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Public Goods, NIH Funding, and Civic Literacy

Twa, Michael D. OD, PhD, FAAO

Optometry and Vision Science: May 2017 - Volume 94 - Issue 5 - p 543–544
doi: 10.1097/OPX.0000000000001079

Editor in Chief

There have been recent debates about reductions to federal funding for biomedical research. The President’s 2017 proposed budget will cut funding to the National Institutes of Health by 18% with pledges to reorganize the 27 institutes and address perceived mission creep.1 These debates are important; the questions on the table for consideration require hard choices and the potential gains and losses can have profound effects on our nation’s health and well-being, our current and future prosperity, and even the readiness of our national defense. Moreover, the information required to make good decisions is incomplete and the consequences of our choices complex and difficult to fully anticipate. The point of this editorial is to help inform this debate by shedding some light on the products of our national investment in health research as well as the stewardship of those investments, i.e. what do we get for this investment and how do we get it. In the interest of full disclosure, I am funded, in part, by the National Eye Institute to conduct research (R01EY022362).

Let us begin with a refresher on the basic economics of public goods. Public goods are goods or services that are different from traditional goods and services because their consumption does not reduce their availability to others. Examples include national defense, tissue culture, development of a new surgical procedure, public health surveillance, etc. Public goods tend to be intangible and many are actually information or knowledge. Private goods are normally common physical objects: drugs, MRI scanners, etc., or services such as physical examinations or rehabilitation. A second attribute of public goods is that they are not excludable. In other words, once the product is produced, it is difficult to prevent those who do not pay (free riders) from using it or benefiting from its production. By this definition, health research, knowledge, and discovery funded by the National Institutes of Health (NIH) is clearly a public good.

It is often hard to produce public goods because they represent a failure of free market forces and, as a result, are usually under produced. Although the human genome project has spawned derivative businesses to develop targeted therapeutics and genetic tests that identify risk for breast cancer, there was little incentive for individuals or businesses to develop this valuable genetic resource for the greater public good. Unless free riders can be excluded or unless the resource can somehow be monetized, there is little real incentive for businesses to participate in these grand scientific challenges. The common solution to such problems is to make government agencies responsible for production of public goods, or to have others contracted to produce them with government funding provided by taxation. Much of the early HIV/AIDS research conducted by the NIH began in the National Cancer Institute and the National Institute for Allergy and Infectious Disease. In 1988, the Office of Aids Research (OAR) was formed when it became clear that this pandemic disease required a more comprehensive strategy. This office now coordinates interagency research spanning all 27 institutes at the NIH, and its funding is directly responsible for the current therapies available to treat HIV infections and AIDS.2 The scale and complexity of response required for this one disease is an example of how valuable investments in the NIH are as the public good. The requirement to develop fundamentally new scientific knowledge, the scope of the financial investment, and the importance of sharing competitive knowledge is precisely why private industry is ill-equipped to address this and many other current challenges that exist in health research like macular degeneration or Alzheimer’s disease.

Public goods provided through government funding are further isolated from market forces, making them insensitive to the laws of supply and demand. It is, therefore, difficult to know how much investment in health research, knowledge, and discovery is too little or too much. Decisions on governmental investments in public goods become policy decisions driven by opinions and political influence rather than decisions rationally informed by the true demand for these goods.

Do we invest too much in health research? Consider the following: between 1998 and 2003, there was a doubling of the NIH budget from $14 to $27 billion.3 Over the last 14 years, funding has risen little. Sequestration of the federal budget in 2013 and inflationary losses have eroded this investment considerably.4 In 1999, the NIH came up with a simplified way for investigators to make budget requests, provided their budgets were limited to $250,000 annually. At the time, that level of funding could support approximately four people in the laboratory and provide enough supplies to sustain an individual research program. Now, 18 years later, that annual limit has not changed. Adjusted for inflation, the current research project grant would have to be $365,550 to fund an equivalent level of supplies and staff.5 The current reality is that investigators now invest more time to secure less funding to the detriment of science.

Across all NIH institutes, the success rate for research proposal funding ranges between 10 and 20%.6 Of these funded awards, individual research project grants (R01 awards) remain the competitive benchmark for top-shelf research projects. In Fiscal Year 2016, the National Eye Institute received 899 total R01 research proposals and awarded 255 (28%), and that number is consistently greater than funding rates at most other Institutes at the NIH.6 These awards represent a large and important fraction of our public investment in preventing and treating eye disease. From the effort and leadership of these few hundred individuals, we depend on finding future treatments and cures for a multitude of eye diseases. Have you thanked a scientist lately?

No discussion on the value of NIH research funding would be complete without some recognition of the outstanding service and leadership provided by those who serve in this agency. It is easy to dismiss the value of a large faceless governmental bureaucracy. With experience and understanding, one can appreciate that there are resourceful, hard-working people sincerely dedicated to the NIH’s mission: “…to seek fundamental knowledge about the nature and behavior of living systems and the application of that knowledge to enhance health, lengthen life, and reduce illness and disability.” To better appreciate what these government employees do that is so valuable, it is insightful to explore one facet of the NEI: extramural research project funding.

When investigators apply for extramural research project funding, they set in motion a process of peer review and scrutiny that is tightly focused on identifying and promoting the best possible science. This process is recognized worldwide for consistently hitting the mark by funding investigators that advance knowledge and improve health through fundamental discoveries. A full summary and detailed description of how health research is selected for funding is available from the NIH website and should be read by anyone who wishes to understand how the NIH ensures rigor, transparency, ethical conduct, and responsible stewardship of our collective investments in health research.7 Briefly, there are two levels of review that begin with scientific evaluation and end with a reconciliation of scientific merit and the fiscal resources of each individual Institute’s funding goals and priorities.

During scientific review, proposals are evaluated by a panel of approximately 20 of the world’s top scientists, selected for their specific expertise in their topical area and for their ability to judge the quality of the proposed research under review. These reviewers dedicate countless hours to reviewing, interpreting, and debating the merits and weaknesses of each proposal. These panels are assembled by a Scientific Review Officer, individuals who manage the review process from beginning to end. They work to ensure fair consideration by vetting proposals, assembling expert review panels, and managing potential conflicts of interest. During the review meeting, proposals not scored in the top half by the review panel are triaged and further discussion on their merits is limited. Proposals scored in the top half by the expert panel are discussed and dissected to help rank them among competing proposals. Final ranks then help to determine their fate, and in most Institutes, proposals must score among the top 10th percentile to be funded.6 This scientific review stage is a proven and effective way to identify meritorious science.

The second stage of proposal review involves funding decisions that must reconcile scientific merit with the Institute’s funding priorities and, ultimately, the availability of funds. The National Advisory Eye Council is a panel of advisors (eight scientists and four public representatives) that work with the NEI staff to advise the Institute Director on final funding decisions.8 The Advisory Council and NEI staff ensure that proposals recommended for funding align with the Institute’s mission and funding priorities. The NEI staff work in several defined program areas (e.g. retinal diseases, corneal diseases, myopia research, clinical research, etc.) and these program areas are the focus of specific Project Officers. These Project Officers function in some ways like venture capitalists, each seeking a stable of solid investments (i.e. investigators with worthy projects) that can help advance specific scientific goals in their program area. Over the past 20 years, I have met many of the NEI staff and Program Officers. I would say that they are as passionate and committed to advancing health research as the investigators that they support. Have you thanked a Project Officer lately?

Recently, I have been asking people that I meet if they know what the NIH is and what it does. For the most part, they understand the broader mission: to improve health and eliminate disease. Most have a more limited understanding of what it takes to actually accomplish the achievements articulated in the NIH’s mission statement. There is an important interdependent relationship between our public health research institutions, i.e. the NIH and private industry that is vital to our nation’s health, e.g. flu vaccines. This interdependence is nothing new and exists in other sectors of our economy as well, e.g. commercial aviation and the Department of Defense. Hopefully, this discussion can help encourage a more thoughtful and informed debate about our public funding priorities and the value of NIH funding as a public good. At some point the costs are too great and the rewards too ill-defined for profit-driven private enterprise to solve the grand challenges we face. Our federal highway system, crucial for interstate transportation and commerce, would not exist if not for a public investment. Space exploration, the human genome, the Brain Initiative, and the Precision Medicine Initiative have or will yield useful goods and services that will change our world in unpredictable ways. Our investments in these and other public goods should reflect our principles and priorities, our imagination, and long-term goals. These investments will surely define our future.

Michael D. Twa, OD, PhD, FAAO

Editor in Chief

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1. Reardon S, Tollefson J, Witze A, et al. US science agencies face deep cuts in Trump budget. Nature 2017;543:471–2, Available at: Accessed March 28, 2017.
2. OAR History. National Institutes of Health: Office of AIDS Research. Available at: Accessed March 28, 2017.
3. Korn D, Rich RR, Garrison HH, et al. Science policy. The NIH budget in the “postdoubling” era. Science 2002;296:1401–2.
4. NIH Research Funding Trends. Federation of American Societies for Experimental Biology. Available at: Accessed March 28, 2017.
5. CPI Inflation Calculator. United States Department of Labor. Available at: Accessed March 28, 2017.
6. Research Project Success Rates by NIH Institute for 2016. National Institutes of Health: Research Portfolio Online Reporting Tools (RePORT). Available at: Accessed March 28, 2017.
7. Peer Review. National Institutes of Health: Office of Extramural Research. Available at: Accessed March 28, 2017.
8. National Advisory Eye Council (NAEC). National Institutes of Health: National Eye Institute. Available at: Accessed March 28, 2017.
© 2017 American Academy of Optometry