basic research is important beyond a pledge of a certain number of dollars.

I mentioned universities earlier, and I would like to come back to them because NIH funding is so crucial to their conduct of biomedical research.

Universities are a resource that cannot be duplicated and must not be allowed to deteriorate. That is not only my opinion but also the conclusion recently announced by the White House Science Council Panel headed by David Packard and Allan Bromley. They emphasize the importance of university-based research and of the university-Government partnership.

That partnership includes an understanding that indirect cost reimbursement for administration of grants should only be reduced if the administrative burden is reduced. Forcing cost sharing on already hardpressed universities can only be damaging to the strength of their partnership with Government.

The universities need some flexibility in managing complex research projects, and yet the proposed NIH budget would reduce the biomedical research support grants provided to the universities. It would perpetuate the Government proposal to limit the payment for indirect cost of research without invoking the complementary recommendations of the White House Science Council Panel. It would reduce to zero the construction funds associated with research projects, and the biomedical research laboratories and equipment of universities are in need of repair and replacement. To budget for no improvement in facilities or equipment in fiscal year 1987 does not seem a sensible investment policy.

In summary, the NIH budget strikes me as inconsistent with the Federal Government's expressed commitments to the support of basic research. The particular value of basic biomedical research, with its implications for health and for control of health costs, makes a compelling argument against cutting the NIH budget.

It is hard to understand who is served by that cut. If your conclusion is as mine, that no one is well-served, I would respectfully encourage you to restore the NIH budget at least to parity with the rest of the investment in defense and nondefense basic sciences described in the 1987 budget. If you feel that potential payback on investment in the NIH is likely to exceed the investment itself as it has done historically-then I would encourage you to consider additional support. Thank you very much for the opportunity.

PREPARED STATEMENT

Senator WEICKER. Thank you, Dr. Thier. We will be back for questions after everybody has testified.

[The statement follows:]

STATEMENT OF DR. SAMUEL O. THIER

I AM DR. SAMUEL 0. THIER. PRESIDENT OF THE INSTITUTE OF MEDICINE OF THE NATIONAL ACADEMY OF SCIENCES AND I WELCOME THIS OPPORTUNITY TO TESTIFY ON THE BUDGET OF THE NATIONAL INSTITUTES OF HEALTH FOR FISCAL YEAR 1987. ALL BUDGET DISCUSSIONS THESE DAYS ARE NECESSARILY CONDUCTED IN A CONTEXT OF CONCERN ABOUT THE DEFICIT. ALTHOUGH THAT CONCERN IS WELL PLACED. IT SHOULD BE JOINED BY CONCERN ABOUT THE LONG-TERM ECONOMIC AND HUMAN COSTS OF BUDGET-SHAPING ACTIONS BASED ON ARBITRARY FORMULAS OR INADEQUATE ANALYSIS.

THE NIH BUDGET PROPOSED FOR FY 1987 REDUCES EXPENDITURES IN ACTUAL AS WELL AS CONSTANT DOLLARS. INFORMED OF THE CONSTRAINTS NECESSARY ON NEXT YEAR'S SPENDING, NIH HAS REPLIED WITH THE UTMOST RESPONSIBILITY. IT HAS SOUGHT TO MAXIMIZE SCIENTIFIC PRODUCTIVITY BY EMPHASIZING FUNDING OF INDIVIDUAL GRANT PROPOSALS AND ESTABLISHING A NEW CRITERION OF STABILIZ SUPPORT: MAINTENANCE OF AT LEAST 18,000 GRANTS AT ANY GIVEN TIME. THOSE CHOICES, HOWEVER, WERE MADE AT THE EXPENSE OF THE AVERAGE AMOUNT OF FUNDING PER GRANT. THE NUMBER OF RESEARCH CENTERS FUNDED. THE NUMBER OF TRAINEES SUPPORTED. AND THE EXTENT TO WHICH NIH CAN IMPROVE UNIVERSITY FLEXIBILITY, ADMINISTRATIVE SUPPORT, AND FACILITIES. I MIGHT DIFFER WITH SOME OF THE PRIORITIES CHOSEN BY NIH, BUT THEY HAVE MADE A CREDIBLE RESPONSE TO WHAT I VIEW AS STRINGENT CONSTRAINTS. MY CONCERN IS WHETHER THE CONSTRAINTS ARE PRUDENT.

THE NIH IS THE PRIMARY SOURCE OF SUPPORT FOR BASIC BIOMEDICAL RESEARCH IN THE UNITED STATES. THE RESPONSIBLE CONDUCT OF RESEARCH HAS BEEN ACCEPTED BY OUR SOCIETY AS INNATELY GOOD. A REFLECTION OF MODERN MAN'S INQUISITIVENESS AND CREATIVITY. SUCH RESEARCH ALSO IS RECOGNIZED AS ESSENTIAL FOR A TECHNOLOGICALLY ADVANCED SOCIETY LIKE OURS TO CONTINUE ITS ADVANCES AND MAINTAIN ITS COMPETITIVENESS. BASIC RESEARCH BY DEFINITION DOES NOT MAKE A PRODUCT THAT CAN BE USED TO SUPPORT IT. THIS HAS LONG BEEN RECOGNIZED BOTH BY THE LEGISLATIVE AND EXECUTIVE BRANCHES OF GOVERNMENT IN THEIR FUNDING OF IT IN THE PAST. EVEN NEXT YEAR'S BUDGET IN RESEARCH AREAS OTHER THAN

BIOMEDICAL ATTESTS TO THAT UNDERSTANDING. WHY THEN IS THE NIH BUDGET TO BE REDUCED?

A BUDGET FOR THE CONDUCT OF BASIC BIOMEDICAL RESEARCH COULD RESPONSIBLY BE REDUCED IF THE GOALS OF THAT RESEARCH ARE NO LONGER VALUED AS HIGHLY, IF THE RETURN ON PAST INVESTMENT IS FELT TO BE INADEQUATE, IF THERE SEEMS TO BE TOO LITTLE PROMISE OF RETURN ON INVESTMENT IN THE FUTURE, OR IF THE RESEARCH ENTERPRISE IS INEFFICIENT OR MISMANAGED. IF NONE OF THESE CRITERIA ARE MET IT SEEMS FAIR TO ASSUME THAT BUDGET REDUCTIONS PRIMARILY REFLECT AN ATTEMPT TO SAVE MONEY IN THE SHORT RUN. SAVING MONEY IN A TIME OF BUDGET DEFICIT IS PRUDENT UNLESS THERE IS GOOD REASON TO BELIEVE THAT THE LONG-RANGE LOSSES FROM THE LACK OF INVESTMENT FAR OUTWEIGH THE SHORT-TERM SAVINGS.

SURELY THE VALUE OF THE RESEARCH CONDUCTED BY THE NIH CANNOT BE ASSUMED TO BE LESS THAN THAT IN THE OTHER BASIC SCIENCES. IS THE FEDERAL GOVERNMENT NOW TO DIMINISH ITS COMMITMENT TO RESEARCH THAT CONTRIBUTES TO IMPROVING THE QUALITY OF LIFE, REDUCING THE BURDEN OF ILLNESS, PREVENTING DISEASE. AND EXTENDING THE LIFE SPAN?

FUNDING COULD NOT REASONABLY HAVE BEEN REDUCED BECAUSE THE NIH INVESTMENT HAS FAILED TO PAY ADEQUATE DIVIDENDS--PREVENTION OF POLIO AND HEPATITIS, REDUCTION OF INFANT MORTALITY, IMPROVEMENT IN CANCER SURVIVAL. AND REDUCTION IN DEATHS FROM CORONARY HEART DISEASE, ARE ONLY A FEW EXAMPLES TO THE CONTRARY. IN THE LONG RUN, SUCH RESEARCH SAVES BOTH LIVES AND MONEY. EVEN THE ADVANCING MEDICAL TECHNOLOGY BEING BLAMED FOR HIGHER COSTS OF CARE MAY PRODUCE SAVINGS.

THE NIH BUDGET COULD BE REDUCED IF OPPORTUNITIES FOR FUTURE RESEARCH PAYOFFS SEEM LESS PROMISING. BUT THERE IS NO REASON TO BELIEVE THAT PAYOFFS OF RESEARCH SUPPORTED BY NIH WILL DWINDLE. THE OPPORTUNITY FOR BIOMEDICAL SCIENCES HAS NEVER BEEN GREATER. THE NEUROSCIENCES HAVE NEW

INSIGHTS INTO MUSCULAR DYSTROPHY, THE TREATMENT OF MULTIPLE SCLEROSIS, BRAIN AND SPINAL CORD REGENERATION. AND EVEN THE POSSIBILITY OF TRANSPLANTING BRAIN TISSUE. STUDIES OF ONCOGENES HAVE ENORMOUS POTENTIAL FOR THE DIAGNOSIS OF CANCER, THE ASSESSMENT OF ENVIRONMENTAL TRIGGERS OF MALIGNANCY AND THE ULTIMATE UNDERSTANDING OF THE BIOLOGY OF MALIGNANCY. DIABETES MELLITUS IS YIELDING TO NEW INSIGHTS SOME PROVIDED BY MODERN IMMUNOLOGY THE FIELD OF IMMUNOLOGY ITSELF IS EXPLODING WITH DISCOVERIES, ADVANCES IN MOLECULAR BIOLOGY PROMISE THAT GENE THERAPY WILL BE A REALITY IN THE NEAR FUTURE ALL OF THESE AND MORE CONTRIBUTE TO KNOWLEDGE PRESSINGLY NEEDED TO MEET THE CHALLENGE OF OUR AGING POPULATION.

IF ANY FURTHER EVIDENCE FOR THE VALUE OF PURE BASIC RESEARCH AND ITS FUTURE PROMISES WERE NECESSARY. WE NEED ONLY LOOK AT AIDS. NIH-FUNDED SCIENTISTS IDENTIFIED THE CAUSATIVE VIRUS OF THE ACQUIRED IMMUNE DEFICIENCY SYNDROME IN AN AMAZINGLY SHORT TIME AFTER THE DISEASE WAS FIRST RECOGNIZED. OUR ABILITY TO DEFINE THE CAUSATIVE AGENT AND TO DIAGNOSE EXPOSURE TO IT, FORM THE BASIS FOR ATTEMPTS TO CONTROL AND PREVENT THE DISEASE. THE BASIC INSIGHTS UPON WHICH AIDS RESEARCH IS FOUNDED WERE THE PRODUCTS OF PURE BASIC RESEARCH CONDUCTED AT A TIME WHEN THE DISEASE AIDS WAS TOTALLY UNKNOWN. ANOTHER MORE GENERAL CONSEQUENCE OF NIH RESEARCH IS THAT IT SPAWNED THE SWIFTLY GROWING BIOTECHNOLOGY INDUSTRY AS A BYPRODUCT OF ITS MISSION.

BASIC BIOMEDICAL RESEARCH CAN BE AN EXPENSIVE UNDERTAKING. YET NIH HAS ESTABLISHED A RECORD OF PRUDENT MANAGEMENT OF RESOURCES THAT SHOULD DRAW PARTICULARLY LOUD PLAUDITS IN THESE TIMES OF FISCAL WORRY. A STUDY BY AN INSTITUTE OF MEDICINE COMMITTEE TWO YEARS AGO CONCLUDED THAT "NONE OF THE RESEARCH ORGANIZATIONS WE INVESTIGATED IN THE UNITED STATES OR ABROAD HAS A MORE EFFECTIVE STRUCTURE FOR MOBILIZING SCIENTIFIC RESEARCH AGAINST DISEASE."

WHAT I'VE JUST PRESENTED SHOULD BE CAUSE FOR GREAT CONCERN. HERE IS AN ORGANIZATION CARRYING OUT THE WISHES OF ITS CONSTITUENCY, SCORING SUCCESSES

AND APPEARING LIKELY TO HAVE EVEN GREATER SUCCESS IN THE FUTURE, IMPROVING THE WELL-BEING OF HUMANITY, AND MANAGING ITS ENTERPRISE WELL. A REDUCTION IN THE BUDGET OF NIH CAN ONLY BE SEEN AS A SHORT-TERM DEFICIT-REDUCING ACT WITH ENORMOUS LONG-TERM RISKS. SUCH ACTION IS HARD TO DEFEND.

WHAT CONCLUSION CAN I REACH?

THE BUDGET SHOULD ENABLE NOT ONLY STABILIZATION OF INVESTIGATORINITIATED RESEARCH GRANTS. BUT SHOULD ALSO PERMIT THE DEVELOPMENT OF A BALANCED PORTFOLIO INCLUDING, FOR EXAMPLE, THE PROPER NUMBER OF CATEGORICAL CENTERS NEEDED TO CAPITALIZE ON OTHERWISE UNCOORDINATED RESEARCH OBSERVATIONS. THE BUDGET SHOULD TAKE INTO ACCOUNT THAT THE ENTIRE ENTERPRISE CAN COME TO A HALT IF THERE ARE NO NEW INVESTIGATORS TO PROVIDE INNOVATIVE IDEAS. NIH SHOULD BE ABLE TO DETERMINE WHICH MECHANISMS OF SUPPORT ARE MOST EFFICIENT AND PRODUCTIVE IN TRAINING INVESTIGATORS, BUT THE REQUIRED FLEXIBILITY IS NOT IN THE PROPOSED BUDGET. PLEASE KEEP IN MIND THAT YOUNG INVESTIGATORS FRIGHTENED OFF BY WIDE SWINGS IN SUPPORT CANNOT BE RETURNED TO THE LABORATORIES AS EASILY AS MONEY CAN BE RETURNED TO THE BUDGET. A SENSE OF STABILITY AND COMMITMENT TO BASIC RESEARCH IS IMPORTANT BEYOND A PLEDGE OF A CERTAIN NUMBER OF DOLLARS.

I MENTIONED UNIVERSITIES EARLIER, AND I SHOULD COME BACK TO THEM. BECAUSE NIH FUNDING IS SO CRUCIAL TO THEIR CONDUCT OF BIOMEDICAL RESEARCH. UNIVERSITIES ARE A RESOURCE THAT CANNOT BE DUPLICATED AND MUST NOT BE ALLOWED TO DETERIORATE. THAT IS NOT ONLY MY OPINION BUT ALSO THE CONCLUSION RECENTLY ANNOUNCED BY A WHITE HOUSE SCIENCE COUNCIL PANEL HEADED BY DAVID PACKARD AND ALLAN BROMLEY. THEY EMPHASIZED THE IMPORTANCE OF UNIVERSITYBASED RESEARCH AND OF THE UNIVERSITY-GOVERNMENT PARTNERSHIP. THAT PARTNERSHIP INCLUDES AN UNDERSTANDING THAT INDIRECT COST REIMBURSEMENT FOR ADMINISTRATION OF GRANT PROJECTS SHOULD ONLY BE REDUCED IF THE ADMINISTRATIVE BURDEN IS REDUCED. FORCING COST-SHARING ON ALREADY HARD-PRESSED UNIVERSITIES CAN ONLY BE DAMAGING TO THE STRENGTH OF THEIR PARTNERSHIP WITH