Academic health centers, the core of biomedical research operations, are facing major research funding issues, as revealed in responses to a recent questionnaire from the Association of Academic Health Centers on  budgets and research costs.  Approximately 1/5 of member institutions have responded to date, and the findings raise great concern–not just for the institutions but also for the nation’s R&D, economic growth, and job development.

 The approximate amount of unrecovered costs of research for the past fiscal year ranged from 8 to 40 percent, with almost half of the institutions in the 20-40 percent range.  The same or higher amounts of unrecovered costs are projected for 2010.  Only two institutions are projecting  slight decreases of 1-2 percent.

 Academic health centers are being required to take on increasing amounts of cost sharing on grants received from the federal government. The cost sharing issue was particularly evident in funding of the clinical and translational science awards (CTSAs), an NIH program launched in 2006 to transform the conduct of clinical research through multisite, multi-disciplinary research.  CTSAs, while heralding major transformations in the nature, scope, and outcomes of biomedical research, are nevertheless an expensive undertaking. Current grantees noted cost sharing in the range of 15 to 50 percent annually, with the majority of institutions citing 25-50 percent  in cost sharing.

 Opportunities for new investigators and a strong pipeline of  talent are always significant issues and signs of stability within a system.  Such signs have not been positive for several years as reflected in the percent of first time RO1 grants awarded by the National Institutes of Health; the percentage of new RO1s have been on the decline for some time. Less interest by American students in seeking careers in academic research has also been an ongoing concern and does not speak well of the nation’s commitment to science and math education or, indeed, to higher education.

 Academic health centers are experiencing increasing difficulties to fill the gap in research funding.  Clinical practice revenues have been the traditional source of funds as academic health centers recycle monies from clinical practice into research endeavors.  Several AAHC institutions said that 95-100 percent  of funding comes from clinical revenues, which this year may be in grave danger depending on the outcome of health reform.  Indications are that physician fees will be reduced, which in turn will result in cuts in reimbursement to academic health major reductions in monies available for the research enterprise. 

 For public institutions, monies are not available from the state.  State budget cuts were noted in the range of 2-27 percent (in many instances this was the second, third, or even fourth year of decreases from the state). Decreased funding for endowments, which are particularly critical to funding at private universities,  ranged from 9.9% to 30%, last year with the majority of institutions in the 18-25% range.  For 2010, the projections for decreased funding ranged from 4-30 % for endowments and up to almost 25% for state funding.

These are only some of the critical warning signs of erosion of the research enterprise that call for review and reassessment of the nation’s commitment to and strategies for R&D and biomedical research, in particular, for the future.  With many other nations and companies throughout the world now making investment choices that will have an impact on the next decade of technology development , the U.S. choices and  policy on biomedical research are of profound importance.   The nation needs to recommit to biomedical research and consider a new business model for the research enterprise for the future–one that is viable and sustainable and competitive in a global marketplace.  This is what the Association of Academic Health Centers is now examining.  Stay tuned for updates on this important endeavor.