[Joint House and Senate Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 MANAGING BIOMEDICAL RESEARCH TO PREVENT AND CURE DISEASE IN THE 21ST 
               CENTURY: MATCHING NIH POLICY WITH SCIENCE

=======================================================================

                             JOINT HEARING

                               before the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                                and the

          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
                              U.S. SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 2, 2003

                               __________

                           Serial No. 108-56

                               __________

  Printed for the use of the Committee on Energy and Commerce and the 
          Committee on Health, Education, Labor, and Pensions


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house


                               __________

89-964              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512ï¿½091800  
Fax: (202) 512ï¿½092250 Mail: Stop SSOP, Washington, DC 20402ï¿½090001

                    COMMITTEE ON ENERGY AND COMMERCE

               W.J. ``BILLY'' TAUZIN, Louisiana, Chairman

MICHAEL BILIRAKIS, Florida           JOHN D. DINGELL, Michigan
JOE BARTON, Texas                      Ranking Member
FRED UPTON, Michigan                 HENRY A. WAXMAN, California
CLIFF STEARNS, Florida               EDWARD J. MARKEY, Massachusetts
PAUL E. GILLMOR, Ohio                RALPH M. HALL, Texas
JAMES C. GREENWOOD, Pennsylvania     RICK BOUCHER, Virginia
CHRISTOPHER COX, California          EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia                 FRANK PALLONE, Jr., New Jersey
RICHARD BURR, North Carolina         SHERROD BROWN, Ohio
  Vice Chairman                      BART GORDON, Tennessee
ED WHITFIELD, Kentucky               PETER DEUTSCH, Florida
CHARLIE NORWOOD, Georgia             BOBBY L. RUSH, Illinois
BARBARA CUBIN, Wyoming               ANNA G. ESHOO, California
JOHN SHIMKUS, Illinois               BART STUPAK, Michigan
HEATHER WILSON, New Mexico           ELIOT L. ENGEL, New York
JOHN B. SHADEGG, Arizona             ALBERT R. WYNN, Maryland
CHARLES W. ``CHIP'' PICKERING,       GENE GREEN, Texas
Mississippi                          KAREN McCARTHY, Missouri
VITO FOSSELLA, New York              TED STRICKLAND, Ohio
ROY BLUNT, Missouri                  DIANA DeGETTE, Colorado
STEVE BUYER, Indiana                 LOIS CAPPS, California
GEORGE RADANOVICH, California        MICHAEL F. DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire       CHRISTOPHER JOHN, Louisiana
JOSEPH R. PITTS, Pennsylvania        TOM ALLEN, Maine
MARY BONO, California                JIM DAVIS, Florida
GREG WALDEN, Oregon                  JAN SCHAKOWSKY, Illinois
LEE TERRY, Nebraska                  HILDA L. SOLIS, California
ERNIE FLETCHER, Kentucky
MIKE FERGUSON, New Jersey
MIKE ROGERS, Michigan
DARRELL E. ISSA, California
C.L. ``BUTCH'' OTTER, Idaho

                   Dan R. Brouillette, Staff Director

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel



          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                  JUDD GREGG, New Hampshire, Chairman

BILL FRIST, Tennessee                EDWARD M. KENNEDY, Massachusetts
MICHAEL B. ENZI, Wyoming             CHRISTOPHER J. DODD, Connecticut
LAMAR ALEXANDER, Tennessee           TOM HARKIN, Iowa
CHRISTOPHER S. BOND, Missouri        BARBARA A. MIKULSKI, Maryland
MIKE DeWINE, Ohio                    JAMES M. JEFFORDS (I), Vermont
PAT ROBERTS, Kansas                  JEFF BINGAMAN, New Mexico
JEFF SESSIONS, Alabama               PATTY MURRAY, Washington
JOHN ENSIGN, Nevada                  JACK REED, Rhode Island
LINDSEY O. GRAHAM, South Carolina    JOHN EDWARDS, North Carolina
JOHN W. WARNER, Virginia             HILLARY RODHAM CLINTON, New York

                  Sharon R. Soderstrom, Staff Director

      J. Michael Myers, Minority Staff Director and Chief Counsel

                                  (ii)






                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Shapiro, Harold, Chair, Committee on the Organizational 
      Structure of the National Institutes of Health, President 
      Emeritus and Professor of Economics and Public Affairs, 
      Department of Economics and Woodrow Wilson School of Public 
      and International Affairs, Princeton University............    29
    Varmus, Harold, President, Memorial Sloan-Kettering Cancer 
      Center, and former Director, National Institutes of Health.    16
    Zerhouni, Elias A., Director, National Institutes of Health, 
      United States Department of Health and Human Services......     9
Material submitted for the record by:
    American Cancer Society, prepared statement of...............   200
    Martin, Jeffrey C., Chairman of the Board, Parkinson's Action 
      Network, prepared statement of.............................   199
    National Academy of Sciences, prepared statement of..........   203
    Toomey, Hon. Patrick J., a Representative in Congress from 
      the State of Pennsylvania, prepared statement of...........   198
    Varmus, Harold, President, Memorial Sloan-Kettering Cancer 
      Center, and former Director, National Institutes of Health, 
      response for the record....................................   207

                                 (iii)

  

 
 MANAGING BIOMEDICAL RESEARCH TO PREVENT AND CURE DISEASE IN THE 21ST 
               CENTURY: MATCHING NIH POLICY WITH SCIENCE

                              ----------                              


                       THURSDAY, OCTOBER 2, 2003

        Joint Hearing of the U.S. Senate, Committee on 
            Health, Education, Labor, and Pensions, and the 
            U.S. House of Representatives, Committee on 
            Energy and Commerce,
                                                    Washington, DC.
    The committees met jointly, pursuant to notice, at 10:07 
a.m., in room SD-106, Dirksen Senate Office Building, Hon. Judd 
Gregg, Chairman, Senate Committee of Health, Education, Labor, 
and Pensions, presiding.
    Members present Committee on Health, Education, Labor, and 
Pensions: Senators Gregg, Kennedy, Mikulski, Harkin, Murray, 
and Clinton
    Members present Committee on Energy and Commerce: 
Representatives Bilirakis, Greenwood, Shimkus, Pitts, Ferguson, 
Rogers, Dingell, Waxman, Brown, Wynn, Green, DeGette, Capps, 
and Allen.
    Also present: Representative Stephanie Tubbs Jones.
    Mr. Gregg. If we could bring the hearing to order. First, 
it is a pleasure to have a chance to chair this hearing which 
is going to look into the issues of how we are proceeding in 
our health research community, especially of course, the NIH 
community. It is a great pleasure to be joined by our House 
colleagues in this joint hearing. I do not think I have 
participated in a joint hearing on the Health, Education, and 
Labor Committee before. I think it is a nice precedent and very 
constructive to the process, first because it gets us some 
camaraderie and collegiality, but also because it, I suspect, 
saves Dr. Zerhouni from having to testify two times, and be put 
through the process twice.
    We are going to limit opening statements, if there is no 
objection, to the chairmen and ranking members of the two 
committees, and then we will go right to Dr. Zerhouni.
    The purpose of this hearing is to get a background as to 
how NIH is handling the huge increase in funding which has come 
to it as a result of the commitment of this Congress and the 
American people to health research. We recognize that NIH is an 
extraordinary resource for our Nation that is doing exceptional 
work, and we increased the funding of NIH 100 percent in the 
last 5 years in order to give it the resources to accomplish 
its goals. The question is: are those dollars being effectively 
used, and how can we assist NIH in attaining its goal, which is 
to improve the health care in the United States?
    I am not going to go into a more in-depth statement. I am 
looking forward to hearing from Dr. Zerhouni, and I will yield 
to the chairman of the House committee, Mr. Bilirakis.
    Mr. Bilirakis. Thank you very much, Mr. Chairman.
    Good morning to all of you. I first want to commend 
Chairmen Tauzin and Gregg for working together to organize this 
joint hearing. I will keep my remarks brief, but I did want to 
say that Chairman Tauzin is at the White House, called on 
suddenly by the President. I think it is on the energy issue.
    And additionally extend my sympathy to Senator Gregg, who 
recently lost his father. I think it is above and beyond the 
call of duty, the fact that he has taken time to be here today 
for this hearing.
    Mr. Gregg. Thank you.
    Mr. Bilirakis. I am pleased to welcome our distinguished 
guests here today, and I would like to extend a special thank 
you to Dr. Elias Zerhouni, who is the Director of NIH, for his 
leadership and innovation, and of course, thank and welcome Dr. 
Harold Varmus, former Director of NIH, and Dr. Harold Shapiro, 
Chairman of the National Research Council's Committee on the 
Organizational Structure of NIH. I am sure all three of you 
will improve the committee's understanding of the 
organizational structure of NIH and the changes that could help 
NIH to adjust to meet the challenges of the 21st century.
    We recently completed our efforts to double the budget at 
NIH. However, with a dramatically increasing budget it is also 
important to ensure that the American people get the most out 
of this massive investment of resources. It is essential that 
NIH utilize their resources in ways that most effectively 
reflect the needs today.
    On Wednesday, Dr. Zerhouni announced a $2.1 billion 5-year 
plan to lay the groundwork for future medical advancements, 
which he referred to as the roadmap. It is designed to help 
researchers, physicians and drug companies turn scientific 
findings into new therapies, and I know we all look forward to 
hearing more about his roadmap.
    NIH over the years has grown not only in cost but also in 
the number of institutes and centers. In 2001 Congress directed 
NIH to have the National Academy of Sciences study the current 
structure and organization of NIH and determine if it was 
optimally configured. Their report, published in July, contains 
many interesting suggestions, many of which we will hear here 
today, for restructuring the NIH. Dr. Shapiro, of course, is 
here to discuss the findings of the report, and we all look 
forward to hearing his thoughts.
    I thank all three of you gentlemen for your willingness to 
testify, and again extend my thanks to Chairman Tauzin and 
Chairman Gregg, and their staffs, all of our staffs, for all 
their hard work they put into this hearing.
    Thank you, Mr. Chairman.
    Mr. Gregg. Congressman Dingell?
    Mr. Dingell. Mr. Chairman, thank you for scheduling this 
hearing on the National Institutes of Health and the future of 
that great institution. I hope this hearing will be the first 
of many, and I hope they will be friendly.
    The NIH is the crown jewel of biomedical research in this 
country and in the world. It is a magnificent collection of 
resources, of talent, devotion and energy. It is the envy of 
the world. Its contribution to health, science, and research 
has been incalculable. More importantly, it is the source of 
hope for millions of people who suffer and die unnecessarily 
because techniques to prevent, treat, or cure their ailments 
are not currently available. Major changes in the structure and 
operation of NIH should be undertaken with extraordinary care.
    We have a distinguished panel before us today. First I 
welcome Dr. Harold Shapiro. Under his leadership the Institute 
of Medicine recently published a report, Enhancing the Vitality 
of the National Institutes of Health, Organizational Change to 
Meet New Challenges. This is a thoughtful and extensive 
analysis of key challenges facing NIH in the 21st century.
    I also welcome back our old friend, Dr. Harold Varmus, who 
has made a tremendous contribution to the success of NIH.
    I am of course pleased that Dr. Zerhouni is here to share 
with us his plans, or roadmap, for the future of NIH.
    I have grave concerns about part of that roadmap, the 
program now under way for outsourcing many of the jobs 
currently held by NIH employees. I am unaware of any reason 
that this outsourcing needs to take place. I am also unaware of 
any benefits to be achieved. I am aware of the fact that damage 
done to NIH will not be easily repaired, and I think we should 
embark on a course of this kind with extraordinary care and 
with extraordinary diffidence, not just to NIH, but to what 
this can do to the future of medicine and medical research and 
science in this country.
    The outsourcing program has caused great concern among NIH 
employees and many of its key stakeholders such as academic 
health centers that actually conduct much of the research 
supported by NIH dollars, as well as the patients whose hopes 
and fears are directly tied to the success or failure of NIH.
    I would note that much of NIH's work is done outside the 
walls of the institution by different private and public 
institutions with whom NIH has research contracts and different 
arrangements for doing this kind of research.
    Why then is outsourcing necessary? Is it that we are 
serving science, or are we just serving some kind of curious 
right-wing privatization ideology? People like that oft times 
have ideas. They do not know why, and they cannot justify it, 
but they proceed to carry them forward anyhow despite the 
consequences. What jobs will be outsourced and which ones will 
not be outsourced? What is the timeframe for completing this 
process, and what criteria are being applied? Outsourcing is an 
instrument which creates disorganization, fear, concern, and 
difficulty. Successful organizations do not embark upon tasks 
which contain these kinds of risks.
    This is also a very blunt instrument and can cause much 
collateral damage to NIH, to the scientists there, to science 
and to the general overall undertakings of this Nation with 
regard to scientific research. It poses enormous risk to do 
great harm to NIH and to the scientific research now going on 
there. We need to have a candid assessment of the damage that 
it has done, and we need to see what it is going to do to the 
human, scientific, and cultural fabric at NIH.
    Another subject that I hope our witnesses will address 
today is the persistence of major health disparities. There are 
numerous articles and studies that document the fact that such 
disparities exist between sexes, races and between people. 
There are two important books published by the Institution of 
Medicine on this. Why do the disparities continue? What should 
the Congress be doing about them? Perhaps this should be the 
focus of the hearing today.
    In any event, I thank you for having this hearing, Mr. 
Chairman. I look forward to participating actively. I hope we 
will have a number of them, and I hope we will have the 
proponents of this weird idea for outsourcing before us so that 
we might discuss their rather strange views in greater and more 
thoughtful detail. Thank you, Mr. Chairman.
    Mr. Gregg. Thank you, Congressman.
    As I mentioned at the opening of the hearing, it is not our 
tradition, at least on the Senate side--I guess it might be 
different on the House side--to have a lot of opening 
statements because we like to get right to the witnesses. But 
we did want to give all the chairmen and the ranking members 
the opportunity to do opening statements. If other members want 
to do an opening statement, obviously we will do that, but it 
would be nice if we could get on with the statements. But 
certainly, Congressman Brown, as ranking member, if he wants to 
make a statement, it is very appropriate.
    Mr. Brown. Thank you very much, Mr. Chairman. I appreciate 
your good work and also the good work of Chairman Bilirakis and 
Ranking Member Dingell.
    Thank you, Dr. Zerhouni, for being here this morning. I am 
confident of your leadership and impressed with your vision for 
the National Institutes of Health. Thank you.
    I want to take a moment to thank you for speaking of 
support of the Christopher Reeve Paralysis Bill introduced by 
my colleagues Chairman Bilirakis and Senator Harkin earlier 
this year, and welcome Harold Varmus and Harold Shapiro. I look 
forward to hearing their testimony also.
    Congress allocated significant budget increases over the 
last 5 years, as we know, to support basic research and 
biomedical sciences at NIH. The research accomplishments 
achieved throughout the country in large part through NIH 
investments have been nothing short of remarkable. It will be 
unrealistic, we know, to expect future funding increases 
comparable to the investments we have made over the last half 
decade, but as we contemplate approving the smallest budget 
increase NIH has received in decades we must not ignore the 
potential we unleashed when we doubled the NIH budget.
    I keep coming back to whether the priorities of this 
administration and this Congress are in any ways related to the 
priorities of the Nation. We passed $3 trillion worth of tax 
cuts overwhelmingly benefiting the wealthiest Americans in this 
country, and then we allocate the lowest budget increase to NIH 
in a decade? Did we not just map the Human Genome Project? Have 
we not seen one remarkable accomplishment after another 
remarkable accomplishment from NIH? The fiscal year 2004 
Appropriation Bill falls short of what is needed to merely keep 
up with inflation and research costs, and of the increase in 
the number of research project grants for fiscal year 2004, 344 
total new research grants, 323 are designated for biodefense 
research, only 21 are designated for nonbiodefense research. 
Research aimed at saving lives and promoting health should not 
take second place to biodefense. Both types of research are and 
should be national priorities. Dr. Zerhouni, I am concerned the 
administration is making you choose between and among research 
priorities that should never compete for Federal funding.
    Earlier this summer the National Institute of Allergy and 
Infectious Disease was dealt a major blow when the 
administration siphoned millions of dollars from the Institute 
to pay for the development of an anthrax vaccine. Despite the 
administration's explicit commitment to battle AIDS, to battle 
TB and to battle malaria worldwide, the dollars drained from 
NIAID reduced research on these three infectious diseases that 
together every year kill 6 million human beings. Reemerging 
diseases like TB and malaria, and newer threats like anthrax 
and smallpox and SARS, all weaken our national security. 
Funding for research in these areas should better reflect that.
    Scientists are just beginning to tap into the tremendous 
potential inherent in human genomics. Cancer treatment is 
rapidly evolving. Research on spinal cord injury is helping 
people with paralysis breathe on their own for the first time. 
We cannot afford to drop the ball now. Too many lives are at 
risk.
    I thank the Chairman.
    [Additional statements submitted for the record follow:]

Prepared Statement of Hon. Barbara A. Mikulski, a U.S. Senator from the 
                           State of Maryland

    Chairman Gregg, thank you for holding this joint oversight hearing 
on NIH. I am pleased that Dr. Zerhouni, Dr. Varmus and Dr. Shapiro are 
here today to discuss the best ways to move NIH into the new 
millennium. NIH is saving lives and improving our nation's health.
    I am the Senator from Maryland and for Maryland, and I am proud 
that NIH is in my home state. Employing nearly 18,000 people, my 
constituents are both employees and neighbors of NIH. NIH is a jewel in 
the nation's crown, but it also faces challenges to stay on the cutting 
edge of science, while making the highest and best use of its 
resources.
    Many of the advances in medicine in the 20th century are the 
results of American discovery and innovation. Over the years, the 
American people have invested in NIH, and it is paying off in improved 
prevention, diagnosis and treatments for diseases. I strongly supported 
the bipartisan doubling of the NIH budget over five years and am 
pleased that this goal has been met. But, with resources comes 
accountability. We must stay the course to make sure that investments 
are made wisely. NIH must continue to make a return on the public's 
investment, whether it is by recruiting the best and the brightest 
employees or providing patients with access to the fruits of NIH 
discoveries.
    Dr. Zerhouni has asked the right questions. NIH must push the 
frontiers of science and be prepared to respond to new threats of 
bioterrorism and infectious diseases, as well as issues such as chronic 
diseases that impact the health of our nation's aging population. 
Congress and NIH must take swift steps to make sure they will have 
access to new discoveries, and cures and live healthier lives.
    I am optimistic that NIH will continue to bring discoveries to 
patients, from basic science to the bedside, and meet the challenges of 
the new century. I look forward to the testimony of our witnesses, as 
well as an open discussion about the findings of the recently released 
Institute of Medicine (IoM) report on the structure of NIH and the 
proposed NIH Road Map.

                                 ______
                                 
  Prepared Statement of Hon. Michael B. Enzi, a U.S. Senator from the 
                            State of Wyoming

    Congress has just reached an important bipartisan goal: doubling 
the federal health research budget of the National Institutes of Health 
(NIH). Achieving that goal, however, comes with the responsibility to 
make sure that we are spending the taxpayers' money wisely, so I 
welcome this opportunity to join with our colleagues from the House of 
Representatives to hold this hearing.
    If we spend the new money well, our doubling of the NIH budget over 
the past five years will accelerate our race to help us better 
understand the mechanisms of diseases and find the tools with which to 
prevent and cure them. I know many researchers and advocates would like 
to see us double the NIH budget every five years, but this is an 
unrealistic expectation.
    Nevertheless, I am confident that the NIH will still receive 
healthy financial support for the foreseeable future. When you realize 
that the base funding level at the outset of this fiscal year is twice 
what it was five years ago, you don't have to be an accountant to 
understand that a small increase from that base in percentage terms 
actually turns out to be a significant amount of money.
    The focus of today's hearing, however, is not how much money we 
should spend through the NIH. It's whether our money is being spent 
wisely on our national health research priorities.
    Scientists, researchers, and other health and medical experts 
should be the ones who decide which specific projects are the most 
promising and deserve funding. Congress should not decide which grant 
applications to fund.
    However, Congress needs to ensure that NIH spending reflects 
national priorities, and that spending on any particular disease bears 
some relationship to the burden that disease places upon society.-- If 
Congress needs to be clearer in our direction to the NIH, then we need 
to hear that from the NIH.
    The Institute of Medicine (IOM) of the National Academies just 
released a report called ``Enhancing the Vitality of the National 
Institutes of Health: Organizational Change to Meet New Challenges.'' 
Congress called for this report to assess whether the current structure 
and organization of the NIH are appropriate to respond to the 
scientific needs of today and the future.I'm pleased that Dr. Harold 
Shapiro, who chaired the IOM's Committee on the Organizational 
Structure of the NIH, is here to discuss the report. I'm also pleased 
that Dr. Elias Zerhouni, our NIH director, is here to respond to the 
report and to talk about the ``NIH Roadmap for Medical Research,'' the 
agency's plan for addressing the major opportunities and gaps in 
biomedical research that no single institute at NIH can tackle alone.
    I'm also glad that Dr. Varmus, our former NIH director, is here to 
share his thoughts on what's working at the NIH and what could work 
better. He has written and spoken on the issue of NIH organization, and 
he has suggested that a significant re-organization of the NIH is in 
order. I am intrigued by Dr. Varmus's argument that the NIH would be 
more manageable and more effective scientifically if the NIH had far 
fewer institutes covering broader areas of science.
    The number of organizational units within the NIH has grown over 
the years, in response to the pleas of disease advocacy groups and 
scientific associations and the direction of Congress. Dr. Varmus has 
argued that fewer and bigger institutes would be more effective because 
they would have more adequate resources to support complete programs in 
promising areas of research, and more flexibility to respond to 
emergent public health needs.
    Interestingly, the ``NIH Roadmap'' implicitly acknowledges that the 
proliferation of units within the NIH umbrella can be a roadblock to 
research progress. I hope Dr. Varmus will elaborate on his thoughts in 
light of the recent release of the ``NIH Roadmap.''
    I also hope all three of our panelists will give some thought to 
the future of health research from a ``human resources'' perspective. 
In other words, are we providing enough opportunities for young 
scientists to build their careers ``particularly those young scientists 
who conduct their research at institutions that have not traditionally 
been among the leaders in the receipt of NIH support?
    Today, more than ever, fewer of America's best and brightest are 
electing to pursue careers as scientists. There are many reasons for 
this, but I believe one of these reasons is that young scientists lack 
independent funding opportunities during their postdoctoral years that 
would enable them to build early foundations for their careers.
    Young scientists are the key to our making the most of the dramatic 
increase in NIH funding. Our top students need to see attractive career 
paths in science, or they will apply their brilliance in other careers, 
to the detriment of the American biomedical research enterprise. I 
would welcome the thoughts of our witnesses on what we need to do to 
make careers in the biosciences more attractive to young scientists, 
and what role the NIH could or should play.
    I thank our witnesses for their time, and I thank Chairman Gregg 
and Chairman Tauzin for working together to organize this important 
hearing.

                                 ______
                                 
 Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee 
                         on Energy and Commerce

    Thank you, Chairman Gregg. I will be very brief, and I urge my 
House colleagues to be brief or to waive their opening statements so 
that we can get to the important testimony of our witnesses today.
    I welcome the opportunity to join my Senate colleagues today to 
hear testimony about how to strengthen the National Institutes of 
Health. I am pleased that we have testifying before us the current NIH 
Director, Dr. Elias Zerhouni, as well as former NIH Director, Dr. 
Harold Varmus. Together, these two men represent a decade of leadership 
at the NIH. Notably, the last time Congress made sweeping legislative 
changes to the NIH occurred ten years ago. It is high time that both 
House and Senate authorizing Committees take a serious look at NIH to 
help solidify the fundamental role medical research plays in improving 
public health for years to come.
    Without a doubt, the National Institutes of Health is the world 
leader in biomedical research. We have invested significant taxpayer 
resources to speed the discovery of new methods to treat disease and 
improve public health. We recognize that taxpayer dollars invested in 
medical research will yield untold benefits to all Americans. At the 
same time, we must ensure that the investments we have put in place at 
the National Institutes of Health are fully maximized.
    With 27 institutes and centers that independently establish 
priorities and set research agendas in addition to the Office of the 
Director, it's not hard to figure out why patient advocacy groups--and 
even Congress--have a tough time tracking medical research conducted at 
NIH. That's why we need to explore a variety of legislative proposals 
to revitalize the NIH, including organizational structure changes. In 
doing so, we may want to consider establishing a system of greater 
transparency of NIH research activities to guarantee that NIH is held 
accountable for taxpayer investments.
    This will be the third hearing the House Committee on Energy and 
Commerce has held this session to evaluate programs at the NIH. I am 
hopeful that the information learned from this forum will help us in 
our efforts to reauthorize this incredible Agency.

                                 ______
                                 
Prepared Statement of Hon. Cliff Stearns, a Representative in Congress 
                       from the State of Florida

    Mr. Chairman, thank you for holding this hearing today on the 
organizational structure of the National Institutes of Health. I am 
intrigued to explore Dr. Zerhouni's ``NIH Roadmap for Medical 
Research,'' and appreciate Dr. Varmus and Mr. Shapiro's contributions.
    In May we observed the sequencing of the human genome and the 50th 
anniversary of the description of the double helix, which makes up the 
DNA. As past chairman of the Task Force on Health Care and Genetic 
Privacy, I commended the folks at NIH for their outpouring of work. 
Now, we are taking the opportunity to look at the outpouring of work, 
and ask, what might we do even better? How do we prioritize? Should we 
consolidate? Be more open to other Departments and Agencies? Americans 
invest significant tax dollars to fund NIH research, and patients. As 
the authorizing Committees, it is our responsibility to ensure that NIH 
is held accountable on behalf of the taxpayers and patients. It is our 
responsibility to remove barriers that unnecessarily delay the 
incredible progress we are making in improving human health. And it is 
our responsibility to ensure good prioritizing and value dictate where 
resources go. During the FY2004 Labor-HHS Appropriations (HR 2660) this 
Summer Rep. Toomey (PA) had an amendment which would have prevented the 
NIH from further funding four specific grants that they are currently 
funding. The amendment did not cut any funding to NIH, it simply 
prevented the agency from funding these four projects. The amendment 
failed; I did vote for it. In the debate, some Members of both parties 
stated that Congress should not micromanage the NIH, that these were 
peer-reviewed studies. Yes, we should not micromanage, but we should 
ask that the NIH conduct itself wisely as the taxpayers ask. I think 
some discussion of Dr. Zerhouni's vision for strengthening and 
improving might lend even more constructive accountability, across 
institutes and divisions and fields of science. I look forward to the 
testimony.

                                 ______
                                 
    Prepared Statement of Hon. Henry A. Waxman, a Representative in 
                 Congress from the State of California

    Thank you for the opportunity to make a brief opening statement.
    The National Institutes of Health is the most important and 
successful medical research organization in the world. It funds more 
research than any other public agency. It has produced more cures, more 
breakthrough treatments, and more hope for millions of patients around 
the world than any other group of scientists. I look forward to hearing 
from Dr. Zerhouni about his plan to build upon this record of success.
    I am concerned, however, that ideology and politics are interfering 
with NIH's scientific mission and compromising the agency's 
effectiveness.
    Much of this interference is coming from the Bush Administration. 
Nominees to NIH's prestigious scientific advisory committees are being 
screened for their political beliefs, including whom they voted for in 
the last Presidential election. This undermines science and is 
unacceptable. HIV and AIDS researchers have been warned to expect extra 
scrutiny if their grant applications contain particular words that 
might upset social conservatives. This too undermines science and is 
unacceptable.
    According to scientists inside and outside of NIH, the Office of 
Management and Budget's aggressive push for privatization is 
undermining morale and sapping productivity. Meanwhile, there is 
serious concern that Secretary Tommy Thompson's proposal to transform 
the Commissioned Corps of the Public Health Service could push world-
class investigators out of NIH altogether.
    These actions make as much sense as the President's misguided stem 
cell policy, which leading scientists have said undermines our ability 
to find cures for diseases that afflict millions of Americans.
    I hope we can explore some of these issues today. I also would ask 
my colleagues not to compound the problem of political interference at 
NIH by second-guessing the agency's peer review process. Topics such as 
risk-taking, sexual dysfunction, and loss of biodiversity are 
legitimate areas of scientific exploration. It sets a terrible 
precedent for Congress to strip funds from scientifically valid 
projects simply because they do not comport with an ideological agenda.
    I look forward to the testimony of the witnesses.

                                 ______
                                 
  Prepared Statement of Hon. Lois Capps, a Representative in Congress 
                      from the State of California

    Mr. Chairman, like many of the members here today I am a proud 
supporter of the NIH.
    The United States has the best medical research in the world, and 
some of the most advanced health care.
    These achievements are directly the result of the amazing job that 
the National Institutes of Health has done and the resources we have 
provided them.
    This rare joint hearing we are holding today is an excellent use of 
our time. It has been several years since we reauthorized NIH. We 
should correct that.
    And it is clearly our role to oversee the NIH and make sure they 
are operating effectively.
    From time to time it is important for us to review the NIH, 
consider reports on its effectiveness, and hear testimony from experts.
    But I do want to caution my colleagues against becoming to eager to 
find fault in these institutions.
    They have been an amazing success story.
    And while there may be some ways we can improve their operation, we 
should not make changes that might jeopardize the impressive record of 
the NIH.
    For example, the IOM recently suggested that Congress should review 
the special status of the National Cancer Institute.
    This is something to consider.
    But lets remember that cancer care in this country is the best in 
the world.
    And the very same IOM report holds the NCI up as a model for other 
institutes to follow.
    The research done by the NCI since its special status was granted 
has lead to great advancements in cancer care.
    Before we jump to any conclusions about eliminating NCI's special 
status we should remember the doctor's credo ``do no harm.''
    We should not rush to embrace any measures until we are certain 
they won't undermine the very institutions we want to enhance.
    The Energy and Commerce committee has already moved to 
precipitously in another way that threatens to wreck cancer care in 
this country.
    The Medicare prescription drug bill includes a provision that cuts 
cancer care funding by $16 billion over 10 years.
    This was designed to address an overpayment for cancer medications, 
but it fails to take into account an underpayment for physician 
services.
    The massive cuts this creates will lead to the closing of cancer 
centers across the country, especially in rural areas.
    Our approach should not have been one sided. We should have fixed 
both problems. But we didn't.
    We should not make the same mistake with the NIH.
    We should consider all recommendations carefully and implement the 
changes that make sense.
    But we should be sure not to rush through changes that will impair 
the NIH.

    Mr. Gregg. I would like to proceed to Dr. Zerhouni at this 
time unless there are other people who feel they need to make 
an opening statement.
    Dr. Zerhouni?

 STATEMENT OF ELIAS A. ZERHOUNI, DIRECTOR, NATIONAL INSTITUTES 
    OF HEALTH, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Mr. Zerhouni. Thank you very much. Chairman and members, I 
am honored to appear before this joint hearing of two of the 
most distinguished committees of the U.S. Congress. I will make 
a slide presentation. I have submitted my written testimony.
    What I would like to cover for you today is first and 
foremost what Congressman Dingell referred to, and that is that 
NIH spends its dollars primarily outside of NIH. Eighty-five 
percent of the $27.2 billion of the NIH budget in 2003 goes to 
support over 220,000 scientists around the country in 2,800 
institutions. About 11.8 percent of the budget is spent at NIH 
for NIH research and 3.2 percent of the budget is dedicated to 
management.
    What I would like to focus on is to tell you how powerful 
your support has been in advancing health in our country. Your 
bipartisan support over the years has made a huge difference in 
the way disease is now treated and managed. I will give you a 
few examples. When you look at coronary heart disease and you 
look at the 1970's, if you projected what the mortality of this 
disease would be in 2000 if we had not done any research, the 
number would be 1.3 million deaths. The actual number is 
514,000. There has been a 50 to 60 percent reduction in 
mortality in coronary heart disease, saving just in 2000, 
850,000 lives. This progress was due to the many advances that, 
as you mention, NIH supported in many ways.
    Another example of progress due to your support is the 
history of AIDS. As we discovered the cause of AIDS we were 
able to develop behavioral strategies, understand how to have a 
safe blood supply. As you looked at this, you saw in 1993 a 
decrease in the incidence of AIDS, even though we had no cure, 
and then by 1995 a marked decrease in the death rate from AIDS 
because of the development of modern drugs. Clearly, the 
doubling is something that we have used to accelerate our 
research in fighting this disease. We have more than 80 new 
innovative drugs in development, and more importantly, because 
of the doubling of the budget, we have nearly three times the 
number of vaccines in Phase I trials that we had in 2001.
    One more recent example of the benefits of your support is 
illustrated by the SARS outbreak. Let me be very categorical 
about this. The doubling of the budget allowed us to invest in 
human genome research and led to better DNA sequencing 
technology to finish the human genome faster. Most importantly, 
it allowed very powerful new ways to identify microbes and 
viruses through their genomes. It is because of that that we 
were able to identify the cause of SARS in record time and 
protect the country in conjunction with our sister agency, the 
CDC. There is no doubt that the investments you have made have 
paid off in many ways.
    But the challenges are not stopping. Let me describe for 
you what we see at NIH as the rising challenges that public 
health has to face in this country. No. 1, as we have been 
successful in reducing the impact of acute short-term diseases, 
the diseases that we face today are more chronic, more long 
term, and 75 percent of our health expenditures are related to 
chronic diseases. Because we have been successful, life 
expectancy has increased in our country and we are dealing with 
a more aging population. Health disparities remain a challenge 
and we intend to do everything we can to reduce health 
disparities. But in addition to that there are new challenges. 
We are dealing with emerging and reemerging diseases. You have 
heard about SARS, West Nile virus, but there are others that 
are emerging: obesity, diabetes, which we need to tackle, and 
that is not to say that biodefense, the newest mission of the 
NIH, is not a large challenge as well.
    What are we to do and what is NIH doing to address these 
challenges? I would like to show you how we have addressed this 
since I have become Director of the NIH. Clearly, as you see 
the challenges and the increasing cost of health care, it is 
absolutely clear that we have a major challenge in front of us 
that will require us to understand life sciences better and 
accelerate the pace of discoveries and translate these 
discoveries even faster from laboratories to patients and use 
novel approaches that have to be orders of magnitude more 
effective. If you really look at the way we treat and prevent 
disease today, and we continue to do this, we just would not 
have enough resources to pay for that 50 years from now. So the 
discoveries we have to make have to be 10, 30, 40 times more 
effective than what we have today.
    How do you do this? It was clear to us that we needed, with 
the leadership of NIH, to get together and define new 
strategies, and this is what is referred to as the NIH Roadmap 
for medical research. How did we get there? First and foremost 
we asked ourselves what are the areas of science that we need 
to stimulate and how do we stimulate these areas of sciences 
and how do we translate that more effectively than we have?
    Perhaps the key thing is to realize that we are dealing 
with an unprecedented time of opportunity. The discoveries we 
have made, the number of opportunities for treating particular 
biological targets is much greater than we have ever dreamed of 
before. We understand the genome and its structure, but we have 
challenges ahead of us that can be characterized in three core 
priorities. One is new pathways to discovery. We need to 
explore those. Two, we believe that research teams of the 
future will be different than the ones we have today, and 
three, we think the Nation needs a better clinical research 
system.
    Let me be more explicit about that. I am showing you here 
an image from Dr. Subramaniam at NIH here in Bethesda, one of 
the first images of the complex enzyme called pyruvate 
dehydrogenase. This enzyme is made of multiple proteins that 
have been encoded by genes. We have 33,000 genes, but we have 
hundreds of thousands of proteins, and they come together in 
very complex molecular machines. This structure here is able to 
process thousands and thousands of small molecules that you see 
at the top here called pyruvate, remove hydrogen from pyruvate, 
at an efficiency rate that is unmatched in the known engineered 
world. This molecule is only but one of millions of molecules 
that are interacting in our cells. So the challenge for science 
is to understand the complexity of these biological networks of 
molecules, and every day in the scientific literature we 
identify new actors, new parts of the network, new molecules.
    What we do not know is how all of these molecules work 
together. We believe that is the next frontier in life sciences 
and we need to accelerate discovery in that frontier, but that 
will also require new kinds of science teams. We think that the 
scale and complexity of 21st century research requires new 
organizational models. The silos that we have experienced in 
the past need to be broken. We need to create larger multi-
disciplinary teams that are going to be more coordinated, 
whether it be for clinical research or basic research. They 
have to combine physical, biological and information sciences, 
and more importantly, we have to stop being conservative in our 
research, and we need to explore pioneering areas.
    I see research as an adventure where you need pioneers that 
open new land like the Lewis and Clark expedition, and you need 
settlers that go behind the pioneers. That balance, when you 
are facing the challenges that I am describing, needs to be 
thought about all the time, and this is what we want to do 
through the NIH Roadmap.
    Last but not least, we need to translate our discoveries 
into practice, and this will require us to rethink the entire 
system of research, how our patients relate to their community 
doctors and to academic doctors. Research used to be done in 
academic centers. It is now done at the community level. I mean 
the treatments are at the community level because we are 
dealing with chronic long-term diseases, and that needs to be 
taken into account. But we cannot do it unless there are better 
information systems. We have 7 different information 
dictionaries for medical research, 7 different ones that are 
used in computer systems throughout the country. It is like 
running a country with 7 different languages. We need to tackle 
this, and create new partnerships of research between patients, 
community physicians and academic physicians, that will 
accelerate research. So the vision is the country needs a 
reshaped, recast national global research system, where 
patients have come together in certain diseases we have seen 
progress, whether it be in pediatric leukemia or in cystic 
fibrosis. 30,000 patients are organized in 198 sites with 14 
academic centers, and the life expectancy, without a cure, from 
cystic fibrosis has gone from 10 years to 40 years.
    When you look at the roadmap implementation, to come back 
to the organizational challenge that I think you are trying to 
also look at today, you have to ask yourself a question. How do 
you manage and how do you stimulate cross-cutting investments 
across fields of science when NIH is organized in silos and has 
different appropriations? When there is a compelling case, as 
in the roadmap, because we consulted 300 plus leaders around 
the country. Our directors concluded that these three core 
priorities needed a common pool of investment. So all the 
directors came together to fund this initiative with $128 
million in 2004, about 2.1 cumulative by 2009. But it 
illustrates one of the challenges we have. It is a complex 
organization and we have managed this organization on a system 
of excellent peer review. It is the envy of the world. 
Everybody who comes to me from overseas, the first question is: 
how do you organize your peer review? It is very complex, very 
rigorous, and has integrity to it because it involves 
scientific review as well as national advisory councils that 
include public members and receive public advice. Despite all 
the funding, because of the increased scope of missions that we 
have, the success rate is still 30 percent, one of the most 
competitive in the world. We turn down 70 percent of all 
applications.
    There are other challenges for you to consider, and this is 
where I would like to finish my testimony. There are 
revolutionary changes in science. Not only that, but science is 
converging, as we understand the molecules and how to translate 
that into complex networks to affect disease and to prevent 
disease. We know that doing research in cancer can affect 
discoveries in AIDS. That happenes. Doing research on cardiac 
disease can affect treatments in cancer. That has already 
happened with the drug Gleevec. The breadth of mission of NIH 
has increased because the old causes of disease are still 
there. We still have health disparities. But as we are 
successful, we are creating new challenges. The organization is 
complex. The key word here is that we have a greater need for 
scientific and administrative coordination, and to balance the 
three. We need to balance science and its opportunities, the 
public health priorities and society, in what I think is the 
core challenge for NIH, to find better ways and effective ways 
of managing its total portfolio, defining its priorities and 
allocating resources in a way that is much more nimble than 
what we are doing today.
    Is the structural approach of the past where we created a 
structure every time we needed something the right one? I do 
not think so, because from my standpoint as Director, the 
complexity that you reach with that is unmanageable unless you 
have better ways of functionally managing the portfolio.
    That is my message for you, members of the committees, and 
Chairman, and I am looking forward to your questions. Thank you 
very much.
    [The prepared statement of Elias A. Zerhouni follows:]

Prepared Statement of Elias A. Zerhouni, Director, National Institutes 
        of Health, U.S. Department of Health and Human Services

    Chairmen and Members, I am honored to appear before this joint 
hearing of two of the most distinguished Committees of the United 
States Congress. This hearing is especially timely. The five-year 
doubling of the NIH budget is completed. As the 21st century begins, 
the pace of discoveries in the life sciences is accelerating at an 
unprecedented rate. One of the most extraordinary scientific 
achievements of all time, the sequencing of the human genome, was 
accomplished ahead of schedule and under budget. The doubling of the 
NIH budget is fueling many scientific advances, but the extraordinary 
complexity of these new biological discoveries is creating daunting 
scientific and management challenges.
    I have now been the Director of NIH for more than a year. I can 
tell you that the Agency deserves its reputation as the crown jewel of 
government. NIH is home to many brilliant and dedicated employees, who 
are united by the noble mission of finding cures and better treatments 
for disease and disability. NIH, together with our research partners--
patients, scientists, and research institutions--is leading the way in 
medical innovations that prolong life, reduce suffering, and improve 
the quality of life.
    For example, the mortality of acute heart disease and stroke has 
been reduced by more than 50 percent. New cancer therapies have 
prolonged life to the point that over 9 million people are now cancer 
survivors in our country. Many of the important cancer treatment 
breakthroughs, including discovery of the molecular and genetic 
underpinnings of cancer, more effective drug treatments and cures for 
childhood leukemia, resulted from NIH-sponsored research.
    The safety of the blood supply is vastly improved because of tests 
for Hepatitis B and C and HIV, developed through NIH-funded research. A 
pertussis vaccine was developed as the result of NIH research. Amazing 
breakthroughs in the treatment of heart disease arose from NIH 
research, including valve replacement surgery, the discovery of the 
role of high blood cholesterol as a major risk factor for heart 
disease, new drug treatments, and the knowledge about how to reduce 
risk factors. NIH research led to the identification of the virus that 
causes AIDS, the technique for detection of the virus, and most of the 
effective treatments for HIV/AIDS. The ability to quickly create 
candidate vaccines for emerging infectious diseases, such as the West 
Nile Virus, comes from NIH work.
    These discoveries changed the landscape of disease as compared to 
the past, when acute and lethal conditions were the norm. Now we are 
seeing the influx of more chronic and manageable illnesses. People are 
living longer. Witness the aging of our population and the rise of 
chronic diseases.
    NIH will play a major role in the next generation of medical 
breakthroughs. They include mining the sequence of the human genome for 
new strategies of preventing and treating disease. The more we learn 
about human biology, in health and disease at the smallest levels of 
our cellular structure, the faster we will find much needed cures and 
treatments.
    Our past successes also force us to greatly expand our efforts, as 
we now face a larger spectrum of challenges. We still face persistent 
health disparities. We are hard at work developing comprehensive 
scientific-based responses to the new threats of bioterrorism and 
infectious diseases. It should be noted that were it not for the 
advances in genomics and other fields prompted by the doubling of the 
NIH budget, it is doubtful that we would have had the tools to identify 
the cause of SARS and help contain the disease as quickly as we did. As 
SARS demonstrated, in a world growing ever smaller, the dangers of 
existing and emerging infectious diseases loom large.
    The number of research grants awarded by NIH has grown from 27,000 
to 43,500 during the period of the doubling. We managed to increase 
this number while containing administrative and research support costs.
    Also, we believe that the investment in NIH has had a leveraging 
effect in the private sector. For example, R&D spending by PhRMA 
members exceeded the NIH budget for the first time in 1991. The private 
sector now spends more for research than the public sector. And the 
investment by medical schools in research facilities and faculty has 
grown from $3.2 billion from 1990 to 1997, to $5.4 billion from 1998 
through 2002, and is expected to rise to $9.5 billion during the next 
five years.
    Obviously, after a period of rapid growth, the challenges for a 
knowledge-driven organization as complex as the NIH can be daunting. As 
a scientist in charge of the largest publicly-funded medical research 
agency in the world, I have my own questions about the future direction 
of NIH. I believe that no outstanding organization can remain great 
without regularly reviewing its operating principles and plans and 
subjecting itself to critical reexamination.
    I challenged the NIH leadership with the following questions:

--Are we creatively pushing the frontiers of science?
--Are we efficiently transforming that science into medical 
        applications?
--Are we organized to insure a maximum return on the public investment?
--Are we allocating resources to all of the most critical priorities?
--Are we responding to emerging or exceptional opportunities?
    This past year, I worked closely with the Institute and Center 
Directors in an intensive re-examination of NIH management processes. 
We agreed on significant changes that, I believe, will make us more 
responsive: to the changing landscape of science; to the demands of 
public accountability; and most importantly, to the patients who want 
and need to receive the results from research more quickly.
    For example, we transformed the NIH governance structure by 
creating a smaller steering committee of 10 directors with rotating, 3-
year memberships. I chair the new committee's twice-monthly meetings, 
which are convened to expedite consideration of issues of Agency-wide 
importance. This is one of the governance structure changes we are 
implementing in order to greatly streamline corporate decision making 
at NIH. Our intent is to create more open and transparent processes 
that will lead to greater administrative effectiveness and usher in a 
new culture of shared governance and collaborations across all 
Institutes and Centers at NIH.
    Another example of how we will make NIH more responsive is the 
``NIH Roadmap,'' a blueprint we began implementing this month. Planning 
of the Roadmap started soon after I became NIH Director in May 2002. I 
convened a series of meetings to explore whether there were obstacles 
to scientific progress or gaps in our system of research that could not 
be addressed by one Institute alone, but is the responsibility of NIH 
as a whole.
    Developed with input from more than 300 nationally recognized 
leaders in academia, industry, government and the public, the NIH 
Roadmap provides a framework for what we see as the strategies 
necessary to optimize the entire NIH research portfolio and accelerate 
the translation of discoveries into cures and treatments.
    After an intense process of discussion and scientific review, the 
directors of NIH's 27 Institutes and Centers have agreed on an approach 
that we have announced in the past few days. The NIH Roadmap identifies 
the most compelling opportunities in three main areas:

New pathways to scientific discovery;
Research teams of the future;
Re-engineering the national clinical research enterprise.
    These NIH Roadmap initiatives will be funded through a common pool 
of resources comprised of voluntary contributions from Institutes and 
Centers beginning, along with the Director's discretionary fund, with a 
modest budget for these initiatives of about 130 million dollars in 
Fiscal Year 2004. In the future, we expect to continue this effort from 
available funds appropriated to the NIH.
    Our new governance systems and the NIH Roadmap are coincidentally 
responsive to many of the concerns recently raised by the National 
Research Council/Institute of Medicine (NRC/IOM) report: Enhancing the 
Vitality of the National Institutes of Health: Organizational Change to 
Meet New Challenges. The NRC/IOM concluded that NIH continues to do an 
outstanding job of managing and leading the biomedical research 
enterprise in the United States. But this is not the time to rest on 
our laurels. We need to create new strategies to manage the Federal 
investment in biomedical research.
    The historical method of managing the research portfolio at NIH has 
been to set priorities by the creation of new Offices, Centers and 
Institutes. This is what I would call the ``structural'' approach to 
the portfolio management of NIH. It is often done without full 
consideration of how structural changes impact the research portfolio.
    We must now ask ourselves: Under the current state of science, is 
this approach sustainable? We lack a formal trans-NIH portfolio review 
and management process. The need to manage the total NIH portfolio in 
the context of 27 separate structures and several special purpose 
offices, each with their separate budgets, is much more challenging 
than when the agency was smaller.
    Currently, the overall NIH system of research ensures that Federal 
dollars are used to support the best science, follow the greatest 
research opportunities, and respond to public health needs. As a matter 
of internal policy, the NIH intramural program comprising Federal 
laboratories and investigators is small, representing about 10 percent 
of our resources. More than 80 percent of our budget goes to the 
extramural community of researchers, private sector scientists and 
institutions. And most of those funds are given to unsolicited, 
investigator-initiated research ideas.
    Grant applications are vetted by the premiere peer review process 
in the world. Applications are reviewed by NIH staff as well as 
scientific experts from across the research community. The review 
process has multiple steps, including examination by independent 
advisory councils consisting of non-government experts, including the 
lay public. Research involving human subjects is reviewed by 
Institutional Review Boards.
    Yes, NIH has served the cause of public health very well. We 
cannot, however, maintain the status quo. We must adapt. We must be 
innovative.
    Consider the use of investment strategies in the financial 
community. In the financial arena, one wants to see a proper balance 
between ongoing performance, diversity of the company's investment 
portfolio, and the ability to pursue new opportunities that will 
maintain growth. Admittedly, scientific investment strategies are more 
difficult to predict because we do not know how or when progress and 
breakthroughs will come, but this kind of portfolio review and 
management, the kind of discipline used by the best financial 
strategists, has some value at NIH. Our challenge is to maintain a 
well-balanced research portfolio.
    The current structure of NIH, with its separately-funded Institutes 
and Centers, does not facilitate trans-NIH initiatives This 
particularly true when a much needed investment is viewed as unrelated 
to the specific mission of an institute and as such, is not supported 
by the Institute's constituencies. For example, the Human Genome 
Project, was first launched not by the NIH, but at the Department of 
Energy. Initially, this project was resisted by various NIH 
constituencies because it was seen as a high-risk project with little 
direct relevance to the missions of existing Institutes and Centers. 
There were great fears that it would take away from the RO1 grant 
mechanism, the mainstay of NIH research. It required the strong and 
persistent leadership of a few visionary scientists, including Nobel 
laureates James Watson and Harold Varmus and James Wyngaarden, to 
create the Center and, eventually, the Institute, which successfully 
completed this enormously complex project.
    Science is converging as the result of the discovery of unifying 
concepts, methods, and biological mechanisms that link apparently 
disparate diseases. The closer we are to the roots of biology, the more 
our definitions of what diseases are and how they affect us are 
changing. How will we adapt the structure of NIH to this new taxonomy 
of disease? In the past, because of the incomplete state of our 
knowledge, NIH institutes are currently organized around diseases, 
organ systems or stage of life. In the future, this will likely need to 
change and we should implement a regular process of review and propose, 
at appropriate intervals, modifications to the NIH structure.
    The NRC/IOM report, although not proposing drastic changes in the 
structure of NIH, strongly recommends the establishment of a permanent 
NIH-led process by which any addition, elimination or consolidation of 
mission-specific structures is studied. I fully support this 
recommendation.
    As we look into the future, I would urge the Congress not to alter 
the peer review system, which is the cornerstone of NIH's success. 
Peer-reviewed research earned our country over half of all Nobel prizes 
in the sciences, with 5 laureates at the NIH itself, and dozens more 
directly trained or supported by NIH. These discoveries have led to the 
development of a vibrant economy around the life sciences placing our 
country at a huge competitive advantage. We should all work to preserve 
and protect the peer review system from undue influence.
    NIH continues to be successful, in part, because of the diversity 
of approaches to the conduct and support of research taken by the 
decentralized Institutes and Centers. This characteristic should be 
preserved, but better coordinated and constantly reviewed and adjusted 
based on the emerging complexities of science. Often research done in 
one Institute eventually finds its greatest application in the mission 
of another, illustrating both the convergence of science and its 
unpredictability. As an example, the recently discovered cancer drug 
Gleevec was first developed as a potential drug for cardiac disease. 
Another successful cancer drug, Tamoxifin, was originally developed as 
an anti-hormonal drug. It failed, but then proved to be effective in 
the treatment of breast cancers that were responsive to hormones.
    In looking at the independence of the Institutes and Centers, I 
agree with the position elucidated by the NRC/IOM, that we need to also 
address the appropriate authority of the NIH Director. In addressing 
this issue, we need to consider the serious responsibilities given to 
the NIH Director--coordinating, planning, and managing the entire 
portfolio.
    I also support the NRC/IOM recommendation that NIH standardize data 
management. This effort will require new administrative investments in 
information infrastructure--more modern tools for portfolio analysis, 
reporting, and management. I understand that our advocates and Congress 
want appropriated funds to go to research. In large part, I agree with 
this, but good stewardship also requires modern information systems.
    I look forward to working with both Committees and the entire 
Congress in implementing improvements in NIH that will make research 
more efficient, and as a consequence, speed the pace of discovery--
medical advances that will ease suffering and change the way we live.
    I will be pleased to answer any questions that you have. Again, 
thank you for the opportunity to share my vision with you today.

    Mr. Gregg. Thank you very much, doctor. I think that was a 
good overview, which will lead to a lot of questions. In the 
Senate we are not used to so many people showing up for a 
hearing, and I am looking at the time that we allot for 
questions. I recognize that our next two folks, who have very 
substantive commentary on NIH, probably would not get heard 
from until 12 o'clock. So I was wondering if you would mind, 
doctor, if I ask Dr. Varmus and Dr. Shapiro to join you at the 
table here and give their opening statements, and then we could 
do questions of all three of the members of the panel. Do you 
have time?
    Mr. Zerhouni. I enjoy all the help I can get.
    Mr. Gregg. Dr. Varmus, Dr. Shapiro, we certainly appreciate 
your taking the time to come and give us your thoughts, and of 
course Dr. Varmus left a wonderful legacy at NIH, something 
that he can take great pride in and the American people can 
take great pride in, and Dr. Zerhouni has done an extraordinary 
job of building on. I have said this before at hearings that we 
have had where we have had senior officials from our Federal 
health community, whether it is CDC or NIH or other scientific 
communities, we are so extraordinarily lucky as a Nation to 
have people of your ability willing to do public service. So we 
thank all three of you for your commitment to the national 
interest, but we especially thank Dr. Zerhouni for doing it 
today and Dr. Varmus for doing it in the past.
    Why do we not hear from Dr. Varmus?

STATEMENT OF HAROLD VARMUS, PRESIDENT, MEMORIAL SLOAN-KETTERING 
  CANCER CENTER, AND FORMER DIRECTOR, NATIONAL INSTITUTES OF 
                             HEALTH

    Mr. Varmus. Thank you, Senator. Members of the committees, 
thank you very much for holding this important hearing. As you 
probably know, my own career is closely intertwined with the 
life of the NIH. I was trained there. My research was supported 
there. I was charged to lead it for several years, and now I am 
the Director of an NIH supported comprehensive cancer center in 
New York.
    You have heard from Dr. Zerhouni about why NIH is 
universally revered, because of its discoveries, its diverse 
programs, its rigorous peer review in support of a variety of 
disciplines, and indeed NIH has been richly rewarded by 
bipartisan support from the Congress, budgetary increases, its 
ability to attract important leaders to bring young people into 
biomedical sciences, and the increases that have been accorded 
to the NIH have attracted more funding, more investment by 
industries and academic institutions to create a biomedical 
research enterprise in this country that is unparalleled in the 
world.
    At the moment we are poised for even greater discoveries 
than you have heard about in the past as a result of many of 
the things that Dr. Zerhouni outlined for you, and this is 
needed because we have an aging population. We are concerned 
about infectious diseases and bioterrorism. There is concern 
about health disparities and we have rising health costs in 
this country.
    I am going to focus my remarks on a number of things that I 
believe can make a strong NIH even stronger, perhaps not 
perfect but stronger. I am going to group my brief remarks 
under three rubrics, three things that I am concerned about. 
First, a need to counter the deleterious effects of a 
continuous proliferation of institutes and centers of the units 
that make up the NIH. Second, my concern about the need to 
augment the authorities of the NIH Director, especially if we 
are going to achieve the kinds of ambitious programs that Dr. 
Zerhouni has outlined with his NIH Roadmap. Finally, I would 
like to say a few words briefly about the need to insulate, in 
a continuing way, NIH from partisan politics.
    As I was leaving NIH I began to reflect about the effects 
of the continually increasing number of institutes at the NIH 
and my ability or the ability of my successors to effectively 
plan. The existence of many autonomous units at the NIH has had 
many advantages. It creates advocacy for the Institutes. It 
inspires independence and creative thinking, but it also makes 
planning at the NIH difficult. There are many independent 
leaders. It is difficult to go into a room and try to do 
strategic planning of the kind Dr. Zerhouni has managed to 
achieve, and as you have heard, trans-Institute efforts are 
essential in the new scientific environment where we have new 
kinds of research teams where we are bringing different 
disciplines together and trying to attack a deep understanding 
of how biological systems work.
    If we were to make NIH again I believe we would make it 
differently, but I also acknowledge that what exists is very 
difficult to undo and we need to work within the system that we 
have. It has been successful, and one approaches any radical 
change with timidity appropriately.
    I believe it would be useful to consider, as this joint 
committee contemplates the possibility of reform or 
reauthorization of the NIH, to contemplate ways to make the 
continued planning for the NIH a simpler and more effective 
process. For example, rather than try to confuse institutes to 
make a smaller number, to consider ways to make institutes that 
have similar objectives to work more effectively together in 
planning. For example, to use the institutes that address 
problems of the brain, of which there are now several, to work 
together in a cluster to plan new initiatives that would serve 
the interests of all of the people who are invested in the 
future of those institutes. There need to be ways to 
incentivize individuals who run those institutes to work 
together. The clusters can be used to promote administrative 
efficiencies, for example, to put intermural research programs 
together as has been achieved already in the neurosciences, and 
to allow administrative functions like personnel recruitment 
and purchasing to go on in a more efficient manner without a 
need to delegate those functions to a more centralized place.
    I would also urge that the committee consider ways to 
create additional legislative barriers to the creation of new 
institutes and centers. New institutes and centers may on rare 
occasion be justified, but only after a more rigorous process 
of review than currently exists.
    Creating a more effective planning mechanism by clustering 
institutes needs to be augmented by increasing the authority of 
the NIH Director. That means the NIH Director has to have more 
discretionary authority over appropriated budgets to carry out 
the kinds of plans you have heard about under the roadmap. The 
office of the Director is fairly slim with respect to scientist 
administrators, and the Director needs to have the authority to 
bring in more scientists, to work in a programmatic role in 
developing plans for the next steps in the roadmap. I believe 
it would be useful to authorize the formation of an executive 
committee of institute directors. Dr. Zerhouni has formed such 
a committee recently. I believe that could be done by choosing 
the heads of the clusters I proposed, and finally, in order to 
make his role as a planner more effective, I would suggest 
trying to normalize the status of the institutes and their 
directors, including reversing the traditional special 
privileges for institutes like the National Cancer Institute, 
and establishing terms of service that are clearly delineated 
with careful review before reappointment.
    Finally, a few words about insulating NIH from partisan 
politics. I have long believed, and I think this committee 
agrees, that the selection of leaders and advisers for the NIH 
should be based on a knowledge of science and medicine and not 
on other factors that may reflect devotion of potential leaders 
and advisers to political activities and other favoritism. I 
would argue, and I have argued for many years, that the NIH 
Director should be appointed for a 6-year term with one option, 
to uncouple the appointment of the NIH Director from the 
electoral process, and I believe that the selection of all 
Institute Directors should be in accord with those general 
principles.
    Mr. Chairmen and members of the committee, I appreciate the 
attention you are giving to the NIH. I have tried to keep my 
remarks brief so we can have time for discussion of these 
issues. Thank you very much.
    [The prepared statement of Harold Varmus follows:]

    Prepared Statement of Harold Varmus, President, Memorial Sloan-
Kettering Cancer Center, Former Director, National Institutes of Health

    Mr. Chairmen and Members of the Committees: I appear here today as 
a former Director of the National Institutes of Health, a position I 
held from November, 1993, until the end of 1999. For the record, I am 
currently the President and CEO of the Memorial Sloan-Kettering Cancer 
Center in New York City; I received the Nobel Prize in Physiology or 
Medicine with Dr. J. Michael Bishop in 1989 for studies of cancer genes 
conducted over several years at the University of California, San 
Francisco; and I serve as Chairman of the Joint Steering Committee for 
Public Policy, a group representing several scientific societies.
    I would like to begin with a few general observations about the 
NIH. I was trained as a scientist in the NIH intramural program, my 
research as a faculty member was supported by NIH grants, and I was 
given the privilege of leading the agency for over six years. 
Throughout my career and especially during my tenure as Director, I 
have unwaveringly admired the NIH as an effective force for good in the 
world, one created and fostered by our government, and thus a source of 
pride for all Americans. Of course, I am not alone in this opinion. The 
nearly universal reverence in which the NIH is held can be attributed 
to several things: its long history of discovery and progress against 
disease; its diverse programs in research, training, and communication 
of new knowledge; its essential contributions to the vitality of some 
of our greatest institutional resources, including our universities, 
medical schools, and health-oriented industries; the multitude of 
disciplinary approaches with which it pursues better health through 
science; and the rigorous, competitive review processes it uses to 
evaluate and insure the high quality of all of its scientific 
activities.
    For these reasons, our country's leaders have traditionally 
provided non-partisan and enthusiastic support for the budget and the 
programs of the NIH. This support has allowed the agency to retain the 
spirit and excellence of an intellectual community in the setting of 
government; to recruit many of the nation's best physicians and 
scientists to serve as Directors of Institutes and Centers (ICs), 
research administrators, and intramural laboratory personnel; and to 
perform in a fashion that justifies the hopes of the public and 
Congress and incites envy in many other countries around the world.
    This enthusiasm for the NIH has helped to double its budget over 
the past five years and to create an environment in which expectations 
of future progress exceed its remarkable past achievements. The human 
genome and the genomes of many other organisms have been read at 
unanticipated speed; new and powerful tools for analysis of genes, 
cells, and intact organisms have been developed; many brilliant people 
have been trained in biology and related sciences; and academic 
institutions and major health-related industries have invested in new 
programs and buildings to exploit new knowledge and advance health. 
These opportunities are matched by obvious needs--those created by our 
aging population and the prospects of prolonged disability; by new 
concerns about emerging infectious diseases and bio-terrorism; by 
persistent, unacceptable levels of disease both in developing countries 
and among the less affluent citizens of our own; and by the rising 
costs of health care. For these reasons and others, we need a strong 
NIH, now more than ever, if we are to confront these issues and seize 
the recently created opportunities.
    Although the NIH is a strong agency, it is not perfect. Because it 
is strong, we should undertake changes only with caution. But because 
we should also strive for perfection, it is appropriate that we 
consider what should be done to make the NIH even better than it is. To 
that end, I would like to describe three concrete proposals that I 
would recommend for your consideration in any legislative effort to 
reform or reauthorize the agency.

        1) COUNTER THE DELETERIOUS EFFECTS OF IC PROLIFERATION.

    The continued growth of the number of Institutes and Centers at the 
NIH has complicated management of the agency, especially at a time when 
scientific opportunities call for more coordination among IC's to 
develop large, expensive, multi-disciplinary programs.
    During my final year as Director of the NIH, I began to discuss 
publicly my concerns about the detrimental effects of the growing 
numbers of ICs on the planning, management, and funding of NIH's 
scientific programs. I argued then and would argue now that the 
continued proliferation of NIH ICs--presently 27, with a recent birth 
rate of about five per decade--threatens the capacity of the agency to 
seize important opportunities and undermines the ability of the NIH 
Director to lead. While acknowledging that enthusiastic advocacy for 
many individual ICs has budgetary advantages for the NIH and that a 
significant reduction in their number would be politically difficult 
and even perilous, I proposed a path to a more manageable and efficient 
agency by fusing the existing institutes into five large units, led by 
Institute Directors, and a sixth unit, NIH Central, led by the NIH 
Director. (These ideas are explained more fully in an article in 
Science magazine, volume 291, pages 1903-1905, March 9, 2001; see 
http://www.sciencemag.org/cgi/content/full/291/5510/1903).
    By the time the Science article appeared, Congress had directed the 
NIH to fund a National Research Council (NRC) study of the organization 
of the agency. (Dr. Harold Shapiro, who led that study, will review its 
findings and recommendations with you shortly; I would be pleased to 
comment on the study in response to questions.)
    While I accept the NRC panel's conclusion that widespread fusion of 
IC's is impractical and perhaps inappropriate at this time, I continue 
to believe that steps must be taken to overcome the effects of 
Balkanization at the NIH on the planning and support of its scientific 
programs. There are several reasons for this. It is very difficult if 
not impossible to conduct strategic planning routinely with twenty 
seven IC Directors and several Deputy Directors of the NIH. Existing 
ICs vary greatly in the size of budget and staff, so that many cannot 
afford to carry out important programs entailing the clinical, multi-
disciplinary, or technologically sophisticated research required by 
modern biomedical science. All ICs are understandably protective of 
existing resources and programs, making collective efforts difficult to 
initiate and maintain, especially when budgetary increases are small, 
as seems likely to occur in the immediate years ahead.
    What steps, short of IC fusions, can be taken? The current NIH 
Director, Elias Zerhouni, has recently completed a Herculean planning 
process to produce the just-announced NIH Road Map, a highly 
commendable blueprint for coordinated efforts designed to advance 
research broadly--through technology development, interdisciplinary 
training, and clinical research--and to which all ICs have pledged to 
contribute.
    This remarkable process and outcome, however, will be difficult to 
achieve on a regular basis, especially if it requires participation by 
all ICs and if the ICs are not receiving budgetary increases that 
stimulate new initiatives.
    I suggest a few steps to simplify inter-IC program planning and 
more efficient use of resources in the future. (a) Authorize the 
formation of ``clusters'' of ICs to propose and fund large, mutually 
beneficial initiatives. Although the composition of ``clusters'' should 
be subject to further discussion, one possible arrangement would 
conform to the five fusions I proposed earlier. (b) Provide financial 
incentives to ICs that develop and support coordinated efforts. (c) Use 
the ``clusters'' to achieve administrative efficiencies (e.g. in 
personnel management and procurement functions) and consolidate 
intramural research programs, in the fashion illustrated by the 
Neuroscience Initiative now underway on the NIH campus in Bethesda. (d) 
Establish legislative barriers to the creation of new ICs by requiring 
an extensive review process that guarantees a well-documented need for 
any newly authorized unit.

             2) AUGMENT THE AUTHORITY OF THE NIH DIRECTOR.

    As discussed in the preceding section, the NIH is organizationally 
complex and difficult to lead. Regardless of the methods that are used 
to control the number of ICs or to encourage collaboration among the 
ICs, it is time to consider measures that would provide the NIH 
Director with a stronger role in research planning. This would improve 
the management of the agency and make the Director's job more 
attractive to prospective candidates.
    I envision several ways to do this. (a) The NIH Director should be 
given greater discretionary authority over the appropriated budgets of 
the ICs, so that he or she can encourage the kinds of inter-IC or 
trans-IC programs mentioned above. (This could be achieved with a 
larger Discretionary Fund, an enhanced Transfer Authority, or a larger 
direct allocation to the Office of the Director, with the option of 
later transferring those funds to ICs for project management and 
continued support.) (b) The Office of the Director (OD) should be 
enlarged to include a cohort of scientist-administrators who could take 
a more active role in the planning of research programs in concert with 
the ICs. These individuals, who might be short-term government 
employees on leave from academic or industrial positions, would be 
responsible for proposing and initiating innovative research programs 
that would ultimately be transferred to one or more ICs. (c) The NIH 
Director would be authorized to assemble a small group of IC Directors 
to serve as an Executive Committee to plan new initiatives. The members 
of this group would ideally represent the thematic ``clusters'' of ICs 
described earlier and serve limited terms on the committee. (d) To 
optimize the planning process and avoid uncertainties in status, all 
ICs and their Directors would have the same authorities. To achieve 
this, the special privileges conferred upon the National Cancer 
Institute would need to be reversed by Congress, as also recommended by 
Dr. Shapiro's panel. I also support the panel's suggestion that IC 
Directors serve fixed terms, with the option of renewal.

              3) INSULATE THE NIH FROM PARTISAN POLITICS.

    NIH is a creation of government and is appropriately subject to 
oversight by the Executive and Congressional branches. But it works 
best when the selection of its leadership and advisors, the review of 
its operations, and the allocation of its fiscal support are based on 
performance, scientific needs, and public health objectives that can be 
endorsed by both parties.
    Several means can be considered to re-enforce the traditional 
bipartisan approach to the NIH. I have long supported the idea that the 
NIH Director should be appointed for a fixed term of about six years, 
with the option of an additional term, to separate the selection of a 
Director from electoral politics. Second, the selection of the Director 
of the NCI should be conducted in the same manner as the selection of 
other IC Directors, in accord with my earlier recommendation that the 
NCI be treated like the other ICs. Third, Congress should endorse the 
concept that all the leaders of the NIH and the members of Advisory 
Councils and other review panels should be selected on the basis of 
their knowledge of the medical and scientific issues faced by the NIH 
and its components, not as rewards for political views or favors.
    In closing, I would like to thank the members of this Joint 
Committee for undertaking a careful review of the NIH and for 
conducting this hearing. As I have emphasized, the NIH is a remarkable 
agency, and it offers an unusual opportunity for constructive 
oversight. Any beneficial actions will be applauded widely by a public 
eager for the government's support of advances against disease.
    I would be pleased to try to answer any questions you might have.

    [GRAPHIC] [TIFF OMITTED] T9964.001
    
    [GRAPHIC] [TIFF OMITTED] T9964.002
    
    [GRAPHIC] [TIFF OMITTED] T9964.003
    
    [GRAPHIC] [TIFF OMITTED] T9964.004
    
    [GRAPHIC] [TIFF OMITTED] T9964.005
    
    [GRAPHIC] [TIFF OMITTED] T9964.006
    
    [GRAPHIC] [TIFF OMITTED] T9964.007
    
    Mr. Gregg. Thank you, doctor. I think those are very 
helpful thoughts, especially the three major points you are 
making.
    It is a great pleasure to be joined by Dr. Shapiro, who is 
kind enough to chair the IOM committee on NIH organization, 
looking at it from the outside, as a professor emeritus of 
significant reputation from a small struggling school somewhere 
in New Jersey, which those of us from New Hampshire hardly 
admit exists. We look forward to Dr. Shapiro's thoughts.

     STATEMENT OF HAROLD SHAPIRO, CHAIR, COMMITTEE ON THE 
ORGANIZATIONAL STRUCTURE OF THE NATIONAL INSTITUTES OF HEALTH, 
   PRESIDENT EMERITUS AND PROFESSOR OF ECONOMICS AND PUBLIC 
 AFFAIRS, DEPARTMENT OF ECONOMICS AND WOODROW WILSON SCHOOL OF 
     PUBLIC AND INTERNATIONAL AFFAIRS, PRINCETON UNIVERSITY

    Mr. Shapiro. Thank you, Mr. Chairman.
    Mr. Chairman and distinguished members of the committee, I 
am pleased and honored to be here to participate in these 
important hearings. As the Chairman just indicated, I am 
President Emeritus both of the University of Michigan and 
Princeton University and currently serving as Professor of 
Economics and Public Affairs at Princeton. I mention this since 
I feel slightly embarrassed with the word ``doctor'' here in 
view of dealing with NIH where I have real doctors sitting on 
my right. I hope no one will get sick while I am here. If you 
do, I am not the kind of doctor you want to put your trust in.
    I am pleased to be here, and I guess more importantly than 
my previous positions as President of Michigan and Princeton, 
is that, as the Chairman indicated, serve as Chair of the 
committee appointed by the National Research Council, which 
issued the report entitled ``Enhancing the Vitality of the 
National Institutes of Health, Organizational Change to Meet 
New Challenges.'' I have already submitted my full testimony to 
the committee and its staff along with a copy of the 
committee's report. I hope, Mr. Chairman, you will think it 
appropriate to include these latter documents in the 
committee's record, since in the brief time I want to take this 
morning I can only give a brief summary of the committee's key 
observations and recommendations.
    Let me begin by making two preliminary observations. First 
I want to pay tribute to all of those who have made NIH a 
success over the many decades of its existence. This includes 
Members of Congress, the administration, health advocacy 
groups, and of course a virtual army of dedicated biomedical 
scientists. I want to pay special tribute to the many 
contributions Dr. Varmus has made, not only to biomedical 
sciences but to NIH, and similarly to Dr. Zerhouni, whose 
current plans for NIH at least strike me as extraordinarily 
innovative, helpful, and as I will say in a few moments, in 
many ways very consistent with the kinds of ideas that our 
committee has recommended.
    The second preliminary comment I want to make, it is 
important I think that we all understand and reflect, as has 
already I guess been referred to in Dr. Varmus' and Dr. 
Zerhouni's remarks, that NIH is currently structured as a 
loosely organized federation of units, particular institutes 
and centers, that has by design emphasized a very decentralized 
mode of operation. It has been structured in this manner on the 
grounds of the most creative ideas that bubble up from 
individual investigators who are closer to their science and to 
the nature of our evolving health concerns.
    The question before our committee, however, was that 
whether given the changes occurring in the scientific frontier 
and our evolving health concerns as articulated by Dr. Zerhouni 
just a few moments ago, whether or not in these circumstances 
there were compelling reasons to change this loosely federated 
structure and/or other standard modes of operation at NIH.
    It is important to say that NIH, as we all recognize, is an 
extraordinary dynamic organization, but we still have to ask 
the question whether its basic underlying structure has now 
become, at least in part, an impediment to future progress. I 
think that was one of the implications of Dr. Zerhouni's 
remarks as well as what Dr. Varmus has said. It is certainly a 
conclusion of our committee that some change was necessary. 
Some kind of important evolution, development of mixed 
strategies to achieve the objectives that NIH has before us 
would vastly improve its capacity to meet the challenges that 
are ahead of us.
    Perhaps the two most important conclusions we reached were 
that it was our judgment, first it was our judgment, that while 
the core strategies that have served NIH so well for the last 
decades should remain the bedrock of NIH operations, despite 
the fact that that should remain the bedrock, new and 
complementary strategies are needed if we are to enjoy the 
greatest benefits from our growing investments in biomedical 
research and training. Second, that the widespread 
consolidation of existing institutes and centers, while 
certainly a very coherent and attractive idea to think about, 
it was in our judgment not the best strategy to deploy at this 
time. In short, while we believe that some important changes 
are necessary, we believe also that there are better 
alternatives to the widespread consolidation of existing units. 
We identified a number of new but what we believe are essential 
organizational characteristics that should be incorporated into 
NIH's organizational structure as quickly as possible. Our 
report provides detailed recommendations in this respect.
    In summary, NIH now needs, at least in the judgment of our 
committee, a number of enhanced capacities to meet the 
challenges that are before us. First it needs an enhanced 
capacity for NIH as a whole to both demonstrate strategic 
intent and respond quickly and effectively to new challenges 
through the adoption of what we term trans-NIH initiatives.
    Second, it needs an enhanced capacity to take greater and 
more coherent leadership and responsibility in the arena of 
clinical research, as Dr. Zerhouni himself mentioned just a few 
moments ago.
    Third, we need an enhanced capacity to insist on the 
adoption of best practices throughout the organization. There 
has been an extraordinary number of very creative leaders of 
the various institutes over time, who have developed really 
very innovative ways to deal with the challenges before the 
Institute. It is our judgment, however, that these best 
practices often did not survive their leadership and certainly 
did not spread to other institutes. NIH needs an enhanced 
capacity to manage the research portfolio of NIH as a whole, as 
Dr. Zerhouni mentioned just at the conclusion of his remarks, 
and in particular, to make their research portfolio somewhat 
less risk adverse than it is. They need an enhanced capacity to 
provide for accountability to NIH's various constituencies and 
to ensure appropriate levels of turnover and leadership at all 
levels.
    Finally, an enhanced capacity to demonstrate that its 
current organizational structure is not frozen in place, and 
the availability of a thoughtful public process to consider any 
proposals for the addition, subtraction and merger of 
institutes and centers. I take this latter recommendation as 
consistent with what Dr. Varmus noted just a few moments ago, 
to have some type of open public process and thoughtful 
consideration before institutes and/or centers are created, 
closed or merged or any other change of that nature.
    In order to achieve these objectives--and this will be my 
final remark because I want to leave as much time as possible 
for questions--in order to achieve these objectives, it was our 
conclusion, again, quite similar to what Dr. Varmus mentioned a 
few moments ago and I believe what Dr. Zerhouni was referring 
to, that Congress would have to take action to increase 
significantly the authority, responsibility and accountability 
of the Director of NIH in a manner which we have detailed in 
our report. I will be glad to respond to particular questions 
about that. Indeed, important institutional change is necessary 
either to achieve the new objectives our committee has set out 
and Dr. Varmus and Dr. Zerhouni have also articulated, but 
indeed even to sustain the important initiatives that Dr. 
Zerhouni described so carefully just a few moments ago, the 
capacity to sustain those over time, in my view, and I believe 
in our committee's view, is just not attainable without major 
change in the authority, responsibility and accountability of 
the NIH Director.
    So, Chairman, thank you very much. I hope these brief 
remarks were helpful, and I will be glad to answer any 
questions you may have.
    [The prepared statement of Harold Shapiro follows:]

   Prepared Statement of Harold Shapiro, Chairman, Committee on the 
  Organizational Structure of NIH, National Research Council/National 
  Academy of Sciences and Professor of Economics and Public Affairs, 
                          Princeton University

    Good morning, Mr. Chairman and members of the House and Senate 
Committees. My name is Harold Shapiro and I am currently Professor of 
Economics and Public Affairs in the Department of Economics and the 
Woodrow Wilson School of Public and International Affairs of Princeton 
University. I serve as Chair of the National Research Council's 
Committee on the Organizational Structure of NIH, and I would like to 
thank the Congressional Committees for this opportunity to discuss the 
recommendations in our report. The Research Council is the operating 
arm of the National Academy of Sciences, National Academy of 
Engineering, and Institute of Medicine.
    The Committee on the Organizational Structure of NIH was assembled 
by the Academies in response to a Congressional request for a study to 
examine whether, given the many changes in both our health concerns and 
the nature of the scientific frontier the organization and structure of 
NIH are optimally configured to most effectively pursue its mission in 
research and training given the realities of the Twenty-first Century. 
The Congressional request was a wise acknowledgement that the world we 
live in is changing rapidly, with science, evolving health concerns and 
the structure of the institutional mechanisms supporting science and 
advanced research training being among the most fast-paced areas of 
change. All enterprises, be they large or small, need to be able to 
adapt to change and must continually consider new ways to meet the 
challenges of the future if they are to remain effective. The greatest 
risk to successful organizations is the danger of becoming entrenched 
in the very things that have made them successful at the expense of 
needed adaptability.
    The composition of the Committee on the Organizational Structure of 
the National Institutes of Health was designed to ensure that the views 
of the basic science, clinical medicine, and health advocacy 
communities were all adequately represented. In addition, the Committee 
has members who are experienced in the management of large and complex 
organizations, including a former NIH director, two former NIH 
institute directors, two persons with backgrounds in senior management 
of major industrial entities, and a specialist in organizational 
issues. Several Committee members also had considerable experience in 
government operations.
    The Committee held six two-day meetings over the ten months between 
July 2002 and April 2003. At its initial meetings, past and present 
representatives of NIH, Congress, voluntary health groups, scientific 
and professional societies, and industry were invited to provide 
perspectives on the issues before the Committee. The Committee met 
publicly with the current NIH director as well as several former 
directors, and also heard presentations from or interviewed staff in 
the NIH Director's Office and the directors of 18 institutes or 
centers. Prior reports and relevant literature were reviewed. Finally, 
several Committee members conducted town meetings at their home 
institutions and elsewhere, inviting scientists, administrators, and 
students to tell us their views. Thus, the Committee was able to hear, 
consider, and discuss a diverse range of facts and opinions about the 
organizational structure of NIH. The Committee completed and released 
its final report, ``Enhancing the Vitality of the National Institutes 
of Health: Organizational Change to Meet New Challenges'', in late 
July, and I would be happy to submit a copy of the report for the 
record along with my testimony.
    The strong system of federal support for US science and technology 
has produced five decades of discovery and innovation that have 
literally changed the way we live and yielded great social dividends 
for the citizens of our country and beyond. In many ways, NIH is 
unsurpassed among the array of federal agencies that support scientific 
research, providing 80% of the federal government's contribution to 
biomedical research. From a humble beginning in the late 19th century 
as a one room laboratory with a $300 government allocation, NIH has 
grown into a $27 billion per year organization that justifiably enjoys 
enormous public and Congressional support. NIH's success in its mission 
of science in pursuit of fundamental knowledge and the application of 
that knowledge to extending healthy life and reducing the burdens of 
illness and disability has been enormous. NIH's investment in 
biomedical research has helped produce remarkable results in terms of 
declining rates of disease, longer life expectancy, reduced infant 
mortality, and improved quality of life. All those who have played a 
role in making NIH such a success over the years, including many of you 
on the House and Senate Committees that have organized this hearing, 
have earned the gratitude of current and future generations.
    Although not explicitly articulated in the charge to our committee, 
it has been suggested that one key underlying motivation for Congress's 
request for our study is the concern that the large number of 
institutes and centers at NIH, which now total 27, has fragmented the 
agency and made it too unwieldy to address effectively the research and 
training challenges now emerging on the biomedical frontier. While 
extremely mindful of this concern we approached our task in a 
considerably more general fashion by asking ourselves what 
organizational changes, including the widespread consolidation of 
existing units, would be most likely to enhance the vitality of NIH and 
increase its flexibility and responsiveness. Our deliberations were 
also influenced by the fact that there is much more to assessing an 
organization's effectiveness than reflecting on the number of units on 
its organization chart, and we assessed, therefore not only the 
organizational configuration of NIH, but also the key processes, 
internal cultures and authorities that all play key roles in 
determining the quality, creativity and imagination that might 
characterize NIH-wide decision making.
    Although the Committee spent a significant amount of time at every 
one of its six meetings debating the merits of various proposals to 
drastically consolidate NIH's institutes into a far smaller number of 
entities, in the end we came to the consensus view that the widespread 
consolidation of institutes and centers is not the next best 
organizational step for NIH to undertake, as the expected benefits of 
such a strategy would in our judgment be less than the expected costs 
involved. What does the Committee mean by ``costs''? Any thoughtful 
major reorganization would necessitate a lengthy and complex 
information gathering and decision making process that would include 
numerous hearings involving members of Congress and their staff and a 
wide variety of interests in the various health advocacy and scientific 
communities. Our discussions, correspondence and meetings made it quite 
clear that there would be very little agreement among these communities 
on what the right way to reorganize NIH is, and there would probably be 
dozens of conflicting ideas in play and few clear avenues for narrowing 
these down. Moreover we believe that these discussions and negotiations 
would be long and contentious and with a quite uncertain outcome. More 
importantly, the Committee is firmly convinced that many of the goals 
that might be achieved through large-scale consolidation of institutes, 
such as giving NIH a greater capacity to respond to new challenges, 
enabling NIH to respond as a whole to critical strategic initiatives, 
making NIH's research portfolio less risk averse, and launching a major 
reorganization of its clinical research activities could be achieved 
more rapidly and effectively through other changes dealing with 
authorities, culture and processes.
    NIH has developed as a loose federation of units that operate 
largely independently of both each other and the Director. Moreover the 
individual institutes and centers have operated in a very decentralized 
manner reflecting the view that the best ideas flow up from the 
laboratories of individual scientists. This policy has demonstrated its 
power and we believe that this approach should remain the bedrock of 
NIH's program. However, given the changing environment in the 
biomedical sciences and the nature of our evolving health concerns we 
believe that this basic strategy needs to be supplemented by a series 
of new approaches. One reason that NIH has the complex federated 
structure it has today is that in the past, the response to new 
problems or opportunities has often been to create new organizational 
entities, such as the Office of AIDS Research or the National Human 
Genome Research Institute, to deal with them. If, however, there were 
other ways for the NIH leadership to redirect or reconfigure resources, 
this would obviate the need to create new entities as the only 
institutional response. Our Committee came to believe strongly that the 
creation of new organizational entities at NIH is not the best or most 
effective means of ensuring that a problem receives adequate attention 
in the biomedical research portfolio, and that NIH needs a better 
mechanism for responding. Instead, the Committee recommends that NIH 
begin to use a process for identifying major crosscutting, or ``trans-
NIH'' (for research that cuts across the purview of several, if not 
all, the institutes and centers), research initiatives via periodic'' 
perhaps every two years ``strategic planning that engages all of NIH 
and is open to input from the public as well as the scientific 
community. Such research is especially important given the increasingly 
interdisciplinary nature of science today. Although individual 
institutes do mount new initiatives on their own, these are usually 
directed primarily at the interests of their own constituencies and 
rarely closely coordinated with the work of other institutes. An 
example of the kind of area that would make a good focus for such a 
trans-NIH initiative is proteomics, for which the institutes could 
benefit from the development of common tools and approaches if they 
worked closely together. Another is the study of obesity, which is 
rapidly becoming a major national health problem. Because obesity is 
associated with a variety of health problems that cut across the 
concerns of many institutes, such as heart disease, diabetes, and 
arthritis, the responsibility for dealing with it does not fall clearly 
into the portfolio of any one institute. As a result, it is difficult 
for NIH to demonstrate that there is any systematic and coordinated 
approach to addressing the causes and consequences of obesity. The same 
would be true in many other areas. In the absence of such a 
demonstration, a variety of health interest groups are calling for the 
creation of a National Institute on Obesity. But the Committee believes 
that a trans-NIH strategic initiative to address such problems often 
would be a far better solution than the creation of a new institute or 
center.
    For this to become workable, however, Congress must give the NIH 
Director more authority. The Director currently has very little ability 
to insist that ``best practices'' spread quickly across all units, or 
to reconfigure NIH's resources or mobilize funding for new initiatives 
except at a very small scale. We believe that Congress should amend 
NIH's authorizing legislation to formally charge the NIH Director to 
conduct such trans-NIH strategic planning, and that the Director should 
be able to require the institutes and centers to commit a certain 
percentage of their budgets for their participation in the trans-NIH 
research identified through the strategic planning process. The 
individual Institutes, however, would retain the authority to decide 
just which of the trans-NIH initiatives they wish to participate in. We 
suggest that five percent of each institute's and center's budget 
should be invested the first year of the program, but that number could 
grow to 10 percent or higher within four to five years. While this may 
initially sound like a proposal to cut institute budgets by diverting 
funds elsewhere, our thinking is that an open and inclusive strategic 
planning process in which all institutes participate would generate 
enough excellent ideas for trans-NIH initiatives that each institute 
would readily be able to identify one or more of these ideas that would 
be of relevance to their own interests and portfolios. Thus, we believe 
that participation in one or more trans-NIH initiatives would enhance 
the research portfolio of all the institutes. To underline these points 
we are not suggesting that any funds be moved among institutes or to 
the Director's Office for the trans-NIH initiatives. Rather the 
percentage of funding to be invested in any given year, for example, 
five percent, of an institute's budget would be held in ``escrow'' 
until the Director certifies the acceptability of that institute's 
plans for participation in the chosen strategic initiatives.
    I would like to comment also on the committee's recommendations 
that affect the Director's Office. First, the Committee recommends that 
a special projects program be established in the NIH director's office 
to fund risky, cutting-edge research that offers high potential payoffs 
in terms of scientific breakthroughs, and new treatments. We imagine 
this program being patterned after the Defense Advanced Research 
Projects Agency, or DARPA, in the Department of Defense. The NIH 
director's special projects office could help overcome some of the 
hindrances to the pursuit of highly innovative, or ``risky,'' research 
that exist now. High-risk proposals, which may have the potential to 
produce quantum leaps in discovery, do not fare well in the review 
system and are rarely funded by NIH because they are often not backed 
up with extensive preliminary data. This is because the review system 
is driven toward conservatism by a desire to maximize results in the 
face of limited funding, large numbers of competing investigators, and 
considerations of accountability and equity. Another unintended effect 
of this conservatism is a bias against young investigators. The peer 
review system at NIH has served this country very well and should 
continue to do so over the next decades. However, it is our view that 
NIH also needs a complementary strategy that would help overcome the 
inherently conservative bias of the existing peer review framework. The 
committee believes that the new program would succeed best if it were 
located in the NIH director's office and were funded with new money. We 
recommend that Congress provide 100 million dollars for the director's 
special projects program in the first year, with the budget eventually 
growing to as much as one billion dollars a year.
    Second, the Committee does not believe that the Operations budget 
for the Office of the Director (OD) is adequate. Although the overall 
OD budget may look substantial, most of it is earmarked for the various 
program offices that have been created to address particular topics, 
such as the Office of Research on Women's Health and the Office of AIDS 
Research. When a problem that affects NIH as a whole arises, the 
Director frequently has to go ``hat in head'' to beg for contributions 
of funds from the institutes to respond, which, to say the least, is 
highly inefficient and not guaranteed to produce satisfactory results.
    Turning back now to the number of institutes and centers, the 
Committee made one other very important recommendation. Although the 
committee did not believe that a wholesale consolidation is called for 
at this time, we do not believe that NIH's organizational structure 
should remain frozen. As the pace and nature of scientific discovery 
continues to quickly advance, and as our health concerns evolve, some 
institutes and centers will become more relevant than others. 
Therefore, we recommend that a formal public process be established for 
reviewing whether institutes and centers should be added, eliminated, 
or combined with others. This process should involve Congress, the 
scientific community, patient advocacy groups, and the NIH Council of 
Public Representatives and other NIH advisory committees. Although 
Congress would still need to vote on whether or not to change the 
number of institutes, this formal review process could be initiated by 
the NIH director. We would also hope that Congress would not take 
action on proposals to create, combine, or eliminate institutes or 
centers until there has been an opportunity for this process to play 
out and for the NIH Director to thoroughly consider its results and 
make his or her recommendation to Congress.
    The Committee suggests that this public process should be used 
first to review two mergers favored by the committee. First, we believe 
that the National Institute on Drug Abuse should be combined with the 
National Institute on Alcohol Abuse and Alcoholism. These two groups 
share a similar mission and the causes of, as well as the treatment 
for, drug- and alcohol-abuse are likewise similar. Second, we think 
that the National Institute of General Medical Sciences should merge 
with the National Human Genome Research Institute. Now that the genome 
institute has successfully completed its namesake mission, it makes 
sense for it to rejoin the general medical sciences institute, from 
which it originated and which has a lead role in funding basic 
biomedical research. Moreover, the cultures of these two units might 
very well invigorate each other. Again, I would stress that although 
the Committee saw merit in these proposed consolidations, it is our 
recommendation that no action be taken until the public process we 
propose has been conducted.
    On the other hand, because of unusually persuasive arguments and 
exceptional needs, the Committee did recommend that one reorganization 
be acted upon immediately. We strongly believe that several intramural 
and extramural clinical research programs should be combined into a new 
entity that replaces the National Center for Research Resources and 
transforms it into a National Center for Clinical Research and Research 
Resources. The importance of clinical research in translating the 
knowledge produced by basic science into improved health cannot be 
overstated, but this translation is today hampered by high costs, 
regulatory uncertainties, incompatible databases, and a shortage of 
qualified investigators and willing patient participants. We believe 
that putting clinical research under this new umbrella will trigger new 
collaboration and data sharing among researchers from different fields. 
The recommended consolidation of clinical research under one roof 
builds upon the recommendations made by other prestigious groups and 
leaders in recent years that NIH needs to do more to facilitate the 
translation of basic research into cures and treatments.
    As I said earlier, we identified several other organizational and 
administrative changes and mechanisms that could, as the title of our 
report suggests, enhance the vitality of NIH. Let me touch on a few of 
them.
    To begin with, we looked at the length of terms served by the 
director and the heads of the institutes and centers. We decided that 
the NIH director should serve a six-year term unless removed sooner by 
the president. Having a term of six years may--like that for the 
director of the National Science Foundation--allow the director to 
transcend changes in administration. Re-appointment to a second and 
final six-year term should be contingent on a performance review by 
outside experts and the recommendation of the Secretary of Health and 
Human Services.
    Directors of the institutes and centers should be appointed to 
five-year terms with the option for a second, and final, five-year 
term. And authority to hire and fire these directors should be 
transferred from the HHS secretary to the NIH director. We believe that 
the service terms we've recommended will provide stability as well as 
fresh ideas to NIH.
    We also took a second look at the special status of the National 
Cancer Institute. The NCI director is appointed by the president and 
NCI's budget--about 17 percent of the overall NIH budget--bypasses the 
desk of the NIH director and is completely outside the director's 
influence. The Committee suggests that Congress reexamine the 
appropriateness of the special status given to NCI.
    With regard to the effort by HHS to centralize or outsource 
administrative functions, known as the ``One HHS'' initiative, the 
committee felt strongly that, while eliminating government inefficiency 
is always a worthwhile goal, the ``One HHS'' initiative may fail to 
appreciate the strong link between administrative functions at NIH, 
such as personnel recruitment and aspects of grants management, and the 
larger scientific enterprise. Any move to centralize or outsource these 
functions should be carefully reviewed first to determine how it may 
affect NIH's special mission of scientific and medical discovery.
    We also noted that the Research Management and Support budgets, 
which pay for administrative and facilities management costs at the 
institutes and centers, have barely grown in the past decade despite 
the huge increases in the overall NIH budget. As a consequence, NIH is 
left with inadequate funds to cover overhead costs. Congress should 
increase Research Management and Support budgets.
    We also addressed concerns that many of NIH's advisory committees 
are restricted to pro forma roles, populated by too many individuals 
with conflicts of interest, and are sometimes perceived as being 
politicized. We concluded that participation in these committees should 
be solely based on a person's scientific or clinical expertise or on 
his or her substantial involvement in a health or research issue. NIH 
should also reform their advisory council system to ensure that these 
bodies are sufficiently independent, are routinely involved in priority 
setting and planning and are engaged in discussions with institute and 
center leadership to provide it with honest feedback and enhance its 
accountability.
    Finally, our committee understood that it is the quality of 
leadership at all levels, as opposed to organizational structure, that 
is central to NIH's vitality. In the long run, the recruitment of 
outstanding leadership, the commitment to individual scientists as the 
main sources of new discoveries, and reliance on the competitive review 
system for determining grants will remain the essential keys to NIH's 
continuing success.
    Thank you again for the opportunity to discuss the recommendations 
of our report. I would be happy to answer any questions you may have.

    Mr. Gregg. Thank you, Dr. Shapiro. That is an excellent 
statement, and I happen to agree with much of what you said and 
appreciate that background and that support of that view.
    Since the Senate is hosting this, I think the courteous 
thing to do is to allow our House Members to go first in 
questioning, and so I will yield to the chairman of the 
committee, and we will go from the chairman to the ranking 
member on the House side, then we will go from the chairman and 
ranking member on the Senate side. Then we will go back to 
House Republican, House Democrat, and then we will go back to 
Senate Republican, Senate Democrat. It will be 5 minutes in the 
first round here.
    Mr. Bilirakis. Thank you very much, Mr. Chairman. First I 
would ask unanimous consent that all members of the committee 
who have an opening statement, that they be made a part of the 
record.
    Mr. Gregg. Of course.
    Mr. Bilirakis. I have a couple of foundational questions, 
but I think I will just start right off with Dr. Shapiro. 
Current law, as I understand it, and the staff understand it, 
already permits many of the recommendations outlined in an NAS 
report, including the Trans-NIH Initiative recommendation. In 
your opinion, why are the institutes and centers so reluctant 
to work with one another? I think that is pretty darn 
foundational.
    Mr. Shapiro. I cannot really give you a fully satisfactory 
answer as to why the heads of the various institutes and 
centers have not worked in a more cooperative fashion in the 
past, but I think that, as has been mentioned by others here, 
Dr. Zerhouni referred to the silos, these were created by 
Congress as separate institutes, funded separately, and in that 
kind of structure you have very little incentive to work 
together, not a sufficient incentive to work together. So I 
think it is true that under current law a great deal more 
cooperation could take place. I think your assessment is 
correct, and indeed Dr. Zerhouni has demonstrated that, that 
even under the current situation, more can and I am sure will 
be done, but I think it would be helpful, at least in my 
judgment and the judgment of our committee, if some changes 
were made to make it clear that it was Congress's intent and 
desire that NIH as a whole be able to exhibit strategic intent 
and take on the most important strategic challenges in 
cooperation, sort of requiring that all the institutes 
participate in these kinds of trans-NIH initiatives.
    Mr. Bilirakis. When we finish up here and just before you 
are excused, if I can use that term, we would say to you that 
we will be offering you many written questions--Dr. Varmus is 
familiar with this--and ask for your response. I guess I would 
say right at the outset, in 5 minutes questioning and maybe an 
additional 5 minutes, if we have the time and whatnot, we are 
not going to be able to get all of the answers. I guess I would 
strongly suggest to you on behalf of NAS that you would maybe 
suggest to us in writing some ideas of how this could be done. 
I realize that we cannot legislate what is inside the mind of a 
person and the heart of a person as far as cooperation and 
whatnot goes, but at the same time there must be some things 
that we can do, so please, please, feel free to do that.
    Mr. Shapiro. Very glad to do that.
    Mr. Bilirakis. Dr. Zerhouni, I would ask you--Dr. Varmus 
and you both were I guess in the same position regarding some 
of the structural changes that need to be made. Now, of course, 
Dr. Shapiro has also mentioned something to that degree. Do you 
have the authority to make these changes, the changes that you 
would like to make? Do you have the authority to conduct the 
roadmap the way you would like to, these structural changes?
    Mr. Zerhouni. You can conduct a planning exercise. What you 
cannot do is have funding for these exercises because funding 
is separated. The only authority of the Director is a 1 percent 
transfer authority which has been rarely used because it is 
really designated for emergent use, and you cannot plan this 
over many years. So every significant initiative relies 
fundamentally on the acceptance by the Directors for funding 
the common initiative. This is the unique thing about the 
roadmap, that there was enough consensus to create a common 
pool, but tomorrow that consensus could disappear, Number 1.
    Number 2, there is always a tension between an institute 
and the Director of NIH. Why? The Institute receives direct 
appropriations, has its own advisory councils, its own 
constituencies. The directors of the institutes I have found 
very willing to collaborate and work with the NIH Director. The 
problem is that they are accountable to their constituencies, 
so that when they have to make a decision as to whether they 
fund an extra center for a particular disease for which they 
are under pressure, versus contributing to a common pool, you 
can imagine where the tension is. This is a structural tension 
that is part of the system that I think we need to pay 
attention to and control better, because as you know, culture 
does not change unless fund flows change, and that is my 
message.
    Mr. Bilirakis. Yes, sir, Dr. Varmus?
    Mr. Varmus. I would like to endorse the comments that Dr. 
Zerhouni just made. In my experience the NIH institute 
directors are extremely interested in trying to promote 
collaborative activity, but they do feel these pressures. You 
have to remember that even with the considerable expansion in 
the NIH budget, only one in three or one in four, in some cases 
one in five grant applications are funded, and they are under 
tremendous pressure from their constituencies to try to fund 
more grants out of their own institute, rather than donate 
money to a common pool. When I was at the NIH we did do a 
number of coordinated efforts that required contributions from 
all the institutes, to support research on Zebrafish and to 
build a map of the rat genome and do a number of other things 
that were important, but the continued enthusiasm on the part 
of institute directors for these NIH Director organized 
collaborative studies began to diminish with time. We need some 
way to create more incentives, more flexibility.
    Elias did an extraordinary job in building the roadmap 
effort, but that needs to be an ongoing effort that is 
supported by scientific staff within the office of the Director 
and built in with incentives that encourage institute directors 
to contribute, even require them to contribute to some central 
pool.
    Mr. Bilirakis. Well, just do not leave it up to us. We are 
in an ivory tower here and we do know something----
    Mr. Varmus. I thought we were the ivory tower.
    Mr. Bilirakis. Give us some suggestions.
    I would recognize the ranking member of the full Energy and 
Commerce Committee, Mr. Dingell, to inquire.
    Mr. Dingell. Mr. Chairman, I thank you.
    Dr. Zerhouni, welcome, and Dr. Shapiro and Dr. Varmus, 
welcome. It is a privilege to see you both.
    Is this plan to privatize, is this written anywhere? Is it 
written down?
    Mr. Zerhouni. You are referring to the A76 Outsourcing 
Plan, sir?
    Mr. Dingell. The idea of transferring jobs out of NIH.
    Mr. Zerhouni. This plan came, as you know, from OMB. It is 
a directive from the Office of Management and Budget.
    Mr. Dingell. This is an OMB plan?
    Mr. Zerhouni. Right. It is not an NIH plan, sir.
    Mr. Dingell. Good. I am comforted to hear that because I 
was beginning to wonder if we ought not start by privatizing 
your job.
    Mr. Zerhouni. As you know, we have 85 percent, as you 
mentioned, 85 percent of our activity is outside of the Federal 
Agency. But the plan is from OMB. The plan is obviously 
something that the Agency has to respond to. We have tried to 
do as much as we can to respond as effectively as we can. We 
have just won the first competition.
    My instinct about this was that our people are really the 
best people----
    Mr. Dingell. Doctor, I happen to agree with you. Let me try 
and find out. Is this plan in writing?
    Mr. Zerhouni. From OMB?
    Mr. Dingell. From OMB or is it in writing at your agency?
    Mr. Zerhouni. Yes, both. The plan from OMB is written. The 
directors that come to us are explicit, and we have basically 
followed those, and I certainly can share them with you.
    Mr. Dingell. Would you submit those both, please, to us?
    Do we need a governmental core to NIH? Do we not need a 
governmental core in addition to all of the outsourcing which 
is done now, 85 percent?
    Mr. Zerhouni. I think it is very important to have an 
intramural program of Government scientists dedicated to public 
health priorities that no outside institution either has the 
capabilities or the interest to sustain.
    Mr. Dingell. Thank you, doctor.
    Dr. Varmus, what do you think about that?
    Mr. Varmus. An intramural program is extremely important.
    Mr. Dingell. Dr. Shapiro?
    Mr. Shapiro. I also think it is extremely important to have 
an intramural program. I think, as our report indicates, that 
some--as Dr. Zerhouni himself has carried out--some changes are 
necessary to ensure that continuous revitalization of the 
intramural program, but having it I think is extremely 
important.
    Mr. Dingell. Gentlemen, would you each--and I apologize, 
but I am very limited on time and I have to respect my 
colleagues and the chair. Will you please each briefly tell us 
about the negative aspects of this outsourcing program so we 
can see its virtues and its curses, starting with Dr. Varmus.
    Mr. Varmus. I am concerned that the outsourcing proposal is 
being somewhat misapplied in the context of what NIH does. NIH 
has already sought out among the most talented scientists and 
administrators in the country, the effort to outsource. NIH 
does some contract work already, and as Dr. Zerhouni has 
pointed out, most of the funds at the NIH are used in the 
extramural research community, but for the maintenance of the 
administrative functions of the NIH and the research done in 
the intramural program, I believe that for the most part the 
NIH, virtually all categories, has already done a very good job 
in recruiting highly talented people who have been subjected to 
rigorous review through outside bodies, and that this is 
sending a wave of unnecessary anxiety and bureaucratic 
duplication to the Agency.
    Mr. Dingell. Thank you.
    Dr. Shapiro?
    Mr. Shapiro. Yes. Our committee and myself was also very 
concerned with this initiative, and we think it is on the whole 
not well thought out and in some sense ill advised. Sometimes 
centralization serves everybody's interest by increasing 
efficiency. Sometimes it serves no one's interest by 
undermining the capacity and freedom to manage at NIH. My own 
view of the current initiatives coming out of OMB then through 
HHS to NIH is that they are threatening and threaten to 
undermine some of the vitality of the organization, and I think 
they have to be, as you indicated earlier, more carefully 
thought through.
    Mr. Dingell. Nowhere is it to be found in the National 
Research Council Institute of Medicine's study, is that 
correct?
    Mr. Shapiro. Recommendation Number 1 deals with the 
centralization of management functions which is the response to 
that. That is the first recommendation. It is on page 40 in the 
report.
    Mr. Dingell. I ask unanimous consent, Mr. Chairman, that 
that be put in the record, the entire summary of 
recommendations here so we can have a look at it.
    Mr. Gregg. That is fine.
    [The material follows:]

    [GRAPHIC] [TIFF OMITTED] T9964.008
    
    [GRAPHIC] [TIFF OMITTED] T9964.009
    
    [GRAPHIC] [TIFF OMITTED] T9964.010
    
    [GRAPHIC] [TIFF OMITTED] T9964.011
    
    [GRAPHIC] [TIFF OMITTED] T9964.012
    
    [GRAPHIC] [TIFF OMITTED] T9964.013
    
    [GRAPHIC] [TIFF OMITTED] T9964.014
    
    [GRAPHIC] [TIFF OMITTED] T9964.015
    
    [GRAPHIC] [TIFF OMITTED] T9964.016
    
    [GRAPHIC] [TIFF OMITTED] T9964.017
    
    [GRAPHIC] [TIFF OMITTED] T9964.018
    
    [GRAPHIC] [TIFF OMITTED] T9964.019
    
    [GRAPHIC] [TIFF OMITTED] T9964.020
    
    [GRAPHIC] [TIFF OMITTED] T9964.021
    
    [GRAPHIC] [TIFF OMITTED] T9964.022
    
    [GRAPHIC] [TIFF OMITTED] T9964.023
    
    [GRAPHIC] [TIFF OMITTED] T9964.024
    
    [GRAPHIC] [TIFF OMITTED] T9964.025
    
    [GRAPHIC] [TIFF OMITTED] T9964.026
    
    [GRAPHIC] [TIFF OMITTED] T9964.027
    
    [GRAPHIC] [TIFF OMITTED] T9964.028
    
    [GRAPHIC] [TIFF OMITTED] T9964.029
    
    [GRAPHIC] [TIFF OMITTED] T9964.030
    
    [GRAPHIC] [TIFF OMITTED] T9964.031
    
    [GRAPHIC] [TIFF OMITTED] T9964.032
    
    [GRAPHIC] [TIFF OMITTED] T9964.033
    
    [GRAPHIC] [TIFF OMITTED] T9964.034
    
    [GRAPHIC] [TIFF OMITTED] T9964.035
    
    [GRAPHIC] [TIFF OMITTED] T9964.036
    
    [GRAPHIC] [TIFF OMITTED] T9964.037
    
    [GRAPHIC] [TIFF OMITTED] T9964.038
    
    [GRAPHIC] [TIFF OMITTED] T9964.039
    
    [GRAPHIC] [TIFF OMITTED] T9964.040
    
    [GRAPHIC] [TIFF OMITTED] T9964.041
    
    [GRAPHIC] [TIFF OMITTED] T9964.042
    
    [GRAPHIC] [TIFF OMITTED] T9964.043
    
    [GRAPHIC] [TIFF OMITTED] T9964.044
    
    [GRAPHIC] [TIFF OMITTED] T9964.045
    
    [GRAPHIC] [TIFF OMITTED] T9964.046
    
    [GRAPHIC] [TIFF OMITTED] T9964.047
    
    [GRAPHIC] [TIFF OMITTED] T9964.048
    
    [GRAPHIC] [TIFF OMITTED] T9964.049
    
    [GRAPHIC] [TIFF OMITTED] T9964.050
    
    [GRAPHIC] [TIFF OMITTED] T9964.051
    
    [GRAPHIC] [TIFF OMITTED] T9964.052
    
    [GRAPHIC] [TIFF OMITTED] T9964.053
    
    [GRAPHIC] [TIFF OMITTED] T9964.054
    
    [GRAPHIC] [TIFF OMITTED] T9964.055
    
    [GRAPHIC] [TIFF OMITTED] T9964.056
    
    [GRAPHIC] [TIFF OMITTED] T9964.057
    
    [GRAPHIC] [TIFF OMITTED] T9964.058
    
    [GRAPHIC] [TIFF OMITTED] T9964.059
    
    [GRAPHIC] [TIFF OMITTED] T9964.060
    
    [GRAPHIC] [TIFF OMITTED] T9964.061
    
    [GRAPHIC] [TIFF OMITTED] T9964.062
    
    [GRAPHIC] [TIFF OMITTED] T9964.063
    
    [GRAPHIC] [TIFF OMITTED] T9964.064
    
    [GRAPHIC] [TIFF OMITTED] T9964.065
    
    [GRAPHIC] [TIFF OMITTED] T9964.066
    
    [GRAPHIC] [TIFF OMITTED] T9964.067
    
    [GRAPHIC] [TIFF OMITTED] T9964.068
    
    [GRAPHIC] [TIFF OMITTED] T9964.069
    
    [GRAPHIC] [TIFF OMITTED] T9964.070
    
    [GRAPHIC] [TIFF OMITTED] T9964.071
    
    [GRAPHIC] [TIFF OMITTED] T9964.072
    
    [GRAPHIC] [TIFF OMITTED] T9964.073
    
    [GRAPHIC] [TIFF OMITTED] T9964.074
    
    [GRAPHIC] [TIFF OMITTED] T9964.075
    
    [GRAPHIC] [TIFF OMITTED] T9964.076
    
    [GRAPHIC] [TIFF OMITTED] T9964.077
    
    [GRAPHIC] [TIFF OMITTED] T9964.078
    
    [GRAPHIC] [TIFF OMITTED] T9964.079
    
    [GRAPHIC] [TIFF OMITTED] T9964.080
    
    [GRAPHIC] [TIFF OMITTED] T9964.081
    
    [GRAPHIC] [TIFF OMITTED] T9964.082
    
    [GRAPHIC] [TIFF OMITTED] T9964.083
    
    [GRAPHIC] [TIFF OMITTED] T9964.084
    
    [GRAPHIC] [TIFF OMITTED] T9964.085
    
    [GRAPHIC] [TIFF OMITTED] T9964.086
    
    [GRAPHIC] [TIFF OMITTED] T9964.087
    
    [GRAPHIC] [TIFF OMITTED] T9964.088
    
    [GRAPHIC] [TIFF OMITTED] T9964.089
    
    [GRAPHIC] [TIFF OMITTED] T9964.090
    
    [GRAPHIC] [TIFF OMITTED] T9964.091
    
    [GRAPHIC] [TIFF OMITTED] T9964.092
    
    [GRAPHIC] [TIFF OMITTED] T9964.093
    
    [GRAPHIC] [TIFF OMITTED] T9964.094
    
    [GRAPHIC] [TIFF OMITTED] T9964.095
    
    [GRAPHIC] [TIFF OMITTED] T9964.096
    
    [GRAPHIC] [TIFF OMITTED] T9964.097
    
    [GRAPHIC] [TIFF OMITTED] T9964.098
    
    [GRAPHIC] [TIFF OMITTED] T9964.099
    
    [GRAPHIC] [TIFF OMITTED] T9964.100
    
    [GRAPHIC] [TIFF OMITTED] T9964.101
    
    [GRAPHIC] [TIFF OMITTED] T9964.102
    
    [GRAPHIC] [TIFF OMITTED] T9964.103
    
    [GRAPHIC] [TIFF OMITTED] T9964.104
    
    [GRAPHIC] [TIFF OMITTED] T9964.105
    
    [GRAPHIC] [TIFF OMITTED] T9964.106
    
    [GRAPHIC] [TIFF OMITTED] T9964.107
    
    [GRAPHIC] [TIFF OMITTED] T9964.108
    
    [GRAPHIC] [TIFF OMITTED] T9964.109
    
    [GRAPHIC] [TIFF OMITTED] T9964.110
    
    [GRAPHIC] [TIFF OMITTED] T9964.111
    
    [GRAPHIC] [TIFF OMITTED] T9964.113
    
    [GRAPHIC] [TIFF OMITTED] T9964.114
    
    [GRAPHIC] [TIFF OMITTED] T9964.115
    
    [GRAPHIC] [TIFF OMITTED] T9964.116
    
    [GRAPHIC] [TIFF OMITTED] T9964.117
    
    [GRAPHIC] [TIFF OMITTED] T9964.118
    
    [GRAPHIC] [TIFF OMITTED] T9964.119
    
    [GRAPHIC] [TIFF OMITTED] T9964.120
    
    [GRAPHIC] [TIFF OMITTED] T9964.121
    
    [GRAPHIC] [TIFF OMITTED] T9964.122
    
    [GRAPHIC] [TIFF OMITTED] T9964.123
    
    [GRAPHIC] [TIFF OMITTED] T9964.124
    
    [GRAPHIC] [TIFF OMITTED] T9964.125
    
    [GRAPHIC] [TIFF OMITTED] T9964.126
    
    [GRAPHIC] [TIFF OMITTED] T9964.127
    
    [GRAPHIC] [TIFF OMITTED] T9964.128
    
    [GRAPHIC] [TIFF OMITTED] T9964.129
    
    [GRAPHIC] [TIFF OMITTED] T9964.130
    
    [GRAPHIC] [TIFF OMITTED] T9964.131
    
    [GRAPHIC] [TIFF OMITTED] T9964.132
    
    [GRAPHIC] [TIFF OMITTED] T9964.133
    
    [GRAPHIC] [TIFF OMITTED] T9964.134
    
    [GRAPHIC] [TIFF OMITTED] T9964.135
    
    [GRAPHIC] [TIFF OMITTED] T9964.136
    
    [GRAPHIC] [TIFF OMITTED] T9964.137
    
    Mr. Dingell. What exactly, Dr. Zerhouni, does this 
privatization or outsourcing do that is not done by the 85 
percent of your money that goes outside the walls of NIH to 
support work elsewhere?
    Mr. Zerhouni. The idea is really competitive outsourcing. 
There are two words here. On the one hand it is responding--
this initiative has been ongoing in the Government for years, I 
am told. On the one hand it is to try to assure taxpayers that 
we are doing the best job possible. On the other hand there is 
a sense that there are mission critical areas and non-mission 
critical. So OMB decides which jobs are commercial, for 
example, facilities, secretarial support, and which jobs are 
core to the mission. Then our employees determine what is the 
most efficient way we could render that service? That is then 
competed and the competition then determines and provides 
assurance that we have done the best job that we can.
    In our case we have shown already with the grants 
management administrative functions that no one out there can 
provide the services well, these very specialized scientific 
support functions, as well as our own employees, and my 
recommendation has always been we should win these competitions 
if we can, and assure you that we are doing the most effective 
job possible.
    Mr. Dingell. Doctor, could you submit to us in writing 
exactly what this plan for outsourcing is, exactly what 
instructions you got from OMB so we can look and see? Would you 
do that for us, please?
    Mr. Zerhouni. I certainly will.
    Mr. Dingell. I ask unanimous consent, Mr. Chairman, that be 
put in the record.
    Mr. Gregg. Of course.
    Mr. Dingell. Doctor, just one more question. Were you 
consulted before this thing was put together and handed to you?
    Mr. Zerhouni. No.
    Mr. Dingell. Was there any consultation with NIH before 
that happened?
    Mr. Zerhouni. Yes.
    Mr. Dingell. There was?
    Mr. Zerhouni. I understand that--and I should really defer 
to our management people, but the NIH consulted and discussed 
the implementation, the specifics of the implementation.
    Mr. Dingell. But not the idea that it was going to be done.
    Mr. Zerhouni. Not the idea, no, sir.
    Mr. Dingell. Mr. Chairman, I think I have used my time. 
Thank you.
    Mr. Gregg. Thank the Congressman.
    In your roadmap, Dr. Zerhouni, do you need legislative 
changes to accomplish your roadmap relative to your authority 
or relative to the balance between the different institutes?
    Mr. Zerhouni. Yes, I think we need to look at that. I am 
not sure exactly what form, but I think the report that Dr. 
Shapiro mentioned, addresses the two needs. Dr. Varmus also 
mentioned you need two components to this. You need a mechanism 
for planning, either clustering like institutes or the NIH 
Director doing it, and you need a funding mechanism that you 
explicitly support so that the NIH Director--institute 
directors are not put in the conflicted situation between 
deciding whether they invest for common good or for their 
specific missions.
    Mr. Gregg. It would be helpful, maybe you should sit down 
with my staff and with Senator Kennedy's staff and with the 
staff from the House, both sides, and give us what you think 
you need, and we can maybe develop language that would 
accomplish the roadmap and reach a consensus so that it is not 
compromised, so it does not end up being divisive, but actually 
is constructive to the process, if you think you need that. We 
would offer that opportunity to you.
    In the peer review process, does not the peer review 
process, as it is presently structured, inherently favor the 
silo approach in the sense that those folks looking at an issue 
are not likely going to look outside of the silo and look at a 
more interdisciplinary approach? I am not trying to undermine, 
I am just saying does it have some adjustments that might be 
needed?
    Does the peer review process--I would be interested in all 
of your responses to this--does the peer review process 
adequately balance results to the population as a whole, health 
care results? What is the biggest risk? What is the best return 
to the dollar? What has the most impact? Where are we closest 
to getting something versus just the academics and the basic 
science?
    Mr. Zerhouni. These are very important questions. These are 
core questions to the health of the Agency itself. In terms of 
peer review, actually my predecessor, Dr. Varmus, had 
undertaken the first review of the peer review sections in 
many, many years, and Dr. Ellie Ehrenfeld conducted a major 
change. What is important here is that the peer review sections 
are independent of the institutes. This is the beauty of the 
system. These are truly scientific panels, the membership of 
which rotates every 4 years, designed by the FACA rules to be 
very equilibrated in terms of representation across the 
country, different sources of scientists. From that standpoint 
that system had adaptive capabilities provided the Director 
provides the impetus for that.
    The second question you are asking is I think the more 
fundamental one, and that is once we have looked at projects 
and decided that they are good, are we focusing on the 
priorities? That is what I think in my testimony I am referring 
to. We need to have better mechanisms to understand the 
portfolio in relation to science, public health and society, 
and manage it better. So those are my two comments.
    Mr. Gregg. Dr. Varmus?
    Mr. Varmus. Two brief points. I am largely in agreement 
with Dr. Zerhouni said, but it is important to understand that 
there is a strong separation between program planning and 
review, so when Dr. Zerhouni sets up these imaginative new 
programs under his roadmap proposal, there would be a 
solicitation for grant applications, and then special study 
sections that are designated to review the applications that 
are returned in response to that solicitation, so there would 
be no conflict between making decisions about grants that would 
go to individual investigators in traditional institute 
programs and these trans-NIH programs. They would be separately 
reviewed.
    The second issue you raise is what are the criteria by 
which individual reviewers review grants? It is important to 
understand here that although the NIH promulgates a set of 
broad criteria, which include innovation, significance for 
public health needs, feasibility, the track record of the 
investigator, the institutional context. Every individual 
reviewer is going to have their own view of what weight to give 
to those various criteria. When budgets are tight and success 
rates are low, there tends to be a bias toward feasibility and 
conservative funding, and when budgets increase more 
dramatically there is a willingness to take on more imaginative 
research to fund trans-NIH initiatives. It is important to 
remember that there is going to be a linkage between whether 
the NIH is constrained for funds in the immediate future, 
conditions that will promote institute directors to try to keep 
their own programs and investigators going without donation to 
the common pool, as opposed to a situation where NIH receives 
enough new money each year to ensure that there are a growth of 
programs and the expeditious pursuit of some of the new and 
dramatic plans that Dr. Zerhouni's roadmap outlines.
    Mr. Gregg. But what you are both saying is you are 
sensitive to this and trying to resolve it, but it is an issue.
    Senator Kennedy?
    Mr. Kennedy. Thank you very much, and thank our chairs for 
having this hearing.
    All of us take an enormous sense of pride in the NIH, and 
to have three extraordinary individuals, Harold Shapiro from 
the Institute of Medicine, the present head of the NIH, Dr. 
Zerhouni, and the former Director, Dr. Varmus here, expressing 
much more agreement than differences is enormously important 
for the American people to hear. It is appropriate that we have 
this kind of hearing now at the dawn of the life sciences when 
the possibilities for discovery are breathtaking. The continued 
commitment, from Republicans and Democrats for in the funding 
of the NIH has been one of the most exciting things to happene 
in this city in terms of health care. So I thank all of you for 
your attention to this issue.
    I want to quickly state for the record what we have seen 
with regards to the increases in the NIH budget over the past 
several years. During the doubling, the NIH received 14 and 16 
percent increases. This year, that figure has dropped to 2.5 
percent increase. The result of that has been, as you look at 
this, is the stifling of scientific innovation. The fact is 
that there is going to be actually a reduction in the number of 
non-biodefense grants. Many in the Congress say, well, look, we 
have invested enormously in the NIH, have we not overinvested? 
Are they not just swimming in resources? Here we see the result 
of the precipitous drop in funding. You cannot read these 
charts without being disappointed that we may be missing some 
kind of opportunity.
    I would be interested--time is going to move along 
quickly--to hear from each of you your reaction to the pressure 
this line of funding will have on study-sections reviewing and 
selecting grant applications and comment on the quality of some 
of the applications that are not going to get funded? How much 
are we going to sort of lose out on it? Maybe just very 
quickly?
    Mr. Zerhouni. Just very quickly, Senator. I think you are 
identifying the core administrative challenge for us, to go 
from acceleration to a rapid deceleration presents programmatic 
challenges that we are trying to address. That is No. 1.
    No. 2, if the success rate drops significantly then I think 
Dr. Varmus' observation is correct, people will tend to be more 
conservative and take less risk in research.
    Mr. Kennedy. Dr. Varmus?
    Mr. Varmus. Senator Kennedy, I think we all appreciate the 
increase that NIH has received over the last several years with 
respect to its entire budget, and the consequence has been that 
the size of grants has been able to enlarge, to catch up to the 
pace that it should have maintained in intervening years, so 
grants are individually more expensive. We have attracted a lot 
more people into the field. The genome project and many other 
new innovations have created both remarkable new opportunities 
for doing biomedical science that means important things to the 
health of the American people and also costs more because of 
the kind of technology involved. To go from a series of 15 
percent increases to a small percentage increase is going to 
have a very detrimental effect on our ability to continue that 
progress.
    The Joint Steering Committee for Public Policy, 
representing a number of scientific societies which I chair, 
has a report which I would be happy to submit for the record, 
analyzing the impact of these anticipated changes on the 
ability of the biomedical research enterprise here to function 
adequately, and I would be happy to submit that for you.
    Mr. Kennedy. Dr. Shapiro?
    Mr. Shapiro. Yes. This is a moment of extraordinary 
opportunity which I think this country does not want to miss. 
It is always difficult to make budget adjustments. We all 
understand this, but I do not think we want to pass by a moment 
of great opportunity here for the benefit of the citizens of 
this country and indeed around the world, in a time when we not 
only are continuing the normal activities at NIH, but as Dr. 
Zerhouni and others have mentioned before, because of the 
nature of the scientific developments that are taking place, to 
also sort of reshape some of it, to both reshape and adapt 
under these circumstances may cause us to lose an opportunity 
here.
    Mr. Kennedy. Just on the other subject that was brought up 
by Congressman Dingell about the privatization of jobs. I 
understand the Washington Post reported that the NIH spent $7 
million and over 100,000 staff hours, to study job functions 
and compete for the outsourcing of different jobs, and after it 
was all over, the NIH employees won the competition. Is that 
right?
    Mr. Zerhouni. That is correct, Senator.
    Mr. Kennedy. So they have spent some $7 million, and over 
100,000 man-hours--I do not know how many of those grants could 
have been funded with that $7 million.
    I regret I missed your opening statement, Dr. Zerhouni. We 
have had a good opportunity to talk about the roadmap and I 
think all of us are impressed by what you are doing out there 
at the NIH and the thought that has gone into this roadmap. We 
want to have a chance to study it and study it carefully and 
closely. We thank you.
    Just one final point on political interference in 
scientific advisory committees. There are always the 
questions--and then my time is up, and I will ask each of you 
this--about political interference. We are talking about 
ideology overcoming science, whether it is from the left or the 
right. How extensive is it and how important is to be resolute 
and not let it interfere in the extraordinary work of the 
institute?
    Mr. Zerhouni. I think it is very clear that science needs 
to advance in a way that is supported by the entire political 
spectrum, because as I said in my confirmation hearing, I do 
believe that disease knows no politics.
    Mr. Kennedy. Dr. Varmus?
    Mr. Varmus. I think it is very important that we reaffirm 
the principles that the leaders of the institutes and the 
advisers to the institutes be selected based on their 
qualifications as informed members of the scientific and 
medical communities.
    There have been instances we know in the last couple of 
years, not common, but some, in which political questions have 
been raised and political considerations have influenced the 
choice of some advisers, and even a very small number of those 
examples sets off an alarm in the scientific community about 
the way in which the Government deals with the NIH. The NIH is 
a fragile flower in Government, and it is a remarkable creation 
of our Government, but it needs to be insulated from partisan 
politics, and all of us here agree with that.
    Mr. Kennedy. Dr. Shapiro, then my time is up.
    Mr. Shapiro. I just would like to support what Dr. Zerhouni 
and Dr. Varmus have said, and indeed, one of the final 
recommendations on our report deals directly with this issue. 
For those of you that are interested and have the report, it is 
Recommendation 13 at page 91, but it is entirely consistent 
with what Dr. Varmus and Dr. Zerhouni just said.
    Mr. Bilirakis. Thank you, Senator. Your time has expired.
    Mr. Pitts to inquire for 5 minutes?
    Mr. Pitts. Thank you, Mr. Chairman, and again, thank you 
for having this important hearing. Thank you, gentlemen, for 
your testimony.
    I will submit my opening statement for the record, Mr. 
Chairman.
    [The prepared statement of Hon. Joseph Pitts follows:]

Prepared Statement of Hon. Joe Pitts, a Representative in Congress from 
                       the State of Pennsylvania

    Mr. Chairmen, thank you for holding this important hearing. Per the 
Chairman's request, I will keep this opening statement brief.
    I am eager to hear from our witnesses about how we can best 
accelerate the progress of medical research, for that truly is the 
purpose of the National Institute of Health.
    According to its website, the NIH is the ``steward of medical and 
behavioral research for the Nation,'' Congress trusts the NIH to use 
taxpayer money to fund studies and glean understanding from research in 
order to prevent illness and save lives.
    As a steward of taxpayer resources, therefore, the NIH should be 
responsible in how it allocates that money to ensure that its research 
contributes positively to the life of our nation.
    While I realize this hearing is primarily focused on the 
organizational structure of the NIH and program implementation there, I 
am concerned about several grants that have been funded recently. 
Hopefully, during the time of questioning, the witnesses will be able 
to address my concerns.
    In the state of California, the NIH has funded a study of 
``commercial sex workers at massage parlors (Asian masseuses).'' This 
is odd, given the fact that prostitution is illegal in California. 
Wouldn't the money be better spent on a program trying to end this 
practice, finding these women the care they need and helping them find 
legitimate jobs?
    The ones most disconcerting to me are a $147,00 taxpayer-funded 
study that ``will assess the subjective and genital arousal of 180 
lesbian, bisexual, and heterosexual women as they watch erotic video 
clips'' and a $470,000 study which includes getting people drunk and 
showing them pornography.
    The NIH also hopes that spending $3 million of taxpayer money will 
help us gain insight into American Indian and Alaskan Native lesbian, 
gay, bisexual, transgendered, and two-spirited individuals.
    Further, the NIH is spending $276,000 to study the sexual habits of 
older men, $107,000 to study ``mediums, or individuals who regularly 
enter altered states of consciousness as part of religious ritual,'' 
$2.5 million on how to better promote the morning-after pill, $26,000 
to host a conference on sexual arousal, and $1.2 million to study giant 
pandas in the Wolong Nature Reserve in China.
    Mr. Chairman, I am not debating whether or not these issues should 
or should not be studied, but rather I am questioning the wisdom of 
using taxpayer resources to engage in research that has, at best, 
spurious benefits to our nation.
    The NIH has the potential to engage in much needed worthwhile 
research. Congress has seen fit to provide the agency with the 
resources it needs to carry out its mission.
    However, I question whether some of these studies are the best way 
to spend taxpayer money.
    While the NIH can find money to pay women to watch pornography and 
study giant pandas in China, funding for breast cancer, AIDS, diabetes 
and Parkinson's research continues to lag behind.
    I understand the grants I have mentioned are only a few out of the 
some 44,000 applications that the NIH receives each year. As a nation 
seeking to combat terrorism, and dealing with budget deficits and a 
sluggish economy, we must make sure that the limited resources we have 
are being spent in the most effective way possible.
    I yield back the balance of my time.

    Mr. Pitts. Dr. Zerhouni, you indicated that the NIH is 
doing ground-breaking research, and you are to be commended for 
a great deal of much needed worthwhile research. I think 
Congress has seen fit to provide the Agency with the resources 
that it needs to carry out its mission, but in these days of 
tight budgets and increasing deficits, and as we have heard in 
the previous line of questioning, perhaps research that needs 
to be done that is not being done, perhaps we should look at 
some of the research that might not be as beneficial or provide 
as many benefits to our Nation as we think. I want to ask you a 
couple of questions. I am not raising these questions to debate 
whether or not these issues should or should not be studied, 
but rather, I am questioning the wisdom of using taxpayer 
resources to engage in research that I think at best has 
spurious benefits to our Nation.
    We faced an amendment on the floor. I believe it was my 
colleague, Mr. Toomey, that offered the amendment to Labor-HHS 
appropriations bill, that would have prohibited funding for a 
number of grants, and one of them was to the Kinsey Institute. 
It was entitled, ``Moot Arousal and Sexual Risk-Taking,'' that 
in looking at this, it pays people to watch pornography, and 
another one pays some to drink alcohol prior to being shown 
pornography. Now, is this true? Why?
    Mr. Zerhouni. I know you are very concerned about that, 
Congressman, and I know many of the members have expressed 
concern about these grants. I can tell you in that particular 
grant, we are not paying subjects, research subjects to drink 
alcohol. We are not paying them to watch sexually explicit 
material. We are paying them to participate in the research 
that was the point.
    But I do take your point seriously. As I said in my opening 
statement, I think we owe it to ourselves to look at the 
balance between science, public health and society. To me, the 
most important issues was, No. 1, do we have a process here 
that has integrity in how these grants get funded, peer 
reviewed? I asked my institute directors. I said, ``Inform 
me,'' because I heard about your concerns and I saw the Toomey 
amendment proceedings, and there is clearly a need for us to be 
transparent and open to make sure that you are comfortable, 
because it would be detrimental for all of us if a small 
portfolio of the Agency was opaque to taxpayers, so I wanted 
full transparency. I asked my directors, ``Please review. The 
critique is not my area of expertise. Tell me how this was 
reviewed, how did it get to the point of being funded? Is this 
relevant research,'' as Dr. Varmus was saying? ``Is it public 
health relevant,'' and so on.
    The responses I have received from my experts is that at 
the end, when they reviewed all of these grants, there was 
scientific justification, there was definitely a public health 
connection. However, that being said, I think we need to 
address the fundamental question you are asking, and that is, 
are we putting the money in the right place, and that is a 
portfolio management analysis. As I said, this is a core issue 
that we will look into and study further.
    Mr. Pitts. For the record, I am quoting the application 
here. ``During the alcohol sessions, subjects are presented 
with an erotic film clip before they consume alcohol, and after 
they have reached two different blood alcohol levels they will 
be paid $50 for their participation in the studies that do 
include the measurement of physiological responses.'' That is 
what it says.
    Another question. What mechanisms do you have in place so 
that even if the peer review process finds these proposals 
credible, that we have some standard of science or common sense 
oversight before we write a check out from the taxpayers? I 
have a hard time answering my people in town meetings who ask 
me, ``Are you paying people to get drunk, to watch pornography 
using taxpayer money?'' They work hard all day. Can you give us 
a feeling of comfort here about these studies?
    Mr. Zerhouni. I can definitely understand how one would be 
concerned if the research is presented that way and not look 
into the total context. But the key question you are asking is 
do we have a process that has integrity in it that represents 
the public's view? Our advisory councils are two-thirds 
scientific members and one-third public members. Each one of 
these proposals is in fact approved by a community-based 
institutional review board. I have to believe--it is not my 
area of research--I have to believe that these processes should 
work because they are stated in law. I want to review that. I 
want to make sure that we are doing everything that the law 
says we should do in terms of these processes. In addition to 
that, I think we need to look at the total balance of the 
portfolio and understand exactly how we are responding to it.
    Mr. Pitts. Thank you.
    Mr. Bilirakis. The chair recognizes Mr. Brown, the 
gentleman from Ohio, to inquire?
    Mr. Brown. Thank you, Mr. Chairman.
    I have a series of questions, Dr. Zerhouni, that I would 
like to submit in writing if you would answer those. Thank you 
for that.
    I want to follow up on Mr. Dingell's comments a little bit 
about OMB and Senator Kennedy's about ideology over science. In 
response to a directive from OMB, NIH diverted $233 million 
from research funding to develop and study anthrax vaccine. 
According to press accounts--and Mr. Waxman has raised this 
issue too--according to press accounts, NIH, to fund this 
project, reduced grants on TB, on AIDS and malaria, affecting 
more than 500 scientists, and you could certainly make the case 
affecting some 6 million people who die every year from those 
three diseases. Dr. Fauci of NIH was quoted as saying this was 
the first time in the 116-year history of NIH that any research 
institute has ever been ordered to carry out a major applied 
science program.
    Would you share your thoughts with the committees on 
whether it is appropriate for OMB, a political arm of the White 
House, to direct NIH funding away from research, away from 
actual research grants in progress?
    Mr. Zerhouni. I have looked into that issue. I do not think 
it is a political issue. It is a budgetary mechanism issue. 
When the budget of NIAID was urgently approved for an increase 
of $1.6 billion, in that budget was $250 million for 
procurement and development. The intent there was to have 
appropriated dollars to procure and develop anthrax vaccines as 
they became available. So NIAID worked on it, and between OMB 
and NIH, essentially the issue became: you have committed in 
the initial budget to purchase that. The Senate removed that 
$250 million, allocated it to other areas. Basically the 
conflict that year was over $233 that million was designated by 
OMB for one purpose and then another purpose appeared. I 
totally understand, and I am just as Dr. Fauci is, unwilling to 
see dollars for research go to dollars for procurement. That 
needs to be clarified. We worked on it. We clarified it. The 
base $250 million is staying in the NIAID base and will be used 
for research on a going forward basis. I understand your point, 
but those are the facts, sir.
    Mr. Brown. They are the facts, but I think as Dr. Varmus 
pointed out, that politics/ideology should not trump science, 
and if Congress had come back and said: Spend this money on 
anthrax, and not that we do not want to do that perhaps, but it 
seems there is a trend here on the administration saying: Yes, 
we want to do more on HIV/AIDS, TB and malaria, then pulling 
back, whether it is saying in the budget request: Yes, we want 
to do it, but then pulling back and pulling another strong back 
that does not lead us in that direction. I am concerned about 
that ideology all too often trumping good sound science.
    Let me shift for a moment on the National Institute for 
Diabetes and Digestive and Kidney Diseases has been chronically 
underfunded in comparison to other institutes. This is of 
particular concern because many of these diseases 
disproportionately impact minority groups. You talked in 
response to Chairman Bilirakis, Chairman Gregg's questions 
about the roadmap. Can you assure us your roadmap will not 
leave minorities on the off ramp?
    Mr. Zerhouni. I can assure you of that, absolutely. This is 
one of the core reasons we are organizing, for example, the 
community based clinical research enterprise, because we feel 
that is the only way we are going to address health disparities 
and minorities. If we are not present in their community, 
connected to a fully developed and federally supported system 
of clinical research, it would be hard for us to make progress.
    Mr. Brown. So what specifically are you doing with the 
National Institute for Diabetes and Digestive and Kidney 
Diseases?
    Mr. Zerhouni. Again, I think your issue is related to 
rising diseases like diabetes and obesity. One of the things 
that we did not want the roadmap to be was to be generic to any 
particular diseases process because we thought if that was the 
case it should be handled by the disease specific institute. So 
Dr. Spiegel is leading a Trans-NIH obesity task force, and that 
is the way we are trying to address this issue, make the case, 
so that this obesity crisis can be managed.
    Mr. Brown. Are you coordinating with CDC on their anti-
obesity campaigns?
    Mr. Zerhouni. We are.
    Mr. Brown. How are you doing that?
    Mr. Zerhouni. Basically, all of our obesity task force 
people have worked with FDA and CDC trying to find common 
ways--for example, in the diabetes area we have even 
coordinated the screening capabilities, trying to enhance the 
screening capabilities of CDC. I cannot give you the details of 
operations, but I know we intend and we are working with CDC. 
But the effort is early and we need to do more.
    Mr. Brown. I thank the chairman.
    Mr. Bilirakis. Under agreement, the next round is for 
members of the Senate. Senator Clinton?
    Ms. Clinton. Thank you, Mr. Chairman. I welcome all of our 
House colleagues to the Senate, and our witnesses. I appreciate 
very much the opportunity to have this joint hearing. I think 
this is a very good example of the kind of cooperation that we 
actually need more of, and so I appreciate this effort here.
    To the witnesses, I thank all of them for their years of 
work in their various capacities, and I am delighted to see my 
constituent and friend, Dr. Varmus, here today.
    I wanted to ask about comparative effectiveness. I know 
that in the past the NIH has funded some studies such as 
evaluating the comparative effectiveness with respect to some 
of the high blood pressure and other issues. I know that last 
December the National Heart, Lung and Blood Institute published 
a study correcting the assumption that newer drugs such as the 
calcium channel blockers and the ACE inhibitors, which cost 30 
to 40 times more than diuretics, which had been the long-term 
treatment for high blood pressure, that in fact the newer 
treatments were less effective than the old-fashioned 
diuretics.
    Then in January of 2003 another NIH-sponsored study 
compared two glaucoma drugs and found that despite the fact 
that one of them, latanoprost was more popular; another, 
bimatoprost, was more effective. Now, this is the kind of 
information that patients and clinicians desperately need, and 
it is also important because oftentimes the new therapy is not 
more effective but much more expensive, so this has cost 
implications as well. Yet these types of comparative head-to-
head studies are too few and far between.
    Why has NIH not been able to provide more research in this 
area, which I think really falls within the definition of the 
work that should be done by the NIH? It is not cutting edge 
research, but it is extremely important to actual medical care. 
What would you recommend that we could do to improve 
comparative research? Dr. Zerhouni? Dr. Varmus?
    Mr. Zerhouni. This is a very good question, because as you 
know, drugs are approved relative to a placebo, and when they 
come into practice they are not really compared to placebos, 
they are compared to other drugs. Doing clinical trials of this 
nature is extremely expensive. The entire budget of NIH would 
not suffice to address all the questions. It is very, very 
expensive, unless you have a infrastructure that is designed 
for that. That is actually one of the goals of the roadmap, to 
have an informatics infrastructure that links patients and 
understands what prescriptions have been prescribed so that we 
can detect trends very quickly.
    Let me give you two examples. One is the Women's Health 
Initiative. I think if the country had had a system like this, 
we would have discovered much sooner and we would not have had 
to spend the hundreds of millions of dollars in the Women's 
Health Initiative, that the dogma, that long-term hormone 
therapy was good, was incorrect.
    When we make selections--and you have mentioned NIH studies 
of comparative effectiveness--we have to look at the public 
health impact. In the case of high blood pressure it is such a 
public health issue, we had to invest. When you look at 
glaucoma, it is such a major rising cause of loss of vision, we 
had to invest. So again, the bar is we want to do research of 
that nature if we have the means and it does not imbalance the 
need for us to advance on a fundamental level, but we have to 
realize that we have limits, and our limit is set when we see 
that millions of people are affected, and our public health 
estimates indicate a need for that study.
    The closing statement I would like to make for you is we 
decided to do the Women's Health Initiative against much 
opposition at the time, because as public health experts, if 
only 1,000 people take a drug and there's a 1 percent 
complication, it affects 10 people. But when 10 million people 
take the drug, then it is a million people. So for us, 
obviously, as a drug or as a pattern of practice affects more 
and more people, effectiveness studies become more important.
    Ms. Clinton. Dr. Varmus?
    Mr. Varmus. If I might just make a few additional comments? 
Obviously, I agree with what Dr. Zerhouni said. In many 
clinical trials of course there are comparisons between the 
standard of care and a new therapy. But there may be multiple 
standard therapies and getting the comparisons of the sort you 
alluded to may not always be possible because of the high cost 
of doing clinical trials.
    The NIH is sometimes in a better position than the 
pharmaceutical industry from a certain point of view, to do the 
kinds of advanced trials that you are alluding to because the 
drug industry has very little incentive to do studies of drugs 
that have already been approved, and therefore, this is a 
particularly attractive role for the NIH. Nevertheless, so-
called Phase IV studies, efficacy studies of approved drugs, 
are expensive. They require large cohorts of patients. We have 
a difficulty in this country that not enough of our care is 
administered in the context of a clinical trial. In the case of 
adult cancer, for example, progress has not been as fast as you 
and I would have liked, because only about 3 percent of the 
adult cancer population is in a clinical trial, in contrast to 
what had happened in pediatric cancer. So it is important that 
we mobilize the resources of NIH and patient populations and 
community physicians, as the roadmap plan does to try to build 
an infrastructure that will allow the trials to occur with less 
expense because there are existing mechanisms for doing the 
trials, and in that way the roadmap plan could lead to more 
studies of the kind that you are suggesting.
    Ms. Clinton. Thank you.
    Mr. Bilirakis. Thank you, Senator.
    Mr. Flanagan, for 5 minutes?
    Mr. Ferguson. Ferguson, Flanagan, Irish role----
    Mr. Bilirakis. Ferguson, Flanagan, I think I have made that 
mistake before.
    Mr. Ferguson. Thank you, Mr. Chairman. I want to thank our 
hosts in the Senate for having us here today. We appreciate it. 
I want to thank our witnesses for all of your good work. All of 
us and our loved ones have benefited in some way, and certainly 
our children and grandchildren will benefit in some way by the 
extraordinary work and the research of the NIH and we certainly 
appreciate all of your efforts on their behalf.
    I want to lend very briefly my voice of support to the line 
of questioning that my colleague, Mr. Pitts, had before. It is 
a very real life concern when you have constituents who read in 
the newspaper or read in a publication about certain projects 
that are being funded by NIH and trying to justify that. I have 
a list of them and I will read a few of them without trying to 
be provocative. But the fact that we are funding projects which 
by talking about them in an open forum could be construed as 
provocative is problematic in itself, frankly. Study of porn 
reactions. This is a list of grants that have been made by NIH. 
Study of sexual habits of older men. Study to promote the 
morning-after pill. That is a quote, not to study, but a study 
to promote the morning-after pill. American Indian transgender 
research. A prostitute masseuse study. It is difficult to 
comprehend what medical benefit, what public health benefit 
could be derived. Perhaps there is some, but when you are 
weighing it against competing projects it is very difficult to 
see how that can be justified.
    Dr. Zerhouni, if you would provide us, perhaps in writing. 
I know you said that you--I understand that these may not be 
areas of your expertise and you have talked to the folks in 
regard of the Toomey language--if you could provide us just a 
written explanation for the medical benefit that is hoped to be 
derived from these studies, we would certainly appreciate it.
    Just a quick comment. We looked at the chart before on the 
rates of increase of NIH funding. Just a quick question, Dr. 
Zerhouni. When we talked about doubling the funding for NIH 
over the course of years with 14 and 15 percent annual 
increases, was there ever any understanding on your part that 
those double digit extraordinary increases would continue 
annually in perpetuity?
    Mr. Zerhouni. No, not at all. I mean there is no such thing 
as a perpetuity budget that I can imagine ever being given.
    Mr. Ferguson. So the fact that we have a 2.5 percent 
increase this year is perfectly reasonable?
    Mr. Zerhouni. Like I said, I think that the macroeconomic 
environment we deal with always changes and decisions have to 
be made, obviously, that balance needs. There is no question 
though that going from a certain acceleration to a deceleration 
is challenging.
    Mr. Ferguson. Of course, clearly. But I do not think anyone 
at NIH would ever expect to see a 15 percent annual increase as 
far as the eye can see.
    Mr. Zerhouni. I do not think anyone expects it. Budgets go 
year to year.
    Mr. Ferguson. Fair enough. I have a couple more questions, 
and my time will be short. Dr. Zerhouni, are you satisfied with 
the current relationship between the NIH, the academic 
community, the FDA and the private sector, in terms of taking 
the research that is done and funded through NIH, and getting 
that eventually to a product or a treatment that could actually 
help a patient?
    Mr. Zerhouni. Not fully.
    Mr. Ferguson. Why?
    Mr. Zerhouni. I think we need to make progress there. The 
pharmaceutical industry now has standards for investing related 
to market size. There are many other diseases which do not fall 
within that category. There are early steps, as I said, as in 
the roadmap, a presentation, the complexity that is not being 
addressed as well. We work very closely with FDA in terms of 
understanding adverse events, and we are building bridges to 
make it easier. But 13 years to go from a discovery to an 
application that is approved is too long.
    Mr. Ferguson. It is too long. What would be long enough? 
What goal would you have in your head to want to get that 
number to?
    Mr. Zerhouni. Well, I think two things. One is we need to 
do more science to understand and predict what will work, what 
will not work. You know, out of 300 early candidate drugs, 
there is only 1 that eventually succeeds. That is such an 
unpredictability, it is very hard for anyone to invest with 
certainty. So science needs to improve the degree of 
predictability.
    Then, obviously, we need to understand the safety issues 
better, and Commissioner McClellan is doing an outstanding job 
trying to link our two agencies so that we can make more 
predictable products that have a lesser burden of proof, if you 
will, for acceptability in the marketplace. There is no number 
there that I can give you, by the way, for that, Congressman. 
Some products will take 10 years, it is unpredictable.
    Mr. Ferguson. Sure. Last question. As Dr. Shapiro certainly 
knows, New Jersey, my home State of New Jersey has more 
researchers and scientists per capita than any State in the 
Nation. We are very proud of that. I think it is one of the 
things that makes our Nation, certainly the health care of our 
Nation, as strong as it is.
    My question is about the diversity, geographic and 
otherwise, the diversity of the grants that are made at NIH. 
Some people grumble that there has traditionally been a bias or 
a higher percentage of grants that go to maybe the more 
traditionally recognized academic institutions and other areas, 
like in California or Massachusetts, for instance. Are you 
satisfied with the diversity of the grants that are being made, 
particularly given the health care community in New Jersey and 
our extraordinary number of researchers and scientists?
    Mr. Zerhouni. It is never perfect, as you know. 
Distribution of particular investments in science always follow 
the opportunities. But I see a good trend. I see improvements 
in that distribution related to economic development. For 
example, Arizona was not a State where there was any funding 
20, 30 years ago. Now it is a major investment State for us. 
Washington State did not have much 35 years ago. So there is a 
correlation between numbers of researchers available, economic 
development, our ability to stimulate an infrastructure, and we 
are doing that. So the trend is toward the right direction. Is 
it perfect? No.
    Mr. Ferguson. Thank you again for all of your work, and 
appreciate your being here.
    Mr. Bilirakis. The chair thanks the gentleman.
    Mr. Green to inquire?
    Mr. Green. Thank you, Mr. Chairman. Like my colleagues, I 
would like to thank our panels here this morning. First of all, 
Mr. Chairman, I will have my statement to put into the record.
    [The prepared statement of Hon. Gene Green follows:]

  Prepared Statement of Hon. Gene Green, a Representative in Congress 
                        from the State of Texas

    Thank you, Mr. Chairman, for holding this joint hearing with the 
Senate Health, Education, Labor and Pensions Committee. It is a 
pleasure to join my colleagues here on the other side of the Capitol to 
discuss this very important issue.
    The NIH is the crown jewel of the federal government's biomedical 
research endeavors. That the Congress upheld its commitment to double 
the NIH budget exemplifies the amount of trust and respect we have for 
the fine work done by this institution.
    However, in the wake of that massive increase in funding, we have 
an obligation to study how those funds have been spent, whether there's 
ways we can improve the efficiency and function of the NIH, to identify 
major opportunities and gaps in biomedical research, and how we can 
assure that our goals for that doubling--better treatments and cures 
for a host of diseases--can be reached.
    This hearing gives us an excellent opportunity to examine the 
recently released Roadmap that was announced by Dr. Zerhouni earlier 
this week.
    Among the innovative initiatives in the Roadmap is the promotion of 
clinical research. Over the years clinical research is becoming more 
difficult to conduct.
    The basic science discoveries demand clinical research; however, 
patients with serious disorders are more likely to be treated by 
community physicians than by academic centers.
    The Roadmap would encourage the development of new partnerships 
among organized patient communities, community-based physicians and 
academic researchers, which would help in development of efficient 
treatments and prescriptions.
    This plan also encourages the collaboration between different types 
of scientists, looking for scientists to share their findings and break 
that ``silo mentality'' which often isolates scientists from their 
peers.
    The Roadmap not only encourages scientists to share their ideas, 
but will also reward scientists who engage in creative thinking and 
take on innovative approaches with $500,000 grants. This could open the 
way for new discoveries in different areas, without the pressure of 
failure.
    Looking to accelerate research and make it more available, the 
roadmap provides for the creation of biomedical computing centers and 
molecular libraries, which would provide endless amounts of tools and 
information for researchers. This amount of new technology, without 
doubt, will be beneficial in the development of new strategies and 
techniques.
    NIH's Roadmap Plan is a very ambitious plan, however, if 
implemented it could open the door to a new kind of medical research in 
the 21st century; one that works towards common goals, one that is not 
afraid to take chances and one the works hand in hand with its 
patients.
    I am interested in learning more about this issue, and look forward 
to questioning our panelists about this exciting issue.
    Thank you, Mr. Chairman, and I yield back the balance of my time.

    Mr. Green. I would like to thank NIH for their success of 
researching disease and illnesses of our time, and the best of 
luck in the reorganization. I am glad it is the first time NIH 
is going to reorganize. I have been here 5 terms, and I think 
some Federal agency reorganized every term I have been here, so 
I am glad you are only doing it once and for the first time.
    All of us have particular illnesses we have interest in, 
and of course the issues of today, the diabetes, stroke, 
cancer, things like that. But, Dr. Zerhouni, I would like to 
ask some questions about two particular ones because of 
constituents in our district.
    Two years ago NCI researchers found that women with breast 
implants were twice as likely to die from brain cancer, three 
times as likely to die from lung diseases, and four times as 
likely to die from suicide compared to other plastic surgery 
patients. European studies have now found similar risk of 
suicide and lung disease for women with breast implants. What 
studies does NIH plan to conduct to examine these further? I 
think each of us probably have constituents in our district who 
have developed illnesses from breast implants. If you do not 
have an answer, we will be glad to submit or answer other 
questions on this.
    Mr. Zerhouni. If you do not mind, I would like to submit 
for the record.
    Mr. Green. I would appreciate a response. Also, two 
researchers at the National Institute of Environmental Health 
Sciences have conducted research indicating that women with 
silicone implants have undesirable immune responses that 
warrant further study. Again, what research does NIH plan to do 
to learn more about the impact of these immune problems? Those 
two researchers are Dr. O'Hanlon and Dr. Miller at the National 
Institute of Environmental Health Sciences.
    Also, Dr. William Katzen of the Case Reserve, Western 
Reserve Medical School, has conducted research indicating that 
women with silicone gel breast implants have silicone in their 
lymph nodes. Of course, this means that the silicone can 
migrate throughout their bodies, and I would like to see what 
NIH plans to do to examine the health effects of these leaking 
silicone implants. And I have some other questions on that in 
particular that I will be glad to submit, but I appreciate the 
information.
    Another issue that we dealt with in our office is 
communicated on the issue of scoliosis research at NIH, and I 
appreciate the response we received, NIH outlining the research 
of ongoing conditions. I know that much of the research is 
being done of a preventative nature, which I agree is much 
better to deal with preventative, especially for adolescents. 
But one of the concerns I have is many women, especially our 
older women for who scoliosis was not diagnosed because 
screenings were not as prominent 40 or 50 years ago have no 
options for treatment for their pain. I would like to see if 
NIH would look at treatment avenues also for our aging 
population. Is NIH planning any studies on the potential 
treatments for older women? Again, I think begin with our aging 
population, that will be a problem.
    Mr. Zerhouni. We will certainly follow up with you, sir.
    Mr. Green. I am often shocked at how sometimes Congress 
severely limits the administrative budgets of some of our 
important programs. Social Security, Medicare, NIH are examples 
how extremely small operating budgets can inhibit the abilities 
of the agencies to do their work. Can you detail additional 
administrative resources that would help NIH to achieve some of 
the goals laid out in your roadmap? That one probably is the 
easy one. Those other ones are specific.
    Mr. Zerhouni. That is right. Basically, the management 
budget of NIH went from about 4.2 percent to 3.2 percent in the 
doubling period, and obviously there is more absolute dollars, 
but relative to the size of the enterprise, it has not kept up 
with that. Actually, Dr. Shapiro could comment on that. It is 
certainly an issue because we will need to make investments to 
manage the portfolio better into more modern information 
systems.
    Mr. Shapiro. If I could just say a word about that. That is 
a recommendation in our report, to increase funding for 
research management support because while it is always 
difficult to say you are going to increase money for management 
or administration, but the fact is that if NIH is going to 
manage its responsibilities properly, the Director does need 
more of an opportunity to really provide world-class management 
for a very difficult and increasingly complex organization. So 
we think this is an important thing for Congress to consider as 
it considers appropriations, authorizations for NIH.
    Mr. Varmus. Congress needs to remember that the NIH has had 
an increase in the number of grants that is very considerable, 
nearly 40 percent. Management of those individual grants 
largely in the institutes requires highly professional skilled 
scientific oversight, and I appreciate your remarks on this 
topic.
    Mr. Green. Thank you, Mr. Chairman.
    Mr. Gregg. I would just note, just to give everybody fair 
warning, that we are going to have to wrap the hearing up by 
12:15 or 12:30. I understand there are about 9 people who still 
wish to question, which works out about right, but I do want to 
make that point, and I certainly appreciate our witnesses' 
courtesy in staying. The hearing was supposed to go till 12 
o'clock. I appreciate our witnesses staying a little bit 
longer.
    Mr. Bilirakis. No problem in your staying for an extra few 
minutes or so? Good. Mr. Shimkus to inquire?
    Mr. Shimkus. Thank you, Mr. Chairman. It is great to be 
here, and I like many applaud the work that we are doing, and 
this restructuring, reorganization is good.
    Transparency is a big word that we are using now in 
Washington for a lot, not just for Government agencies but for 
our corporate citizens. We do much better when everything is 
very transparent.
    I was talking to my colleague, Mr. Greenwood, on the box 
that many of us were put on in an appropriation bill based upon 
the Toomey amendment. Many voted against it because they did 
not want to micro manage an agency, and I applaud them for 
making a decision. I voted for it because in this case I had to 
let ideology or politics, I had to let that intervene. I had to 
make a statement. So what my plea would be, let us be 
transparent.
    And in the guise of maybe more management issues to bring 
help, I am also concerned about another issue within the 
management cycle. I think that the application for dollars 
should be vetted based upon the application. And I will provide 
the example. It is the same one Mr. Pitts did. Concern out 
there is that the NIH is actually directing, conducting, 
advising applicants to stay away from certain words that will 
cause concern based upon Members of Congress, of people that 
oppose certain types of spending. Has that gone on?
    Mr. Zerhouni. No, this has not gone on from the standpoint 
of NIH. We never issued any instruction to anybody to modify 
what is it they think is scientifically justified to say or do. 
I actually heard that. There is no official or structured 
instructions to that effect.
    Mr. Shimkus. Dr. Zerhouni, if you would then, for me and 
for the members that are concerned about this, do some 
research.
    Mr. Chairman, I ask for unanimous consent to submit this 
side-by-side comparison of information placed on the NIH 
website, and it is on the same study Mr. Pitts mentioned. One 
dated June 13, 2003. The other one changed, posted, same 
application, same desire, same goals, with removals of some key 
buzz words that might cause people in a clearly transparent 
system to be confused by the application, and it is dated July 
7, 2003.
    Maybe if you could, and this will be submitted for the 
record, you can have it----
    Mr. Bilirakis. Without objection.
    [The comparison of Mr. Shimkus follows:]

    [GRAPHIC] [TIFF OMITTED] T9964.138
    
    Mr. Shimkus. And then work with the staff and see if maybe 
there is something going on. Maybe there is not. Maybe it is 
not approved at certain levels. But the most challenging thing 
for us to be, if you need more people to manage the 
applications, to make sure they are doing the things that are 
helpful in the studies, versus some political correct ideology 
that we want to be all things to all people. I tell you that 
the folks in Southern Illinois, I continue to support funding 
for NIH. But stuff like this will cause me and my folks in 
Southern Illinois to say, do not fund anything. What are we 
doing here? And it is a small percentage. And that is the thing 
that drives us crazy. Let us clean up the act.
    So that is the only line of questioning that I wanted to 
follow up on with Mr. Pitts. I do appreciate, again, the great 
work you are doing. I work with many of my colleagues on the 
Commerce Committee on extending stuff on research, and Chairman 
Bilirakis, Chairman Tauzin do a great job.
    With that, Mr. Chairman, I will yield back the balance of 
my time.
    Mr. Bilirakis. I thank the gentleman. I want to make it 
clear. My intent is that as long as the witnesses are willing 
to stay, that we go through all the inquiry, so I do not mean 
to cut it off unless they have to leave, but we unfortunately 
will not be able to go through a second round which I had hoped 
we would be able to do. I would intend to include Ms. Tubbs 
Jones if she were to hang around.
    But in any case, at this point, Ms. Capps to inquire?
    Ms. Capps. Thank you, Mr. Chairman. I appreciate our 
Senators hospitality, and also the testimony of the three of 
you. This is a very important topic, and I appreciate the 
overall goal of the review that you are conducting.
    Based on some past experience, I am mindful, Dr. Zerhouni, 
of the warning, if you will, or advice, the experienced advice 
from Dr. Varmus that we all strive to limit the role of 
politics--that is a fine thing for us to be talking about 
here--but in the management of the NIH it is dead serious that 
you be allowed to be scientists and carry out your work even 
with taxpayer monies because we trust your oversight.
    Actually, this question should really be posed of your 
roadmap policies but it is very vulnerable, if I could say 
that, but it is also a little hard to tease out. We have had an 
example on the other side of a particular issue and for the 
purpose of using it as an example of how insidious this can be, 
let me ask you, Dr. Zerhouni, to talk to us about current 
Federal stem cell research policies, and perhaps frame it in 
your overview, your roadmap, if you wish to, but I want to know 
specifically because I have constituents who ask me every time 
this topic comes up, NIH, of which I am so proud, you know, 
what is happening with stem cell research? Are the restrictions 
interfering with out ability to capture the enormous potential 
here, and should these policies be reexamined?
    Mr. Zerhouni. Again, let me state that prior to August 9, 
2001 there was no funding at NIH for any embryonic stem cell 
research, so the fact is that we are not limited in the amount 
of funding we can direct to stem cell research, and we are 
aggressively pursuing the field. I have established a trans-NIH 
task force which is transparent and involves members of the 
entire scientific community. We funded 88 supplemental grants. 
We are funding 25 new research grants. And we have worked very 
hard to make the lines that are eligible for funding available 
for wide distribution. The only limit we have is the decision 
the President made that derivations that occurred prior to 
August 9, 2001 are the only ones that the Federal Government 
can fund research on. Under that policy we are doing everything 
we can. There is no restriction on the amount of funding. If we 
have good proposals and they pass scientific muster, we will 
fund them.
    Ms. Capps. What kind of funding do you have in this area? 
And then talk a little bit about the constraints that that 
decision, that Presidential decision placed on you.
    Mr. Zerhouni. The funding, we started funding in 2002, 
September 30th, October 1, 2001, which is the fiscal year. In 
that year we committed about $29 million to embryonic stem 
cells, new field, and we are increasing that. I do not have the 
2003 numbers, but it is going at the right pace.
    You are asking me what are the limitations. I can tell you 
from our analysis the most important limitation at this point 
is to stimulate more researchers and create more teams of 
researchers that are competent and have enough expertise to get 
into this field. This is a new field so we are funding training 
grants to enable the training of scientists in that area. The 
human factor is--I do not think cell lines right now, the 
number of cell lines available is the immediate obstacle. I 
think it is more human capital.
    Ms. Capps. I want to get to Dr. Varmus too. But one follow-
up question. What is the barrier in the human side of it that 
you just mentioned, that you want to get more researchers 
involved?
    Mr. Zerhouni. Basically there are not enough people. This 
is a new field. This is something that just started and we need 
more people who understand how to culture these cells, 
understand their differentiation, their molecular pathways, how 
they become what they become. There is just not enough.
    We had a symposium in July. In June we were pleased to see 
a large number of new entrants to the field. We had 600 people 
at the symposium at NIH. Two years ago there would be 40 
people. So we are making progress, but if you ask me what is 
the No. 1 limiting factor, right now as a scientist I think it 
is having more people do more research in the field.
    Ms. Capps. I will put this one to you, Dr. Varmus. But I 
will make the comment that in the public eye around this time 
of the President's decision, just reading the newspapers, you 
heard about researchers that were leaving this country because 
they felt a chilling effect. I am wondering if that has 
something to do with the difficulty in attracting new 
scientists. But, Dr. Varmus, this all came about under--the 
genome, the DNA----
    Mr. Bilirakis. We are running out of time here. I am sorry.
    Mr. Varmus. I will respond very briefly. I believe that 
brain drain has been overemphasized. I agree with Dr. Zerhouni 
that we have built a cohort at the NIH of stem cell 
researchers. I would argue however that the ability to attract 
the best people into this field is going to be limited as long 
as there is the sense that the future of this field is not an 
open one. Those of us who run institutions outside the NIH are 
seeking other kinds of funding other than Federal funding, to 
support our research that goes beyond the Federal restrictions. 
We do believe this is an extremely promising, and provocative, 
important field, and I for one would be happier if the Federal 
funds could be used for newly generated lines and lines 
generated by somatic cell nuclear transfer.
    Ms. Capps. Thank you very much.
    Mr. Bilirakis. Mr. Rogers to inquire?
    Mr. Rogers. Thank you, Mr. Chairman. Thank you, members, 
for being here, doctors, one and all.
    I want to shift gears on you a little bit and talk about 
pain management. I know that the Pain Consortium with the 
National Institutes of Health has been deactivated or is not 
active, and was wondering, Dr. Zerhouni, if you can talk to me 
a little bit about what its status is today.
    Mr. Zerhouni. Again, I am going to ask you to give me the 
opportunity to provide you more detailed answers on the record, 
but in terms of pain, one of the areas where the roadmap 
actually focused, and it is in the documents, is the sense that 
we need better tools to measure pain, better tools to measure 
the health outcomes in patients the way patients perceive it. 
So that is one area.
    But in terms of the Pain Committee, I will submit that for 
the record.
    Mr. Rogers. Currently the only active pain research or 
attention that is being done is with the Dental Institute. Do 
you find that that is the right place for that activity?
    Mr. Zerhouni. Root canals do hurt. Let me just review this 
and comment. I think the Neurology Institute is also involved, 
but let me, give me the opportunity to respond to you in 
writing.
    Mr. Rogers. I will take those in written form. One of the 
things that--and obviously, pain is very important. One in five 
Americans are suffering from chronic pain, and when you look at 
our education institutions, some of the leading physician 
training institutes and universities around America do not 
dedicate any time to train physicians on pain care management. 
It is a very real and significant issue. I have introduced a 
bill of recent to increase by $60 million the money that we can 
spend at NIH for pain research, and I know that you are very 
active and passionate about going from the bench to the bedside 
in research, creating six regional facilities. What we found is 
overwhelmingly patients had nowhere to go. Doctors had very 
little understanding, for the most part, on how to treat 
chronic pain patients. You think this is the right direction to 
go?
    Mr. Zerhouni. It is certainly a topic of concern. As I 
said, we think we need better tools to measure it. You cannot 
manage what you cannot measure in science, and we thought it 
was very important for us to develop much better behavioral 
measurement tools for this area so that we can make progress, 
and we will continue to do so.
    The approach itself, I cannot comment. I am not really an 
expert in the field, but I will definitely look into it and 
provide you with responses. Your topic is very important.
    Mr. Rogers. Is there at any time going to be a national 
pain management meeting through NIH?
    Mr. Zerhouni. To my knowledge there have been pain 
management meetings. I know that this is a topic of interest 
across the country at institutions as well. Coordinating the 
care around the pain is a difficult issue because as you 
mentioned we do not even know where it resides in terms of 
specialty or who owns the problem. So I think it is a 
fundamental question that I think we have not resolved and 
certainly want to work to help.
    Mr. Rogers. And you will include extramural leaders in that 
process as well?
    Mr. Zerhouni. Always, always. We always do. NIH has almost 
a mantra to do nothing without side input from the extra-NIH 
community.
    Mr. Rogers. In your consortium, and you may have to respond 
in writing, but is there--who are the lead institutes that are 
participating?
    Mr. Zerhouni. Again, I do not know who the lead institute 
is, but I will provide you with that information.
    Mr. Rogers. I appreciate it. And again, I voted for that 
amendment, or against the amendment on the floor because some 
of the research that was--I am switching gears here and the 
members previously discussed it--mainly because I wanted to 
make sure that you had the right and ability to make those 
decisions. Michigan State University actually was doing some 
research that did not sound well, but once you got beneath the 
surface, it made a lot of sense, on SARS research and other 
things. I too want to caution on some of these studies, and we 
have had a letter in to you for sometime and have received no 
response, from four Members of Congress. And I am going to 
resubmit that letter to you, and I would urge a quick response. 
We want to help you make good decisions over there, but you do 
need to understand some would argue this is politics from the 
right and some would argue that it has already seeped in from 
politics of the left. We do not want, again, to micro manage 
the NIH. I think the powerful things that you can accomplish 
are great if we get out of your way and let you do it, but I 
think you can understand, by the questions here today, why this 
is an important topic, and why we need some answers and how we 
can get to the right conclusion. I am a former FBI agent, and 
some of those sexual behaviors I think can be translated into 
rape cases, pedophile cases and other valuable research in law 
enforcement, but we do not know that. And by reading the 
applications, you cannot even come close to that conclusion. 
You can help us by being very clear and very transparent and 
allow us to make good decisions so we are not climbing in your 
knickers.
    Mr. Zerhouni. I will do everything possible to make sure 
that the Agency does not become--that it remains the bipartisan 
supported agency that serves everyone, and I will do whatever I 
can to do that.
    Mr. Bilirakis. Mr. Allen to inquire?
    Mr. Allen. Thank you, Mr. Chairman. Thank all of you for 
being here today. This is a very impressive panel and your 
proposals for NIH are most interesting.
    Dr. Zerhouni, I wondered if you could back that visual 
display up one spot to the effect of portfolio management. I 
was struck by that. That seemed to be a good way of looking at 
a lot of these different issues.
    One issue, if you think about science, public health and 
society, and the interaction among them, one of the issues that 
we have been struggling with here in the Congress is how to 
make sure that not only are new and effective drugs developed 
but also that they are distributed, that people can actually 
get them who need them, and that is not directly your business. 
But I want to follow up on Senator Clinton's comments earlier 
about the comparative effectiveness and the cost effectiveness 
of different drugs, because I think that is a potential area 
for NIH to play a vital role. I am the sponsor of legislation 
in the House of Representatives which would authorize $50 
million to NIH for comparative effectiveness and cost 
effectiveness studies, plus $25 million to the Agency for 
Health Research and Quality in Human Services.
    What we are really trying to do is make more and better and 
more objective information available to patients, to 
clinicians, to State Medicaid agencies and frankly, to the 
private sector, or others that are purchasing large quantities 
of drugs. This legislation would emphasize effectiveness 
studies for classes of drugs that are particularly, classes 
which are purchased in large volumes for Medicare and Medicaid. 
But I thought when in response to--and I should say it does not 
involve a formulary. It is no effort to try to deny a drug to 
any individual who happens to need that particular drug, but if 
we are going to improve quality, if we are going to have 
effective evidence-based medicine, if we are going to contain 
costs, it seems to me we need independent research not just 
research done by the pharmaceutical industry itself.
    In response, I think, Dr. Varmus, you made in response to 
Senator Clinton's question, you said, one of you said you 
thought you could do more in this field. A couple of questions. 
Would authorization from Congress explicitly help? And two, how 
would you envision going at particular classes of drugs in 
order to conduct such studies or to review such studies? You 
may be aware that Oregon has already started down this path and 
made some significant progress with 5 different classes.
    Mr. Zerhouni. In terms of authorization, as you know the 
AHRQ, that agency has the mandate to look at that. NIH does 
trials to advance discovery, to advance knowledge that will 
then form the basis from which CDC will base its prevention and 
public health strategies. AHRQ would then address these 
questions. We do not tend to do research that is designed 
primarily to support decisionmaking for policymakers in the 
reimbursement area, but we are very committed. I can tell you 
that all of us at NIH we want our discoveries to be translated 
and we want our discoveries to be affordable and accessible and 
effective to all Americans.
    The comment I was trying to make is to try to highlight for 
you a systemic issue which we agree with you is there and we 
are trying to address, and that is that with our current health 
care system, as fragmented as it is, with no uniformity of data 
standards, no real clinical information systems besides billing 
and getting a little bit of work flow done, you really cannot 
have a good view of what is happening on the ground in terms of 
usage of medication. We do not even have electronic 
prescribing. I mean we cannot even tell who received what when 
in terms of effectiveness.
    The problem with the current system is that if we just 
expanded the spectrum that we need to address, I can assure you 
that the budget of NIH will have to be quadrupled for us to do 
that. So we need a better system. I think any help we can get 
to get a more efficient information flow in terms of 
effectively, transmitting the clinical information. As you 
said, it needs to be available to the right person at the right 
time. That is the barrier, and I would like to really give it 
to Dr. Varmus. He has faced the same issues I am sure.
    Mr. Varmus. I definitely agree with what Dr. Zerhouni just 
said. I think it is important to keep in mind that improving 
our clinical research capabilities can help establish a network 
of investigators who can help pursue these questions, but I do 
think it is important to remember that the strength of the NIH 
has come from identifying important scientific issues and that 
NIH became an agency for vetting the comparative virtues of 
very similar drugs, for example, that it would actually not 
serve the country very well. It would be nice if there were 
ways to create incentives for drug companies to carry out some 
of these comparisons, but that may be difficult to envision.
    Mr. Allen. Thank you. My time has expired.
    Mr. Chairman, could I just ask that two articles focusing 
on the legislation that I have introduced be submitted for the 
record?
    Mr. Bilirakis. Without objection, that will be the case.
    Mr. Waxman to inquire?
    Mr. Waxman. Thank you very much, Mr. Chairman. Gentlemen, I 
appreciate your testimony. I have always supported NIH since I 
first was elected to Congress in 1974 and I want to make sure 
that the NIH's scientific mission is protected from political 
interference. I have a sense that there is more and more 
political interference. You cannot help but have that sense by 
just attending this hearing and hear the kinds of questions 
that are being asked of you, Dr. Zerhouni, about some grant 
application and some summary of a grant application. What has 
been raised is a question of political correctness. I do not 
want your decisions on research to be based on somebody else's 
view of political correctness. I think it ought to be based on 
the validity of the scientific research.
    In order to grant any of those projects, you have to have a 
scientific merit review system, and I think the one you have 
had is the best that has been developed. If Congress is going 
to come in and micromanage and make these decisions, I think 
that is very dangerous.
    I thought Mr. Shimkus put it well when he said he voted for 
the Toomey amendment because he thought he ought to let his 
ideology and political views dictate his vote, even though he 
did not like the idea of micromanaging NIH. If we follow that 
dictate, we are politicians. We have to face the voters. We do 
not want people voting on whether they think the title of an 
application before NIH sounds like it is a good idea.
    There is also a theme in the areas where there is an 
objection. It seems to be a theme based on sex and sexual 
research. It seems to me that sexuality and sexual 
relationships are a very important part of the lives of most 
adults and leads to all sorts of problems like with respect to 
the fact that Representative Rogers, who is an FBI agent, made 
the point that he wants this research--and has seen the benefit 
when he looks below what he is being told by some right-wing 
group that wants to discredit this kind of research.
    I am also, by the way, quite concerned about the 
limitations on the embryonic stem cell research. I do not see 
that any different than what is being pushed here at this 
hearing, and that is to have a chilling effect on research. 
Maybe it is not bad yet, but if you are having trouble, Dr. 
Zerhouni, in reaching the human capital to do this research, I 
think it is because researchers do not want to be in a 
situation where they are going to be gagged, where there is not 
going to be funding for it, that the rug may be pulled out from 
under them because a bunch of Congressmen or even a President 
may decide that because of some right-wing or left-wing 
pressure group that the research is not going to be acceptable 
even though it can lead to cures.
    Dr. Zerhouni, I want to raise a specific issue with you, 
and that is the Commission Corps of the U.S. Public Health 
Service, which employs 6,000 scientists and clinicians across 
dozens of Federal agencies including NIH. In July Secretary 
Thompson proposed major changes to the corps including new 
mandatory physical fitness standards, weight limits and other 
requirements. There is widespread concern those changes are 
going to drive talented senior scientists out of public 
service. Two weeks ago Representative Van Hollen and I released 
a letter from FDA Commissioner Mark McClellan in which he 
objected to many key elements of the proposal to restructure 
the Corps.
    I would be curious to know if you have seen that, Dr. 
McClellan's letter, if you agree with his concerns, and whether 
you have written a letter yourself to express similar concerns?
    Mr. Zerhouni. First of all let me say that the notion of 
transforming the Corps is something that we need to consider. 
How it is done is really the issue. And to be very direct in my 
responses to you, I think as you are trying to transform a 
Corps that contains officers who have been there 20 years, 25 
years, and then officers that have been there 2 years, and then 
impose a new requirement of deployment, it does present 
challenges. I have heard my Commission Corps officers come to 
me, come to Dr. Wyatt, who is my assistant for these issues, 
and express concerns in terms of their ability to stay in the 
Corps and their----
    Mr. Waxman. Have you passed on their concerns to 
Secretary----
    Mr. Zerhouni. I did.
    Mr. Waxman. You did. Would you be willing to share with us 
any correspondence you sent to him?
    Mr. Zerhouni. I will have to check with the Department, but 
if it is available, I will be happy to share it with you.
    Mr. Waxman. I am pleased that you have expressed concern 
because I know many people in the Corps feel this is an 
interference in the Corps itself and the job that it was set up 
to do.
    Mr. Zerhouni. Again, Congressman, I think the Secretary 
wants to accomplish a deployable Corps, which has some public 
health merit, and we need to look into. The issue is not the 
what. The issue is how you get there.
    Mr. Waxman. There is a widespread concern in the scientific 
community about political manipulation of NIH study panels and 
advisory committees, and I wanted to ask you specifically 
whether you believe it was appropriate for a potential 
appointee to the advisory committee to the National Institute 
on Drug Abuse to be asked whether he voted for President Bush, 
or whether it was right for a nominee to the Muscular Dystrophy 
Research Coordinating Committee to be asked her views on the 
President's stem cell policy, or whether you think it is 
appropriate for political officials at HHS to have any role in 
interviewing potential scientific appointees?
    Mr. Zerhouni. I became Director after this incident, but I 
can tell, I do not think there is any role for that sort of 
vetting for scientific advisory positions. My position is very 
clear. I have made it clear--and I am supported in that regard 
by Dr. Jack Marberger and the Secretary himself, and I have 
made sure since I took over that there is--if I hear of 
anything like this, obviously my position is very clear, is 
that scientific advisory positions should be based on 
competency, demonstrated competency.
    Mr. Waxman. Mr. Chairman, I just want to conclude by saying 
that all of these issues that I have raised--and I have not 
asked questions about them because of the limited amount of 
time to express my own views--I think that they represent 
political considerations that are interfering with NIH's 
mission, and if they are allowed to continue, NIH risks losing 
its reputation for scientific independence and excellence. We 
are going to lose good people, and we are going to lose out as 
a society on what those researchers could give to all of us and 
the future of this country.
    Mr. Bilirakis. I thank the gentleman. I suppose a better, 
more improved transparency would probably maybe give us the----
    Mr. Waxman. Well, if transparency means we are going to 
have things out there that are just going to be used to 
attack----
    Mr. Bilirakis. No. I am talking about letters of consent 
inquiring to find out why certain research is taking place. If 
there had been maybe responses, it would have delayed, if you 
will, what has taken place. In any case, I appreciate the 
gentleman yielding back.
    Ms. DeGette to inquire?
    Ms. DeGette. Thank you, Mr. Chairman. I would like to add 
my thanks to the panel for coming today.
    As the Co-Chair of the Diabetes Caucus in the House, I 
share Ms. Capps' and Mr. Waxman's concern about stem cell 
funding, and I would like to ask the panel some follow-up 
questions about that. Dr. Varmus, you were talking at the end 
of Ms. Capps' time about the researchers feeling chilled from 
making applications for NIH funding. I do not want to put words 
in your mouth, but I talked to a lot of researchers myself, and 
what they have told me is they are reluctant to file 
applications for research grants to the NIH because researchers 
at essence are not political and they do not want to get 
involved in a big political mess, and they also do not want to 
have to comply with a lot of the restrictions that the 
President's Executive Order, they feel, has put on their 
research. I wonder if you can comment on that.
    Mr. Varmus. Well, I do not think that investigators should 
feel shy about applying for research for which Federal funds 
are available. Indeed, as Dr. Zerhouni's comments reflect, 
there are over 50 investigators who have received funding and 
they are working effectively with cell lines that are available 
for funding.
    But as I pointed out, I am concerned that the narrow scope 
of research that is allowable is making young investigators who 
are choosing a field of investigation wary of entering a field 
in which the future is uncertain. There are limitations unless 
one has access to funds other than Federal funding, which does 
not happen in every institution. So I associate myself with 
part of your remarks, but I think that there is an area, there 
could have been none. Those of us who have been watching this 
very closely for a long time were relieved that the door was at 
least partially open and some NIH-supported work in this area 
can be conducted.
    Ms. DeGette. I know all three of you are supporters of stem 
cell research. Dr. Zerhouni, I want to commend you for the 
recent announcement this week about the three small grants for 
embryonic stem cell research. But I think we can all agree that 
embryonic stem cell research is in the early stages. Dr. 
Zerhouni, I believe you testified to that effect. I guess one 
concern I would have is with the tremendous potential of this 
research what is going to happen if, as I understand it, it 
looks like we maybe have 11 cell lines right now that are 
workable, and at some point it is going to become pretty clear 
that these cell lines are limiting to the research, they are 
either too old or they are not diverse enough. What is your 
thinking what we are going to do at that point? And this could 
happen quite rapidly.
    Mr. Zerhouni. We have 12 cell lines widely available. It is 
hard to predict. As you know, science goes by with 
unpredictable steps. At this point there is no clinical trial 
that is being proposed by any investigator. There is too much 
to be done to understand better these cells and how they 
behave, how they get differentiated, how do we prevent their 
multiplication? So I cannot predict----
    Ms. DeGette. But this research is proceeding apace, both in 
a limited way through the NIH, but also in a very dramatic 
abroad in other countries and by private organizations, is it 
not?
    Mr. Zerhouni. We have checked on that. I actually had a 
discussion with my colleague, Dr. Radda, in England 2 weeks 
ago, and asked him how many lines they have developed for 
research, and at this point they have not developed any, even 
though they have less restrictive----
    Ms. DeGette. But in fact, they are establishing a stem cell 
bank in Britain right now, are they not?
    Mr. Zerhouni. They are establishing a stem cell bank. There 
is no cell available from that bank at this point. They are 
working on the legislation that will do it. So the 
characterization to say that we are falling behind in drastic 
terms I do not think is factually correct.
    Ms. DeGette. That was not my question.
    Mr. Zerhouni. Sorry.
    Ms. DeGette. My question was: as we move forward with this 
research, if the NIH researchers determine that the existing 
cell lines, 11 or 12, whatever you want to say, are 
insufficient, what then will happen? Because it seems to me, 
just like Mr. Waxman, this limitation that has been made is a 
political limitation, not a scientific limitation.
    Mr. Zerhouni. That is correct. I think the decision is 
based on moral and ethical considerations of the President and 
we are basically under that policy, applying the policy to its 
largest extent possible. I do not know what may happen months 
from now and the discoveries that will be made, but I am 
looking forward to seeing those discoveries.
    Ms. DeGette. Dr. Varmus?
    Mr. Varmus. I think in that event we will become 
increasingly dependent upon institutions like the Howard Hughes 
Medical Institute, our own institution, and several others 
around the country that are investing their non-Federal 
resources in this area of research.
    Ms. DeGette. So the Federal Government will lose its 
leadership edge in that case.
    Mr. Varmus. The Federal Government, as you know, is the 
major source of academic funding, and I personally regret the 
idea that we will be having one segment of academic research 
conducted with non-Federal funds.
    Ms. DeGette. Thank you.
    Thank you, Mr. Chairman.
    Mr. Bilirakis. Ms. Tubbs-Jones is not a member of this 
committee, but she asked if she might sit in, and she has been 
very patient, one of the first people in the room. And we 
appreciate your interest and you are now recognized for 5 
minutes.
    Ms. Tubbs Jones. Mr. Chairman, thank you very, very much 
for the opportunity to be a part of this hearing this morning. 
Good morning to all the physicians, doctors.
    I am Stephanie Tubbs Jones. I represent the 11th 
Congressional District of Ohio, and I serve on the Ways and 
Means Committee. I have introduce a piece of legislation called 
the Uterine Fibroid Research and Education Act. It is also 
being sponsored in the Senate by Senator Barbara Mikulski.
    First of all I want to thank the chairman for giving me 
this opportunity to be here, and I want to thank his staff for 
supporting me. I also want to thank John Ford from the Energy 
and Commerce Committee staff. He has been a real rich guy 
helping me out, and I appreciate it, and my staff as well, 
Anthony and Sheshrina.
    I come concerned about uterine fibroid research. Of the $27 
billion that you have in your budget, only $5 million is being 
spent on uterine fibroid research. I have had the pleasure of 
meeting with Dr. Estelle Perette of the NICHD, Dr. Barbara 
Davies of the National--all these acronyms get me, but NIEHS; 
Dr. Vivian Penn of the Office of Research on Women's Health. 
They have told me some of the findings on uterine fibroids. 
What I have learned is that 20 to 25 percent of women of 
reproductive age have uterine fibroids and we have not figured 
out what causes uterine fibroids, and that 3 to 9 times--excuse 
me, let me say that again. That 3 to 9 times this condition 
occurs in African-American women. It is the highest cause of 
hysterectomy among both white women and African-American women. 
I would just encourage you, as you are looking at that issue, 
that you please pay attention to uterine fibroids.
    I would also say to you that it is so important that we 
look at health disparities. I associate myself with the 
comments of all of my colleagues who have spoken today, but as 
an African-American woman, it is so important that we focus in 
on health disparities. On Saturday of last week I had the 
opportunity to do a presentation with Dr. Wernie Reed of 
Cleveland State University. I had the Chairman of the National 
Institute of Cancer Research, and we did a piece on the Urban 
Cancer Project, which is a research piece funded by the NIH, 
looking at clinical research and why African-Americans tend not 
to participate in clinical research. And if we are going to do 
research in the area of disease affecting African Americans we 
have got to figure out how we bring them back into the fold.
    Finally, I will say, and then I am going to let you respond 
however you choose, that all politics ain't so bad, and the 
reason I say that is because I come here to Congress as a 
result of political stands that I take. Some of the research 
that has been done specific to African-Americans and minorities 
came as a result of the political push of the body politic to 
bring it to the top of the table. So I do not want you to be 
swayed by the issues of political life, but also I do not want 
you to be immune to the importance of the body politic saying 
to you, this is an issue that is important.
    Please, gentlemen, feel free to respond to any of the 
things I have said, but I ask you to pay close attention to the 
research that we do in the area as it affects minorities and 
African-Americans in particular.
    Mr. Zerhouni. I am going to ask my predecessor.
    Mr. Varmus. Let me just comment briefly about your comment 
about the political activism that led to increased interest in 
health disparities. I agree entirely with your point, but I 
would respond by saying, as someone who has been a strong 
supporter of research on health disparities, that there are 
facts, public health facts that represent the phases of the 
argument that have influenced the increased expenditure at NIH 
and indeed institutions like my own in New York to make greater 
investments in this area. It is clear that in a variety of 
areas, not just uterine fibroids, but cancer, heart disease, 
infectious illnesses and others, that people of lower economic 
status, people in the African-American and Hispanic-American 
communities do have higher rates of morbidity and mortality and 
we need to understand why that occurs. There are many possible 
explanations. This requires study.
    I work very closely with Harold Friedman, who has been a 
major proponent of the need to look in poor communities, and so 
I agree entirely. But that is the body politic bringing facts 
and figures to us, and it is an important role you play. Thank 
you.
    Mr. Shapiro. If I could just say a word. I know Dr. 
Zerhouni will want to answer. I think that scientists do not 
have a monopoly on understanding what the most important health 
concerns are. They are just one constituency which understands 
evolving health concerns. Other constituencies, as you pointed 
out, are yourself and your constituencies and so on, and it is 
entirely appropriate, in my judgment, that the health concerns 
of the public be a major factor considering what we should do. 
Only scientists can know what areas are open for investigation 
and we have to rely on that, but bringing these concerns 
forward is not only essential, it is a responsibility of you 
and your constituencies to help inform the Nation of what the 
real health concerns are.
    Mr. Zerhouni. I agree first of all about uterine fibroids. 
We are quite aware of the need for research there. I know there 
are efforts in that direction. NIEHS has a very interesting 
program in that regard. The causes of uterine fibroid 
developments are not well known. We need to understand that 
better.
    As I said in my statement, and I mentioned the evolving 
challenges that we are facing, health disparities remains a 
challenge. I think in many ways when you mention the body 
politic, I think it is reflected in the slide that is up there 
in the tryptic, and I put society at the bottom because it is 
the base upon which we work. So we are completely aware of 
that, provided that the debate is open, that the transparency 
that we are asking for is there, and that there is reasoned 
discussion of what it is that drives the need for investments.
    In the case of health disparities, I totally agree with 
you, there is a problem. The minority populations do not 
participate in trials, and NIH is trying to do what it can to 
change that. We have had one of the most successful heart 
studies called the Jackson Heart Study in Mississippi. We 
funded a national primary care center at Morehouse, which is 
connecting 136 community based organizations to be able to have 
that partnership. I think what happens is unless you have a 
partnership and a community of research, it is very hard to do 
the research. One of the tryptic of our roadmap is to try to 
build that new culture of having patients at the center of the 
research enterprise.
    Ms. Tubbs Jones. Thank you.
    Mr. Bilirakis. I thank the gentlelady.
    I want to thank Dr. Zerhouni for his flexibility, for his 
willingness to--we know about protocol and whatnot--but your 
willingness. If we had not allowed or suggested or asked your 
permission to go ahead and move the second panel in with you, 
we would just now be starting with the second panel.
    Mr. Zerhouni. I have to tell you that everything they said 
was music to my ears.
    Mr. Bilirakis. Also of course, thanks to Senator Gregg, his 
staff, all the Senate staff. They have been great hosts in 
allowing us to use this room.
    Again, I would repeat, we would like to have the authority 
to be able top submit questions to you and receive response 
from you in a timely fashion, but again, there are things which 
apparently we must do in order to give the Director the 
authority to accomplish the many things that we are talking 
about, so let us know what that is. Give us some suggestions so 
that we can sort of help you to help all of us.
    Thank you very much, gentlemen, for being here today and 
for so much good that you have done for all of us.
    Mr. Zerhouni. Thank you very much, Mr. Chairman.
    Mr. Varmus. Thank you.
    Mr. Shapiro. Thank you.
    Mr. Bilirakis. This hearing is adjourned.
    [Whereupon, at 12:28 p.m., the joint hearing was 
adjourned.]
    [Additional material submitted for the record follows:]

   Prepared Statement of Hon. Patrick J. Toomey, a Representative in 
                Congress from the State of Pennsylvania

    As Members of Congress, we are faced each day with visits to our 
offices by constituents impacted by the circumstances of life-
threatening illness affecting themselves, their family members, and, 
often times most tragically, their children. All of these constituents 
understand the stakes involved in finding cures for debilitative 
disease; without treatment their loved one will literally face a battle 
for life.
    All Members want to help. And we have helped already--over the past 
five years Congress has doubled the funding for the National Institute 
of Health.
    Our work has been a just, and overdue endeavor. However, our duties 
should extend beyond appropriations. Too often we relinquish our 
obligation to ensure responsible utilization of taxpayer dollars.
    On July 10, 2003, I offered an amendment to the Departments of 
Labor, Health and Human Services, and Education Appropriations Act of 
2004. My amendment was about simply doing just a little bit more for 
those families struggling with incurable illness. As any of these 
families will attest, every little bit counts.
    While the majority of the projects and grants directed by the NIH 
are productive and efficient, several seem lacking in merit.
    My amendment sought to reprogram grant money that the NIH has 
decided not to spend on researching life-threatening illnesses. This 
amendment would have prevented the NIH from funding four specific 
grants in Fiscal Year 2004 that are currently receiving funding.
    It is important to note that my amendment would not have reduced 
total appropriations to the NIH; again, it simply prevents the agency 
from funding a few specific projects.
    Four of the specified grants were:
    Grant Number RO3HDO39206: ``Study on Sexual Habits of Older Men.'' 
This study seeks to determine whether older men experience a decline in 
sexual behavior and if that decline is associated with sexual 
dissatisfaction, ``especially with behaviors (such as masturbation) 
that may be substituted for more rigorous activities.''
    Grant Number R01DA01386: ``Study on San Francisco's Asian 
Prostitutes/Masseuses.'' An excerpt from the grant abstract ``The 
proposed study will describe drug use and HIV-related behaviors among 
Asian female commercial sex workers at massage parlors.''
    Grant Number R01MH065871: Study on American Indian Transgender 
Research. This study aims to get a general understanding of the 
``American Indian and Alaskan Native lesbian, gay, bisexual, 
transgendered, and two-spirited individuals . . . who are a drastically 
understudied and underserved group.''
    Grant Number RO1HD043689: ``Mood Arousal and Sexual Risk Taking.'' 
An excerpt from the grant abstract: ``In a series of laboratory 
studies, mood and sexual arousal will be induced and their individual 
and combined effects on sexual risk taking will be examined.''
    I am not making this up. I could not make this up. These 
descriptions are taken directly from the NIH website and written by the 
researcher themselves. These grants are a ridiculous waste of taxpayers 
money and go to prove that if you propose something crazy enough, our 
Government just might fund it.
    Of greater insult, I recently learned that this last grant given to 
the Kinsey Institute on ``Mood Arousal,'' which is ongoing and slated 
to receive a total of $470,000, involves supplying participants with 
varying quantities of alcoholic beverages and then having them watch 
sexually explicit videos. In other words, the NIH has approved a grant 
to pay people to get drunk and watch pornography. Your constituents and 
all taxpayers will be shocked to learn that their money is going to 
grants like these.
    The combined value of these grants is roughly $1.5 million for FY 
2004, a small fraction of the total NIH budget. But these funds can 
represent a real contribution to the study of life-threatening 
diseases.
    If these grants did not raise an eyebrow with the peer-review 
groups who approved these grants, then I submit that something is wrong 
with our peer-review process. I submit there exists a disconnect 
between the grant making authorities at the NIH and the taxpayer.
    NIH spokesmen have publicly claimed that these grants research 
infertility and will lead to the development of abstinence curricula. 
However, the researchers themselves claim no such thing. My amendment 
does not subvert the process of peer-review, the process in these 
instances and perhaps others clearly has subverted itself.
    Moreover, it is within the clear purview of Congress, under the 
Constitution, to be the ultimate peer-review body. It should not be our 
goal to undermine the peer-review process of individual agency, but 
rather to uphold our responsibility to oversee all expenditures of 
taxpayer dollars. When money is going to study the sexual habits of 
older men or transgendered Native Americans versus trying to solve 
life-threatening diseases, Congress must step in.
    If there is support for researching these areas, then perhaps it 
should be funded independently, but not with taxpayer dollars. Studying 
the effects of pornography on people in different states of inebriation 
is not a priority of most Americans and should not get the benefit of 
taxpayer-funded research.
    The National Institute of Health should have higher priorities. 
Grants like these diminish the good reputation that the NIH enjoys.

                                 ______
                                 
    Prepared Statement of Jeffrey C. Martin, Chairman of the Board, 
                       Parkinson's Action Network

    I thank the House Committee on Energy and Commerce for inviting 
this statement on behalf of people with Parkinson's disease and the 
entire Parkinson's community. The topic of the Committee's hearing, 
Managing Biomedical Research to Prevent and Cure Disease in the 21st 
Century: Matching NIH Policy with Science, is of vital interest to 
people suffering from chronic diseases.
    There is much to praise about the National Institutes of Health 
(NIH). It is a very popular domestic program with the public. NIH has 
powered this country's remarkable success in basic biomedical research, 
such as new discoveries involving genetics, proteins, and cells. The 
current leadership of the NIH, moreover, recognizes that the public 
expects more than basic science from the tax dollars it provides to the 
NIH. The public wishes to earn a public health return on its public 
investment. This does not mean that the public health benefit must be 
immediate, but the research funded with public dollars should make 
sense as part of a plan to help either in the long-run or the short-run 
to understand, prevent, treat, or cure disease.
    This is where the grantmaking processes of the NIH warrant careful 
scrutiny and potential overhaul. The current system envisions science 
occurring primarily through a principal investigator in a laboratory at 
an academic health center supported by a four year grant and assorted 
postdoctoral students and equipment. But that paradigm, though quite 
useful regarding much of basic science, is ill-suited to the 
translation of basic science discoveries into actual treatments or 
therapies for people. Those gaps are not filled so much by hypothesis-
driven research at individual labs, but by pulling together experts and 
resources to solve particular problems in ways not typically done by 
academic researchers.
    These efforts, for example, may involve screening potential drugs 
against molecular libraries, systematically exploring the effects in 
various animal models, and then developing appropriate clinical trials.
    While NIH has a new emphasis on translational research under 
Director Zerhouni, the resources necessary to truly yield the payoff we 
are seeking have not yet been committed. For example, in the 
Parkinson's area, the first step in demonstrating a serious commitment 
to translational research would be to increase the staffing at NIH that 
is devoted to understanding and managing the existing portfolio of 
Parkinson's research. Currently, only part-time of one Program Director 
is dedicated to this. Unless you know how the currently funded NIH 
research is actually progressing and how it fits into the wider 
portfolio of Parkinson's research generally, one cannot intelligently 
try to fill the gaps to develop new therapies.
    Moreover, NIH should upgrade the position of Program Director by 
giving them real authority to pursue translational opportunities within 
a certain budget, while tying future funding of those projects to 
outcome measures.
    Once the gaps are identified, finding the money to fill those gaps 
runs into several obstacles. First, because most of the money 
appropriated by Congress each year is part of NIH's ``commitment base'' 
and dedicated to prior year grants, it is difficult to turn this large 
ship very quickly. Second, while there is, theoretically, the 
possibility of terminating unproductive grants or grants of peripheral 
importance to public health, it is rarely done. Third, the peer review 
processes at NIH are largely populated by academic bench researchers 
who tend to value basic science over the often more expensive 
translational and clinical research necessary to develop new 
treatments. Fourth, the review processes that an institute may employ, 
such as advisory councils, are once again populated largely by academic 
scientists who feel it is important to ``maintain the pay line'' in 
order to encourage bright students to devote their research careers to 
the particular field in question--which once again, diminishes the 
availability of resources for initiatives to target particular 
therapeutic or translational opportunities.
    The upshot of all this is that the more that one learns about NIH 
processes, the more one becomes convinced that some serious change is 
needed if the public confidence in the NIH to produce cures and 
treatments is going to be realized. Such a change involves staffing, 
peer review processes, and a fundamental culture change in academic 
medicine. But if we do not undertake to effect this difficult change, I 
fear that the public's confidence in NIH will be eroded, and the 
implicit social contract whereby we fund science with public dollars in 
order to produce a public benefit when possible, will be shredded.
    Medical research, of course, is important not only to people with 
chronic diseases and their families, but to everyone. We should not 
view the NIH dollars as committed to academic research for its own 
sake, but we should also be careful not to overmanage or overregulate 
scientists. NIH needs to be sophisticated enough to identify the key 
gaps and ask the important questions and then call on the creativity of 
the scientific community to supply the best answers. We should provide 
the resources to do this through increased appropriations, and if 
necessary, by reducing the commitment base through a serious review 
process regarding the productivity of existing multiyear grants. I urge 
the Congress to stay involved in this as the public's representative. 
This matter is too important to be left to the scientists alone. While 
this Congress has been appropriately reluctant to legislate dollars for 
diseases in an earmarked fashion, it should not be reluctant to ensure 
that the public dollars are being spent for public health purposes in 
an effective way.
    In addition to new processes of grantmaking and additional staff 
and resources, the NIH needs to exercise leadership and require 
grantees to share their data in a very prompt way with the NIH program 
directors, who can then use the information to redirect resources. The 
current system is much too glacial in pace because data is released 
only after publication, and publication is usually more than a year 
after discovery. Finally, NIH should also undertake appropriate 
development of public/private partnerships with both industry and the 
nonprofit community in order to leverage federal funds and maximize the 
effectiveness of the research dollars it spends.
    Earlier this week, Director Zerhouni announced the outlines of his 
Roadmap initiative. Some of the ideas are similar to these suggestions. 
But we have four questions we would pose. What resources are being 
committed? What human talent will lead these areas and what is their 
staff? Should not the Roadmap--which was part of the Administration's 
proposed FY04 budget for NIH--take into account the report language 
addressed to the NIH by Congress? And finally, is it all outcome 
oriented and directly connected to improving human health in the long 
or short run?
    In closing, let me say that NIH grantmaking might seem like a dry, 
bureaucratic topic and in some ways it is. But active oversight of this 
dry topic by this Congress may mean the difference for the development 
of cures and improved treatments for millions of Americans, and also 
may determine whether the rising cost of disease and disability as the 
Baby Boom generation ages takes the steam out of our economy. Thus I 
submit it is pretty interesting. I thank the Committees and look 
forward to working with the Committees and their staffs on this vitally 
important topic.

                                 ______
                                 
           Prepared Statement of the American Cancer Society

    On behalf of our millions of volunteers and supporters, the 
American Cancer Society is pleased to submit this statement for the 
hearing record.
    When Congress and President Nixon declared war against cancer in 
1971, cancer was largely a death sentence. Three decades later, our 
national research investment has reaped remarkable returns. Today, 
early detection can defeat some of the common cancers, such as cancer 
of the cervix, breast, colon and prostate, which represent more than 
half of all cancers. We now have strategies that can help prevent many 
cancers from occurring. And development of therapeutic agents such as 
Gleevec and Herceptin has shown that specific molecules in cancer cells 
can be effectively targeted when treating the disease.
    Thanks to these advances, cancer survivorship has now become part 
of our vernacular. Indeed, nine million Americans alive today have a 
history of cancer--this is twice the number of survivors compared to 30 
years ago.
    Despite this progress, cancer remains the number two killer in the 
United States. This year, 1.3 million Americans will be diagnosed with 
cancer and approximately 556,500 are expected to die--more than 1,500 
people a day. In addition to lives lost, the NIH estimates overall 
costs for cancer at $171.6 billion in 2002, including $60.9 billion in 
direct health expenditures.
    Without quick action, changing population demographics will make 
the situation worse. Cancer can strike at any age, but it is a disease 
that disproportionately affects the elderly. Nearly 60 percent of new 
cancer diagnoses and 70 percent of all cancer-related deaths occur in 
the 65 and older population. Indeed, cancer is the leading cause of 
death for Americans aged 60-79. As the Baby Boomers reach retirement 
age, we will see the number of Americans over age 65 double in the next 
30 years, translating to a dramatic increase in the number of new 
cancer cases. Moreover, medically underserved populations continue to 
bear a disproportionate cancer burden and research is required to 
address this health disparities gap.
    The American Cancer Society applauds the Senate Health, Education, 
Labor and Pensions Committee and the House Energy and Commerce 
Committee for holding this hearing to examine whether the National 
Institutes of Health (NIH) is prepared and organized to advance the 
fight against diseases like cancer in the 21st century.
    The following testimony highlights the importance of NIH research 
to the war against cancer and urges Congress to protect provisions of 
the National Cancer Act that provide the National Cancer Institute 
(NCI) with the necessary tools to continue the fight.

                INVESTING IN CANCER RESEARCH SAVES LIVES

    A strong Federal commitment to biomedical research and public 
health programs represents the nation's best defense against cancer and 
provides hope of survival to the over 1.3 million Americans who will be 
diagnosed with cancer this year.
    We are grateful to Congress and the Administration for the 
extraordinary leadership shown in doubling the NIH budget over the past 
five years. Research conducted at the NIH, including NCI and the 
National Center on Minority Health and Health Disparities (NCMHD) holds 
the key to taking our progress against cancer to the next level.
    We have learned that cancer is complex, representing more than 100 
different diseases. We are at a critical point in time during which we 
must not only maintain our current momentum, but also push forward with 
new research to bring the next breakthroughs to cancer patients. The 
development of molecularly-targeted drugs, such as Gleevec, that attack 
only cancer cells while leaving healthy tissue alone is one example of 
the remarkable advances the public investment in NIH has generated. 
Other major advances include:

 Promising results from research that may lead to a vaccine targeting 
        pancreatic cancer, which remains one of the deadlier cancers. 
        Currently, approximately 95 percent of those diagnosed die 
        within 15 months.
 As a result of a host of new drugs for the treatment of childhood 
        leukemia, the cure rate has reached 80 percent.
 A national investment of $56 million in testicular cancer research 
        has enabled a 91% cure rate and a savings of $166 million 
        annually.
 Development of tools to detect cancers earlier, when they are more 
        localized and therefore more successfully treated. For example,
     Colon cancer screening tests have led to a 90 percent five-year 
            survival rate for colon cancers when they are caught in 
            their earliest, localized stages and 64 percent when the 
            cancer has spread only to adjacent organs or lymph nodes. 
            Once the cancer has spread to other parts of the body, the 
            five-year survival rate drops to just eight percent.
     The development of a simple and inexpensive blood test to help 
            detect prostate cancer at an early stage. In the past five 
            years, annual prostate cancer deaths have been reduced by 
            28%.
     Progress in early detection and treatment of breast cancer has 
            resulted in decreasing mortality rates, with more than 90% 
            of breast cancers now diagnosed at localized or regional 
            stages. This translates to a five-year survival rate of 97% 
            for localized breast cancer and 79% for regional breast 
            cancers.
    Perhaps most significant, cancer mortality rates have declined by 
57 percent since the early 1970s as a direct result of our national 
cancer research investment. This year's Annual Report to the Nation on 
the Status of Cancer, 1975-2000, shows that death rates from the four 
leading cancers--lung, breast, prostate and colorectal--declined 
nationally and in most states during the 1990s. Despite these promising 
trends, our work is far from over. Research is required to develop 
early detection and treatment tools for rarer forms of cancer that 
remain deadly. More work also needs to be done on the most common 
cancers. For example, few treatments are currently available to those 
with advanced lung cancer. In addition to breakthroughs in the area of 
cancer, federally funded research at the NIH has provided a lifeline to 
numerous patients suffering from a range of diseases.
    The American Cancer Society urges Congress to maintain its strong 
commitment to funding biomedical research. Last year, NIH leadership 
testified that current scientific opportunities lend themselves to an 
increase in the range of 8-10 percent. For Fiscal Year 2004, the 
American Cancer Society has recommended an 8.5 percent increase for 
NIH.

   PROTECTING THE NATIONAL CANCER ACT IS CRITICAL TO THE WAR AGAINST 
                                 CANCER

    At the request of Congress, the Institute of Medicine (IOM) 
recently released a report--Ehancing the Vitality of the National 
Institutes of Health: Organizational Change to Meet New Challenges--
regarding the structure and operation of the NIH. Of the many 
recommendations included in the report, the American Cancer Society 
would like to call attention to a specific recommendation regarding the 
National Cancer Institute (NCI).
    The IOM report encourages Congress to re-examine several of the 
provisions of the National Cancer Act of 1971--the driving force behind 
the recent progress made in the fight against cancer. Of particular 
concern is the recommendation that Congress reconsider a provision of 
the National Cancer Act that provides the Director of the National 
Cancer Institute with authority to prepare and submit an annual cancer 
research budget directly to the President of the United States.
    The NCI budget outlines promising areas of research that--if 
pursued--offer the best hope for enhancing and expanding cancer 
prevention and early detection, developing better cancer treatments, 
improving quality of life for people living with cancer, addressing 
survivorship issues and reducing health disparities in cancer with the 
ultimate goal of eliminating them. The budget is developed in a public 
process and reflects the best thinking of cancer researchers, patients, 
clinicians and other constituency groups.
    The 92nd Congress showed extraordinary vision and leadership in 
establishing the structure and charge of the National Cancer Institute 
and recognizing that research could go from a good bet to a sure bet. 
President Nixon agreed:
        . . . it is important that this program be identified as one of 
        our highest priorities, and that its potential for relieving 
        human suffering not be compromised by the familiar dangers of 
        bureaucracy and redtape. For this reason, I am asking the 
        Congress to give the Cancer-Cure Program independent budgetary 
        status and to make its Director responsible directly to the 
        President. This effort needs the full weight and support of the 
        Presidency to see to it that it moves toward its goal as 
        expeditiously as possible. (Statement by President Nixon on the 
        National Cancer Act, May 11, 1971)
    After three decades of progress, it would be shortsighted for 
Congress to strip the NCI of its ability to develop a public, strategic 
research plan and budget that reflects the advice of thought leaders in 
the cancer community.
    The NCI budget represents our national battle plan against cancer. 
It provides the blueprint for future progress, clearly outlining 
extraordinary research opportunities and providing a detailed budget 
showing how taxpayer dollars will be used. In fact, the IOM report 
recognized the value of these aspects of the NCI budget:
        . . . the requirement that the NCI prepare a bypass budget 
        every year has some positive aspects in that the institute must 
        undertake an annual strategic planning process. This useful 
        exercise should not be dropped if NCI changes its 
        administrative status as recommended above. Rather, all ICs 
        [Institutes and Centers] should be required to develop an 
        annual strategic plan, if they are not already doing so. (IOM 
        Report, Page 89)
    The American Cancer Society also urges Congress to protect the 
other provisions of the National Cancer Act of 1971, including:

 Broad authority of the Director of the National Cancer Institute, a 
        Presidential appointee, to implement the nation's cancer 
        research agenda.
 Establishment of a National Cancer Board, whose 18 scientific and lay 
        members advise the President on major initiatives in the war 
        against cancer.
 Creation of the President's Cancer Panel, a three-member panel of 
        experts, including a consumer, who independently appraise the 
        progress of the national cancer program and submit an annual 
        report to the President.
    The National Cancer Act is a critical component in America's war 
against cancer. The reasons for its enactment over 30 years ago remain 
true today, and the American Cancer Society urges Congress to protect 
this vital legislation. Since its enactment, cancer survival rates have 
increased from 25 percent in the 1970s to more than 60 percent today, 
and the quality of life for cancer patients has dramatically improved. 
With its current structure and charge, NCI has a proven track record of 
success. The fight against cancer has come too far to turn back the 
clock.
    The American Cancer Society is dedicated to eliminating cancer as a 
major health problem by saving lives, diminishing suffering and 
preventing cancer through research, education, advocacy and service. 
Founded in 1913 and with national headquarters in Atlanta, the Society 
has 15 regional Divisions and local offices in 3,400 communities, 
involving millions of volunteers across the United States. For more 
information anytime, call toll free 1-800-ACS-2345 or visit 
www.cancer.org.

                                 ______
                                 
         Prepared Statement of the National Academy of Science

 THE NATIONAL ACADEMY OF SCIENCES CHALLENGES THE ``SPECIAL STATUS'' OF 
                     THE NATIONAL CANCER INSTITUTE

    On October 2, a recent National Academy of Sciences (NAS) study on 
the National Institutes of Health (NIH) will be the subject of 
bicameral hearings by the House Energy and Commerce Committee, and the 
Senate Health, Education, Labor and Pensions Committee.
    The NAS study, requested by Congress, stressed the need to re-
examine the ``special status granted the National Cancer Institute 
(NCI) by the 1971 National Cancer Act.'' The Act authorized the 
President to appoint the director of NCI and control its budget, thus 
bypassing the authority of the overall director of all other 26 
National Institutes of Health (NIH) and Centers. As a result of this 
anomaly, NCI's current $4.6 billion budget, 17% of the NIH, is beyond 
control of NIH's director.
    The NAS expressed further concerns that NCI's ``special status'' 
could cause ``an unnecessary rift between (its) goals and mission, and 
the leadership of NIH.'' As seriously, NCI's independence has led to 
its virtual isolation from the public health and general scientific 
communities.
    Beyond the immediate scope of the NAS study, NCI's ``special 
status'' has resulted in generally unrecognized problems, which are 
largely responsible for failure of the National Cancer Program. These 
include:

 Contrary to NCI's misleading claims and assurances, overall cancer 
        incidence rates, and those of a wide range of non-smoking 
        cancers, have escalated over recent decades, while overall 
        mortality rates have remained high and unchanged. (FACT SHEET 
        I)
 The leadership of NCI, and its major Centers, is marred by pervasive 
        conflicts of interest, and a revolving door with industry, 
        particularly the cancer drug industry. (FACT SHEET II)
 NCI policies are fixated on damage control--screening, diagnosis, and 
        chemoprevention (``secondary prevention''), treatment and 
        related research--with minimal priorities for prevention. (FACT 
        SHEET III)
 Contrary to the 1971 Act's requirements, the NCI has failed to inform 
        the public of a wide range of avoidable causes of cancer. This 
        denial of the public's right to know has even extended to the 
        suppression of such information. (FACT SHEET IV)
 Since 1998, and in close collaboration with the American Cancer 
        Society (ACS), the National Cancer Program is being 
        surreptitiously privatized. (FACT SHEET V)

                              FACT SHEET I

        EXAGGERATED CLAIMS OF PROGRESS IN THE WAR AGAINST CANCER

    For over the last two decades, the NCI has made a series of highly 
publicized and misleading claims of major advances in the ``War Against 
Cancer.'' These include:

 NCI's 1984 announcement, in its ``Cancer Prevention Awareness 
        Program,'' that cancer mortality would be halved by 2000.
 The same assurance in NCI's 1986 ``Cancer Control Objectives'' 
        report.
 The 1998 NCI and American Cancer Society (ACS) ``Report Card'' 
        announcing a recent reversal of an almost 20-year trend of 
        increasing cancer incidence and deaths.
 The February 2003 incredulous ``pledge'' by NCI director Andrew von 
        Eschenbach, former ACS President-elect, to ``eliminate the 
        suffering and death from cancer by 2015.''
    In a September, 2003 ``Annual Report to the Nation on the Status of 
Cancer, 1975-2000,'' the NCI, ACS, and the Centers for Disease Control 
and Prevention claimed that ``considerable progress has been made in 
reducing the burden of cancer.'' However, this claim is inconsistent 
with NCI's own data, as detailed in its SEER Cancer Statistics Review, 
1975-2000:

 From 1975-2000, overall cancer incidence rates have increased by 18%; 
        rates for Blacks have increased by 20%.
 From 1975-2000, there has been a dramatic increase in the incidence 
        rates of a wide range of non-smoking cancers. These include: 
        non-Hodgkin's lymphoma (71%); thyroid (54%); testes (54%); 
        breast cancer (29%); acute myeloid leukemia (15%); and brain 
        (14%). These increases have more than offset the decline in 
        lung cancer rates due to decreased smoking in men.
 From 1975-2000, childhood cancer incidence rates have increased as 
        follows: acute lymphocytic leukemia (59%); brain (48%); kidney 
        (43%); and bone (20%).
 From 1996-2000, the period which the Report emphasizes in its claim 
        of ``considerable progress,'' there have been major increases 
        in the incidence rates of the following cancers: thyroid (16%); 
        acute myeloid leukemia (11%); childhood brain (10%); and testes 
        (10%).
 From 1975-2000, overall cancer mortality rates have remained high and 
        unchanged, 199/100,000; rates for Blacks have increased by 6%.
 From 1975-2000, mortality rates from prostate cancer, one of the 
        major cancer killers, have decreased by only 1%.
 From 1975-2000, mortality rates have increased by 46% for non-
        Hodgkin's lymphoma, and 10% for brain cancer.
    These increasing incidence and static overall mortality rates are 
in striking contrast to the 30-fold escalation of NCI's budget, from 
$220 million in 1971 to the current $4.6 billion.

                             FACT SHEET II

        CONFLICTS OF INTEREST AND A REVOLVING DOOR WITH INDUSTRY

    Benno C. Schmidt, the first chairman of President Nixon's NCI 
three-member Executive Cancer Panel, was an investment banker and 
senior drug company executive, with close ties to oil, steel, and 
chemical industries. He was followed in the 1980's by Armand Hammer, 
the late oil magnate, and Chairman of Occidental Petroleum, one of the 
nation's largest manufacturers of industrial chemicals, with major 
responsibility for the Love Canal disaster. Schmidt and Hammer showed 
no interest in cancer prevention. Instead, they focused on the highly 
profitable development and marketing of cancer drugs.
    The late Dr. Frank Rauscher, appointed NCI director by President 
Nixon in 1971 to spearhead his ``War on Cancer,'' resigned in 1976 to 
become Senior Vice President of the American Cancer Society (ACS). In 
1988, he moved on to become Executive Director of the Thermal 
Insulation Manufacturers Association, which promotes the use of 
carcinogenic fiberglass, and fights against its regulation.
    A 1993 analysis of conflicts of interest by board members of NCI's 
Memorial Sloan-Kettering Comprehensive Cancer Center revealed extensive 
ties to cancer drug companies, and oil, steel, fiberglass, and tobacco 
industries, apart from $4 million institutional holdings in drug 
companies.
    Dr. Samuel Broder, NCI director from 1989 to 1995, frankly admitted 
the reality in a 1998 Washington Post interview. ``The NCI has become 
what amounts to a government pharmaceutical company.'' Taxpayers have 
funded R & D, and expensive clinical trials for over two-thirds of 
cancer drugs on the market. These drugs are then given, with exclusive 
rights, to the industry, which sells them at inflated prices. Broder 
resigned from the NCI to become Chief Scientific Officer of Ivax, and 
later Chief Medical Officer of Celera Genomics, both are major 
manufacturers of cancer drugs.
    Dr. Vincent DeVita, NCI director from 1980 to 1988, and Dr. John 
Mendelsohn, President of NCI's University of Texas MD Anderson 
Comprehensive Cancer Center, were both consultants and board members of 
ImClone Systems, Inc., which had been seeking FDA approval of its 
targeted cancer drug, Erbitux. Neither DeVita nor Mendelsohn disclosed 
these interests in media interviews promoting targeted cancer drugs.
    In October 2002, DeVita published an article, ``The War on 
Cancer,'' in The Cancer Journal, of which he is co-editor, claiming 
major progress in cancer drug treatment. However, he failed to disclose 
his commercial interests in targeted drugs, and in his CancerSource.com 
web site. This is contrary to the Journal's disclaimer: ``No benefits 
in any form have been or will be received'' by any authors. The Journal 
has failed to respond to a request to publish evidence of this 
conflict.

                             FACT SHEET III

                      NCI'S IMBALANCED PRIORITIES

    The research policies and priorities of the NCI remain dominated by 
professional mindsets fixated on damage control--screening, diagnosis, 
chemoprevention, treatment--and treatment-related research. High 
priority for screening persists in spite of long-standing challenges as 
to its questionable effectiveness for cancers such as prostate, lung, 
pre-menopausal breast, and childhood neuroblastoma. Minimal emphasis, 
and even indifference, remains directed to the prevention of a wide 
range of avoidable causes of cancer, other than lifestyle factors, 
smoking, inactivity, and fatty diet, without consideration of 
carcinogenic contaminants.
    In sharp contrast to predominant expenditures on treatment, NCI's 
prevention budget has been and remains minimal. A published, and 
unchallenged, analysis of its 1992 budget revealed that less than 2.5% 
of a $2 billion budget, in contrast to a claimed 20%, was allocated to 
research on avoidable carcinogens in air, water, food, the home, and 
the workplace.
    In May 1998 exchanges between Congressman David Obey (D-WI) and 
former NCI Director Klausner, he claimed that 20 percent of NCI's $2.5 
billion budget was allocated to research on environmental causes of 
cancer. Following Obey's request for further information, Klausner 
failed to respond, other than increasing his 20 percent estimate to 40 
percent.
    NCI's limited comprehension of prevention is revealed in the 
``Highlights'' of its 2001 Cancer Facts. The opening sentence states: 
``Cancer prevention is a major component and current priority--to 
reduce suffering and death from cancer.'' This was followed by the 
claim that 12 percent of NCI's $3.75 billion budget is allocated to 
prevention. However, this was defined in exclusionary terms of tobacco 
and faulty diet, without any reference to environmental and 
occupational carcinogens.
    Not surprisingly, in February 2003 Congressman John Conyers (D-MI), 
Ranking Member of the House Judiciary Committee, warned that so much 
cancer carnage is preventable. ``Preventable that is, if the NCI gets 
off the dime and does its job.''
    In view of NCI's exaggerated and inconsistent claims for its 
prevention budget, Congresswoman Jan Schakowsky (D-IL), in February, 
2003 requested the General Accounting Office (GAO) to investigate NCI's 
``fight against cancer.'' Specifically, she requested the following 
budgetary information:
    ``1. Funding for Research on Prevention: For programs whose primary 
objective is focused on prevention, rather than research in which 
prevention is incidental to other primary objectives.
    ``2. Funding for Outreach: Providing the public, and also Congress 
and regulatory agencies, with a scientifically documented comprehensive 
registry of avoidable causes of cancer, and avoidable exposures to 
carcinogens in: air, water, the workplace, and consumer products (food, 
cosmetics and toiletries, and household products); prescription drugs; 
and diagnostic radiation.''
    GAO's response is pending.

                             FACT SHEET IV

       FAILURE TO INFORM THE PUBLIC OF AVOIDABLE RISKS OF CANCER

    With the exception of smoking and faulty diet, the NCI has failed 
to inform the public of a wide range of avoidable causes of a wide 
range of cancers, particularly from involuntary and unknowing exposures 
to chemical and radioactive industrial carcinogens. These fall into 
three major categories: (1) environmental contaminants in air, water, 
soil, the workplace, and food; (2) carcinogenic ingredients in consumer 
products, particularly pesticides; (3) carcinogenic prescription drugs 
and high-dose diagnostic medical radiation, particularly pediatric CAT 
scans.
    As critically, NCI has failed to inform Congress and regulatory 
agencies of such avoidable exposures to industrial and other 
carcinogens, incriminated in standard rodent tests and in 
epidemiological studies; such information could have enabled the 
development of corrective legislative and regulatory action. This 
silence has also encouraged petrochemical and other industries to 
continue manufacturing carcinogenic products, and corporate polluters 
to continue polluting unchallenged.
    NCI's silence on cancer prevention is in flagrant violation of the 
1971 National Cancer Act's specific charge ``to disseminate cancer 
information to the public.'' This silence is in further violation of 
the 1988 Amendments to the National Cancer Program (Title 42, Sec. 
285A), which call for ``an expanded and intensified research program 
for the prevention of cancer caused by occupational or environmental 
exposure to carcinogens.''
    In May 1998, Congressman David Obey addressed the following 
question to NCI director Dr. Richard Klausner. ``Should NCI develop a 
registry of avoidable carcinogens and make this information widely 
available to the public?'' Dr. Klausner responded, ``Such information 
is already available from NCI's Cancer Information Service.'' However, 
there is no basis whatsoever to support this claim.
    NCI's silence on avoidable causes of cancer has even extended to 
suppression or denial of such information, as illustrated by the 
following examples.
    In 1983, the Department of Health and Human Services directed NCI 
to investigate the risks of thyroid cancer from I-131 radioactive 
fallout following atom bomb tests in Nevada in the late 1950's and 
early 1960's. NCI released it report in 1997, based on data which had 
been available for over 14 years, predicting up to 210,000 thyroid 
cancers from radioactive fallout. These cancers, whose incidence has 
almost doubled since 1973, could have been readily prevented had the 
NCI warned the public in time, and advised them to take thyroid 
medication. At a September 1999 hearing by the Senate Subcommittee of 
the Committee on Government Affairs, former Senator John Glenn (D-OH) 
charged that the NCI investigation was ``plagued by lack of public 
participation and openness.'' Senator Tom Harkin (D-IA) charged that 
NCI's conduct was a ``travesty.''
    As serious is NCI's frank suppression of information. At a 1996 San 
Francisco ``Town Hall Meeting'' on breast cancer, chaired by 
Congresswoman Nancy Pelosi (D-CA), former NCI director Richard Klausner 
insisted that ``low level diagnostic radiation does not demonstrate an 
increased risk.'' However, this was contrary to NCI's long-term studies 
on patients with spinal curvature (scoliosis), which showed that such 
radiation was responsible for 70 percent excess breast cancer 
mortality.

                              FACT SHEET V

              PRIVATIZATION OF THE NATIONAL CANCER PROGRAM

    In 1998, ACS created and funded the National Dialogue on Cancer 
(NDC), co-chaired by former President George Bush, and Barbara Bush. 
Included were a wide range of cancer survivor groups, some 100 
representatives of the cancer drug industry, and Shandwick 
International PR, whose major clients include R.J. Reynolds Tobacco 
Holdings.
    Without informing NDC's participants, and behind closed doors, ACS 
then spun off a small Legislative Committee. Its explicit objective was 
to advise Congress on the need to replace the 1971 National Cancer Act 
with a new National Cancer Control Act, which would shift major control 
of cancer policy from the NCI to the ACS. The proposed Act would also 
increase NCI funding from this year's $4.6 billion to $14 billion by 
2007. The ACS was assisted by Shandwick in drafting the new Act, 
besides managing the NDC.
    However, with the February 2002 appointment of ACS President-Elect 
von Eschenbach as NCI director, the National Cancer Program has been 
effectively privatized. As a condition of his appointment, von 
Eschenbach obtained President Bush's agreement to continue as Vice-
Chairman of NDC's Board of Directors, a position he has held since 1998 
as a key founder of the Dialogue.
    Subsequent to von Eschenbach's appointment, NDC was spun off into a 
non-profit organization. NDC then hired Edelman, another tobacco PR 
firm, following a pledge that it would sever its relations with the 
industry. Edelman still represents the Brown & Williamson Tobacco 
Company, and The Altria Group, the parent company of Philip Morris, the 
nation's biggest cigarette maker; Edelman also represents Kraft and 
other fast food and beverage companies now targeted by anti-obesity 
litigation. Edelman is also a Board member of the Centers for Disease 
Control and Prevention Foundation, which fosters relations between the 
Centers, ACS, and the NCI. Edelman has thus become firmly embedded in 
national cancer policy making.
    In July 2003, it was discovered that Edelman had reneged on its 
pledge, and was continuing to fight tobacco control programs from its 
overseas offices. Attempting damage control, Edelman claimed that this 
was just an oversight. Once more, it agreed to terminate tobacco 
support programs, and to donate this income to charity.
    As disturbing is the growing secretive collaboration between the 
NCI and the ACS-NDC complex, as revealed in the August 2003 Cancer 
Letter. The latest example is the planned privatization of cancer drug 
clinical trials, and the creation of a massive tumor tissue bank. This 
would cost between $500 million and $1.2 billion to operate, apart from 
construction costs in the billions. This initiative would be 
privatized, ripe with conflicts of interest, exempt from the provisions 
of the Federal Advisory Committee Act and the Freedom of Information 
Act, and free from federal technology transfer regulations.

    Samuel S. Epstein, M.D., professor emeritus Environmental & 
Occupational Medicine, University of Illinois at Chicago School of 
Public Health; Chairman, Cancer Prevention Coalition.
    Nicholas A. Ashford, Ph.D., J.D., Professor of Technology and 
Policy, Massachusetts Institute of Technology.
    Quentin D. Young, M.D., Chairman of the Health & Medicine Policy 
Research Group; past President of the American Public Health 
Association.
    For supportive documentation, see the Cancer Prevention Coalition's 
February 2003 report, ``The Stop Cancer Before It Starts Campaign,'' 
endorsed by some 100 leading experts in cancer prevention and public 
policy, and representatives of consumer and environmental groups. See 
www.preventcancer.com.

                                 ______
                                 
   Follow-up Questions and Responses Submitted for the Record of Dr. 
                             Harold Varmus

         QUESTIONS SUBMITTED BY CHAIRMAN W.J. ``BILLY'' TAUZIN

    Question 1. With direct control of only 2 percent of the total NIH 
budget, in your opinion, does the NIH Director really control the 
research agenda of the agency?
    Response. No. The Director has some influence over programs and 
budget and can provide leadership, but his/her authority should be 
increased by enlarging the Director's budget and staff. It would be a 
mistake, however, to cede most of the authority for program development 
to the Director; most of it should continue to reside in the Institutes 
and Centers. The Director should have greater authorities for 
developing novel, trans-Institute programs.
    Question 2. In a recent article you admitted, ``By the time I was 
through being director, I was becoming increasingly jealous that the 
institute directors were really running the scientific programs.'' 
(Washington Fax, September 18, 2003). In your testimony, your top 
recommendation is to expand the authority of the NIH Director. How will 
this improve the operation of what you have referred to as a ``highly 
balkanized scientific enterprise?''
    Response. It will allow the Director to achieve greater 
coordination among the Institutes and Centers and to initiate novel, 
trans-IC research programs--for example, like those described in Dr. 
Zerhouni's Road Map.
    Question 3. The Public Health Service Act already provides the NIH 
Director with the authority to consolidate or expand institutes and 
centers at the NIH. In your personal opinion, why do you believe this 
authority has never been fully utilized?
    Response. I would need to reread the Act to understand these 
authorities fully; I doubt whether an NIH Director could truly 
consolidate (as opposed to increase collaboration among) Institutes and 
Centers. Certainly strong pressure from Members of Congress and 
disease-based advocacy groups would (appropriately) restrain such major 
actions by the NIH Director without full evaluation by the legislative 
and executive branches.
    Question 4. You have advocated in the past for what some term 
``drastic'' consolidation of the institutes and centers at NIH. Of 
course, another could term this effort ``efficient management and 
operation'' of the most important public health agency. I notice that 
``cancer'' remains one of the disease areas you highlight. Why?
    Response. Cancer is highlighted because it is a large group of 
diseases that affects half of our citizens over their lifetimes; 
furthermore, about 20% of the NIH budget resides in the NCI, so it 
seems convenient to leave the NCI intact when attempting a 
reorganization that creates about five Institutes of roughly equal 
size. As my testimony makes clear, I do not support special privileges 
for the NCI (as are currently conferred by the National Cancer Act of 
1971).
    Question 5. Your written testimony discusses the concept of 
``clusters'' of institute and center research collaboration. What are 
the emerging scientific opportunities that would benefit from this form 
of structured research?
    Response. Many of these are based on use of sequences for the human 
and other genomes; on new technologies (for imaging, gene expression, 
analysis of mutants, and chemistry) that apply to many scientific 
problems; on clinical research and training programs; and on 
computational methods that are increasingly used in all areas of 
science. Many of these opportunities are described in the new NIH Road 
Map.

                 QUESTIONS SUBMITTED BY SENATOR DEWINE

    Question 1. The reorganization of NIH--both in the Secretary's 
Roadmap and the NAS study--focuses on the restructuring and reshaping 
of centers and programs. Please explain how this reorganization will 
benefit specific areas of research--such as pediatric research? I would 
appreciate learning of specific examples.
    Response. It would improve coordination among Institutes and 
Centers with common interests, allowing them to pool resources to carry 
out expensive programs that might otherwise be difficult for any single 
IC to undertake. For example, research requiring clinical studies (in 
pediatrics or many other fields) would become more feasible as 
illustrated in the NIH Road Map.
    Question 2. The Pediatric Research Initiative, which my colleagues 
and I plan to reauthorize next year, is currently housed in the Office 
of the Director of NIH. Is this the best place for the initiative or is 
it better suited in another NIH institute?
    Response. Because pediatric disease is addressed by virtually every 
IC, the initiative is best housed in the OD/NIH. However, the OD needs 
greater authority, funds, and scientific expertise to best administer 
the initiative. Individual components of the initiative should 
ultimately be assigned to individual ICs or clusters of ICs for long 
term support.
    Question 3. Increasing pediatric research is a priority of mine. I 
think the practice of pediatric research should be elevated and 
encouraged among young doctors and physician researchers. What can be 
done to enhance the quality and quantity of pediatric research?
    Response. The most important avenue is the training of 
pediatricians in clinical and laboratory research through K08 and K23, 
K24, and K30 awards.
    Question 4. How will the re-organization facilitate furthering 
translational and basic research into diseases with a genetic basis 
that have become increasingly important in pediatric care and in 
determining predictors of diseases with onset in childhood that become 
major health issues in adults?
    Response. The reorganization I have proposed (IC clustering and 
enhanced authorities for the NIH Director) will make the goals of the 
NIH Road Map easier to achieve; these include expansion of clinical 
research and training, as well as computational infrastructure that is 
essential for genome-based and genetic research and for long-term 
clinical research (e.g. to identify pediatric findings as harbingers of 
adult disease).
    Question 5. How does the re-organization address the increasing 
need for complex and state-of-the-art core services that empower and 
facilitate individual research programs?
    Response. The reorganization I have proposed (IC clustering and 
enhanced authorities for the NIH Director) will make the goals of the 
NIH Road Map more achievable, and these goals include improved 
infrastructure, technical tools, and training.
    Question 6. The practical benefit of pediatric research is vital to 
the lives of many American children. How will the NIH reorganization 
ensure that new discoveries and updates to pediatric research findings 
will be more quickly disseminated to the field?
    Response. The reorganization itself will not ensure greater 
dissemination of findings. For this, the NIH needs to be committed to 
expanding its digital public library of scientific reports (e.g. 
PubMedCentral at the NLM) and to encouraging open access publications.

[GRAPHIC] [TIFF OMITTED] T9964.139

[GRAPHIC] [TIFF OMITTED] T9964.140

[GRAPHIC] [TIFF OMITTED] T9964.141

[GRAPHIC] [TIFF OMITTED] T9964.142

[GRAPHIC] [TIFF OMITTED] T9964.143

[GRAPHIC] [TIFF OMITTED] T9964.144

[GRAPHIC] [TIFF OMITTED] T9964.145

[GRAPHIC] [TIFF OMITTED] T9964.146

[GRAPHIC] [TIFF OMITTED] T9964.147

[GRAPHIC] [TIFF OMITTED] T9964.148

[GRAPHIC] [TIFF OMITTED] T9964.149

[GRAPHIC] [TIFF OMITTED] T9964.150

[GRAPHIC] [TIFF OMITTED] T9964.151

[GRAPHIC] [TIFF OMITTED] T9964.152

[GRAPHIC] [TIFF OMITTED] T9964.153

[GRAPHIC] [TIFF OMITTED] T9964.154

[GRAPHIC] [TIFF OMITTED] T9964.155

[GRAPHIC] [TIFF OMITTED] T9964.156

[GRAPHIC] [TIFF OMITTED] T9964.157

[GRAPHIC] [TIFF OMITTED] T9964.158

[GRAPHIC] [TIFF OMITTED] T9964.159

[GRAPHIC] [TIFF OMITTED] T9964.160

[GRAPHIC] [TIFF OMITTED] T9964.161

[GRAPHIC] [TIFF OMITTED] T9964.162

[GRAPHIC] [TIFF OMITTED] T9964.163

[GRAPHIC] [TIFF OMITTED] T9964.164

[GRAPHIC] [TIFF OMITTED] T9964.165

[GRAPHIC] [TIFF OMITTED] T9964.166

[GRAPHIC] [TIFF OMITTED] T9964.167

[GRAPHIC] [TIFF OMITTED] T9964.168

[GRAPHIC] [TIFF OMITTED] T9964.169

[GRAPHIC] [TIFF OMITTED] T9964.170

[GRAPHIC] [TIFF OMITTED] T9964.171

[GRAPHIC] [TIFF OMITTED] T9964.172

[GRAPHIC] [TIFF OMITTED] T9964.173

[GRAPHIC] [TIFF OMITTED] T9964.174

[GRAPHIC] [TIFF OMITTED] T9964.175

[GRAPHIC] [TIFF OMITTED] T9964.176

[GRAPHIC] [TIFF OMITTED] T9964.177

[GRAPHIC] [TIFF OMITTED] T9964.178

[GRAPHIC] [TIFF OMITTED] T9964.179

[GRAPHIC] [TIFF OMITTED] T9964.180

[GRAPHIC] [TIFF OMITTED] T9964.181

[GRAPHIC] [TIFF OMITTED] T9964.182

[GRAPHIC] [TIFF OMITTED] T9964.183

[GRAPHIC] [TIFF OMITTED] T9964.184

[GRAPHIC] [TIFF OMITTED] T9964.185

[GRAPHIC] [TIFF OMITTED] T9964.186

[GRAPHIC] [TIFF OMITTED] T9964.187

[GRAPHIC] [TIFF OMITTED] T9964.188

[GRAPHIC] [TIFF OMITTED] T9964.189

[GRAPHIC] [TIFF OMITTED] T9964.190

