National Institutes of Health (NIH) Funding: FY1994-FY2020

Contents

• NIH Funding: FY1994-FY2020
• Funding Sources
• FY2020 Budget and Appropriations
• Trends

NIH Funding: FY1994-FY2020

The National Institutes of Health (NIH) is the primary federal agency for medical, health, and behavioral research. It is the largest of the eight health-related agencies that make up the Public Health Service (PHS) within the Department of Health and Human Services (HHS).¹ NIH consists of the Office of the Director (OD) and 27 Institutes and Centers (ICs) that focus on aspects of health, human development, and biomedical science. The OD sets overall policy for NIH and coordinates the programs and activities of all NIH components, particularly in areas of research that involve multiple institutes.

NIH activities cover a wide range of basic, clinical, and translational research, focused on particular diseases, areas of human health and development, or more fundamental aspects of biology and behavior. Its mission also includes research training and health information collection and dissemination.² More than 80% of the NIH budget funds extramural research (i.e., external) through grants, contracts, and other awards.³ This funding supports research performed by more than 300,000 individuals who work at over 2,500 hospitals, medical schools, universities, and other research institutions around the country.⁴ About 10% of the agency's budget supports intramural research (i.e., internal) conducted by nearly 6,000 NIH physicians and scientists, most of whom are located on the NIH campus in Bethesda, MD.⁵

Funding Sources

Funding for NIH comes primarily from annual Labor, HHS, and Education (LHHS) appropriations, with an additional smaller amount for the Superfund Research Program from the Interior/Environment appropriations.⁶ Those two bills provide NIH discretionary budget authority.⁷

In addition, NIH has received mandatory funding of $150 million annually that is provided in Public Health Service Act (PHSA) Section 330B, for a special program on type 1 diabetes research. Funding for the type 1 diabetes program for FY2018 and FY2019 was provided by Section 50902 of P.L. 115-123.⁸ For FY2020, temporary extensions of the funding have been provided in FY2020 continuing resolutions (P.L. 116-59, P.L. 116-69) and most recently in P.L. 116-94, which provided $96.6 million in funding for the program until May 22, 2020. Funding for the type 1 diabetes program will expire on May 22, 2020, though previously appropriated funds will be available until expended.

Some funding is also transferred to NIH pursuant to the PHS Evaluation Set-Aside or the "PHS Evaluation Tap" Transfer authority.⁹ Authorized by Section 241 of the Public Health Service Act, the evaluation tap allows the Secretary of HHS, with the approval of appropriators, to redistribute a portion of eligible PHS agency appropriations across HHS for program evaluation and implementation purposes. The PHSA section limits the set-aside to not less than 0.2% and not more than 1% of eligible program appropriations. However, LHHS appropriations acts have commonly established a higher maximum percentage for the set-aside and have distributed specific amounts of "tap" funding to selected HHS programs. Since FY2010, and including in FY2020, this higher maximum set-aside level has been 2.5% of eligible appropriations.¹⁰ The total funding available for NIH activities, taking account of add-ons and PHS tap transfers, is referred to as the NIH program level.¹¹

FY2020 Budget and Appropriations

President Trump's FY2020 budget request would have provided NIH a total program level of $34.368 billion, a decrease of $4.945 billion (-12.6%) compared with FY2019-enacted levels (see Table A-1 for further details).¹² In addition, the FY2020 budget request proposed consolidating the Agency for Healthcare Research and Quality (AHRQ) into NIH, forming a 28^th IC—the National Institute for Research on Safety and Quality (NIRSQ). The creation of a new NIH institute would require an amendment to PHSA Section 401(d), which specifies that "[i]n the National Institutes of Health, the number of national research institutes and national centers may not exceed a total of 27."

Under the Administration's FY2020 budget proposal, all the existing ICs and budget activity lines, except for Buildings and Facilities, would have received a decrease compared with FY2019-enacted levels.¹³ The Buildings and Facilities appropriation of $200 million would not have changed from FY2019 to FY2020. The proposed NIRSQ would have received $256 million in funding for FY2020. The budget request also aimed to reduce the direct cost of research by proposing a cap on the percentage of an investigator's salary that can be paid with NIH grant funds at 90%.¹⁴

In June 2019, the House passed two consolidated appropriations bills with proposed discretionary funding levels for NIH accounts: H.R. 2740, with proposed LHHS appropriations,¹⁵ and H.R. 3055, with proposed Interior/Environment appropriations.¹⁶ In summary, the House-passed legislation would have provided NIH with an FY2020 estimated program level of $41.314 billion (see Table A-1 for further details) and would have provided an increase for all ICs. The House did not accept the Administration's proposals to consolidate AHRQ into NIH or to cap the percentage of an investigator's salary that could be paid with NIH grant funds.

The Senate did not complete committee or floor consideration of FY2020 LHHS appropriations. The majority of the Senate Appropriations Committee, however, released a draft bill and a draft committee report.¹⁷ Separately, the Senate Appropriations Committee passed an FY2020 Interior/Environment bill with funding for the Superfund Research Program (S. 2580).

On December 20, 2019, Congress and the President mostly finalized the FY2020 NIH program level (except for full-year type 1 diabetes funding) by enacting the Further Consolidated Appropriations Act, 2020 (P.L. 116-94), which included final FY2020 LHHS appropriations in Division A, Interior/Environment appropriations in Division D, and a temporary extension for the special diabetes program for type 1 diabetes through May 22, 2020. The enacted FY2020 NIH program level is made up of the following:

• $40.228 billion in discretionary LHHS budget authority (nontransfer),
• $1.231 billion pursuant to the PHS program evaluation transfer and a $225 million transfer from the HHS nonrecurring expenses fund (NEF),¹⁸
• $81 million for the Superfund research program,
• $150 million in estimated annual funding for the mandatory type 1 diabetes research program. P.L. 116-94 provided temporary program funding for the program until May 22, 2020.

The enacted FY2020 NIH program level represents a $2.6 billion increase (+6.6%) above the FY2019-enacted program level. The FY2020 enacted total for NIH is also $7.5 billion (+22.0%) above the program level proposed by the Administration and $601 million (+1.5%) above the program level proposed by the House-passed bills. In FY2020, all IC accounts receive an increase above FY2019 funding levels (see Table A-1). The Building and Facilities account has an unchanged funding level of $200 million. For the Innovation Account, the full amount authorized by the 21^st Century Cures Act was appropriated (see textbox below).

Congress did not adopt the Administration's proposals to consolidate AHRQ into NIH or to cap the percentage of an investigator's salary that can be paid with NIH grant funds at 90%. Congress did not adopt similar proposals by the Administration in FY2017 through FY2019.¹⁹

Trends

Table 1 outlines NIH program level funding over the previous 25 years, and Figure 1 illustrates funding trends in both current (also called nominal dollars) and projected constant (i.e., inflation-adjusted) FY2020 dollars.

NIH has seen periods of high and low funding growth. Between FY1994 and FY1998, funding for NIH grew from $11.0 billion to $13.7 billion (nominal dollars). Over the next five years, Congress and the President doubled the NIH budget to $27.2 billion in FY2003. In each of FY1999 through FY2003, NIH received annual funding increases of 14% to 16%. From FY2003 to FY2015, NIH funding increased more gradually in nominal dollars.²⁰ In some years, (FY2006, FY2011, and FY2013) funding for the agency decreased in nominal dollars.²¹ From FY2016 through FY2020, the NIH has seen funding increases of over 5% each year. The largest increase was from FY2017 to FY2018, where the program level increased by $3.0 billion (+8.7%), making this the largest single-year nominal dollar increase since FY2003 (excluding one-time funds provided by the American Recovery and Reinvestment Act of 2009 [ARRA, P.L. 111-5]).

The lower half of Figure 1 shows NIH funding adjusted for inflation (in projected constant FY2020 dollars) using the Biomedical Research and Development Price Index (BRDPI).²³ It shows that the purchasing power of NIH funding (non-ARRA) peaked in FY2003 (the last year of the five-year doubling period) and then declined fairly steadily for more than a decade (excluding ARRA) until back-to-back funding increases were provided in each of FY2016 through FY2020. The projected constant FY2020 program level is 5.4% below the peak FY2003 program level.

Figure 1. National Institutes of Health (NIH) Funding, FY1994-FY2020 Program Level Funding in Current and Projected Constant (FY2020) Dollars.

Sources: NIH Budget Office, Appropriations History by Institute/Center (1938 to Present), at http://officeofbudget.od.nih.gov/approp_hist.html. The FY2019 and F2020 program levels are based on U.S. Congress, House and Senate Committees on Appropriations, Subcommittee on the Departments of Labor, Health and Human Services, Education, and Related Agencies, Division A--Department of Labor, Health and Human Services, and Education and Related Agencies [LHHS] Appropriations Act, 2020, committee print, 116th Cong., 2nd sess., December 16, 2019, pp. 187-189, with Superfund research program amounts from Title III of Division E from the Consolidated Appropriations Act, 2019 (P.L. 116-6) and from Title III of Division D from the Further Consolidated Appropriations Act, 2020 (P.L. 116-94). Inflation adjustment reflects the Biomedical Research and Development Price Index (BRDPI), updated January 2019, https://officeofbudget.od.nih.gov/gbiPriceIndexes.html. Notes: By convention, program level totals include amounts "transferred in" pursuant to PHS tap, but do not include any amounts "transferred out" under this same authority. Program level includes all budget authority, including appropriations for the Global Fund to Fight AIDS, TB, and Malaria (FY2002-FY2011) that were subject to transfer-out. As of FY2012, NIH no longer receives appropriations for the National Institute of Allergy and Infectious Diseases (NIAID) identifying resources for the Global Fund; this responsibility was transferred to another federal agency. ARRA supplementary funding is from the American Recovery and Reinvestment Act of 2009, P.L. 111-5. In general, amounts provided to NIH for emergency requirements are excluded from these totals (e.g., FY2015 amount does not include $238 million for the NIAID for research on Ebola that was provided in P.L. 113-235, Title VI of Division G).

Appendix A. NIH Funding Details

Program Funding from FY2020 Explanatory Statement

In recent years, Congress has increasingly used language in reports and explanatory statements accompanying appropriations bills to designate funding for specific research areas, activities, or programs at NIH. For the most part, Congress does not specify funding for designated purposes and allows the ICs to allocate program funding through various agency mechanisms.²⁴ In some cases, Congress uses report language to specify a certain amount of IC funding for a designated purpose, as summarized in Table A-2.

Sometimes the report language specifies that "no less than" a certain amount can be designated for a certain purpose; in other cases, report language "provides" or "recommends" that an amount be spent on a certain purpose. While the House report (H.Rept. 116-62) also included funding levels for some of the below programs, the amounts in the explanatory statement supersede those. Both the explanatory statement and the House report include many additional statements directing the agency to prioritize certain programs or areas of research, as well as expressing the opinion or concerns of Congress regarding NIH; these broad statements are not summarized here.

Appendix B. Acronyms and Abbreviations

Author Contact Information

Footnotes

1.	The Public Health Service also includes the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), the Agency for Healthcare Research and Quality (AHRQ), the Health Resources and Services Administration (HRSA), the Substance Abuse and Mental Health Services Administration (SAMHSA), the Indian Health Service (IHS), and the Agency for Toxic Substances and Disease Registry (ATSDR).
2.	For further information on NIH, see CRS Report R41705, The National Institutes of Health (NIH): Background and Congressional Issues.
3.	Department of Health and Human Services, Fiscal Year 2018 Budget in Brief, Washington, DC, May 2017, p. 38. Updated numbers were not available in the FY2019 or FY2020 HHS Budget in Brief.
4.	Ibid.
5.	Ibid.
6.	The Hazardous Substance Basic Research and Training Program (Superfund Research Program) funds research on the health effects of exposures to hazardous substances and related solutions at the National Institute of Environmental Health Sciences. It is authorized by 311(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9660(a)) and Section 126(g) of the Superfund Amendments and Reauthorization Act of 1986.
7.	NIH received a total of $10.4 billion in supplemental, one-time FY2009 appropriations in the American Recovery and Reinvestment Act (ARRA) of 2009 (P.L. 111-5). ARRA funds were made available for obligation for two years; $4.95 billion was obligated in FY2009, and $5.45 billion in FY2010. CRS Report R43304, Public Health Service Agencies: Overview and Funding (FY2010-FY2016).
8.	42 U.S.C. §254c-3.
9.	For more information on the PHS Evaluation Tap, or PHS Evaluation Set-Aside, see discussion in CRS Report R44916, Public Health Service Agencies: Overview and Funding (FY2016-FY2018).
10.	See §204 of Division A of P.L. 116-94 for the FY2020 maximum set-aside level. The last time that an appropriations act set the PHS tap percentage at a level other than 2.5% was in FY2009, when it was 2.4% (see P.L. 111-8). The FY2020 omnibus also retained a change to this provision, first included in the FY2014 omnibus, allowing tap transfers to be used for the "evaluation and the implementation" of programs funded in the HHS title of the LHHS appropriations act. Prior to FY2014, such provisions had restricted tap funds to the "evaluation of the implementation" of programs authorized under the Public Health Service Act.
11.	Totals include amounts "transferred in" pursuant to PHS tap, but do not include any amounts "transferred out" under this same authority.
12.	NIH, "Justification of Estimates for Appropriations Committees--Overview FY2020, Vol. 1," p. 78.
13.	Though the budget request provides an increase to the National Institute of General Medical Sciences (NIGMS) through discretionary LHHS budget authority, the total amount for NIGMS with the PHS evaluation transfer included is less than FY2019-enacted levels. For proposed FY2020 IC funding levels see Table A-1.
14.	NIH, "Justification of Estimates for Appropriations Committees--Overview FY2020, Vol. 1."
15.	The Labor, Health and Human Services, Education, Defense, State, Foreign Operations, and Energy and Water Development Appropriations Act, 2020.
16.	Commerce, Justice, Science, Agriculture, Rural Development, Food and Drug Administration, Interior, Environment, Military Construction, Veterans Affairs, Transportation, and Housing and Urban Development Appropriations Act, 2020.
17.	CRS Insight IN11114, FY2020 LHHS Appropriations: Status.
18.	The nonrecurring expenses fund (NEF) permits HHS to transfer unobligated balances of expired discretionary funds from FY2008 and subsequent years into the NEF account. Congress authorized use of the funds for capital acquisitions including information technology (IT) and facilities infrastructure (42 U.S.C. §3514a).
19.	For further background, see NIH sections of CRS Report R44516, Federal Research and Development Funding: FY2017; CRS Report R44888, Federal Research and Development Funding: FY2018; and CRS Report R45150, Federal Research and Development (R&D) Funding: FY2019.
20.	Amounts shown in Table 1 include appropriations for the Global Fund to Fight AIDS, TB, and Malaria (FY2002-FY2011) that were subject to transfer-out. As of FY2012, NIH no longer receives appropriations for the National Institute of Allergy and Infectious Diseases (NIAID) identifying resources for the Global Fund; this responsibility was transferred to another federal agency. For further details on the amounts transferred out by fiscal year, see the "Supplemental Appropriation Data Table" for "History of Congressional Appropriations, Fiscal Years 2000-2012" at http://officeofbudget.od.nih.gov/approp_hist.html.
21.	For instance, the FY2006 total was 0.1% lower than the previous year, the first time that the NIH appropriation had decreased since FY1970; the FY2011 total, provided in the Full-Year Continuing Appropriations Act, 2011 (P.L. 112-10), was 1.0% below the previous fiscal year; and the FY2013 total, provided in the Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6), was reduced by the March 2013 sequestration and a transfer of funding under the authority of the HHS Secretary ($1.553 billion and $173 million, respectively), resulting in a budget that was 5.0% lower than the prior year.
22.	The first round of funding was provided by Section 194 of the Further Continuing and Security Assistance Appropriations Act, 2017 (CR, P.L. 114-254). The CR appropriated $352 million in the NIH Innovation account for necessary expenses to carry out the four NIH Innovation Projects as described in Section 1001(b)(4) of the Cures Act. The second round of funding was provided by the FY2018 omnibus (P.L. 115-141). The third round of funding was provided by the FY2019 Consolidated Defense, LHHS, and Continuing Resolution Appropriations Act (P.L. 115-245). The fourth round of funding is detailed in this report.
23.	The index is developed for NIH by the Bureau of Economic Analysis of the Department of Commerce. It reflects the increase in prices of the resources needed to conduct biomedical research, including personnel services, supplies, and equipment. It indicates how much the NIH budget must change to maintain purchasing power. See "NIH Price Indexes," at https://officeofbudget.od.nih.gov/gbiPriceIndexes.html.
24.	CRS Report R41705, The National Institutes of Health (NIH): Background and Congressional Issues