[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 

      NIH REFORM ACT OF 2006: PROGRESS, CHALLENGES, AND NEXT STEPS
=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 9, 2008

                               __________

                           Serial No. 110-144


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                        energycommerce.house.gov


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                    COMMITTEE ON ENERGY AND COMMERCE

    JOHN D. DINGELL, Michigan, 
             Chairman
HENRY A. WAXMAN, California
EDWARD J. MARKEY, Massachusetts
RICK BOUCHER, Virginia
EDOLPHUS TOWNS, New York
FRANK PALLONE, Jr., New Jersey
BART GORDON, Tennessee
BOBBY L. RUSH, Illinois
ANNA G. ESHOO, California
BART STUPAK, Michigan
ELIOT L. ENGEL, New York
GENE GREEN, Texas
DIANA DeGETTE, Colorado
    Vice Chair
LOIS CAPPS, California
MIKE DOYLE, Pennsylvania
JANE HARMAN, California
TOM ALLEN, Maine
JAN SCHAKOWSKY, Illinois
HILDA L. SOLIS, California
CHARLES A. GONZALEZ, Texas
JAY INSLEE, Washington
TAMMY BALDWIN, Wisconsin
MIKE ROSS, Arkansas
DARLENE HOOLEY, Oregon
ANTHONY D. WEINER, New York
JIM MATHESON, Utah
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
DORIS O. MATSUI, California          JOE BARTON, Texas
                                         Ranking Member
                                     RALPH M. HALL, Texas
                                     FRED UPTON, Michigan
                                     CLIFF STEARNS, Florida
                                     NATHAN DEAL, Georgia
                                     ED WHITFIELD, Kentucky
                                     BARBARA CUBIN, Wyoming
                                     JOHN SHIMKUS, Illinois
                                     HEATHER WILSON, New Mexico
                                     JOHN SHADEGG, Arizona
                                     CHARLES W. ``CHIP'' PICKERING, 
                                         Mississippi
                                     VITO FOSSELLA, New York
                                     ROY BLUNT, Missouri
                                     STEVE BUYER, Indiana
                                     GEORGE RADANOVICH, California
                                     JOSEPH R. PITTS, Pennsylvania
                                     MARY BONO MACK, California
                                     GREG WALDEN, Oregon
                                     LEE TERRY, Nebraska
                                     MIKE FERGUSON, New Jersey
                                     MIKE ROGERS, Michigan
                                     SUE WILKINS MYRICK, North Carolina
                                     JOHN SULLIVAN, Oklahoma
                                     TIM MURPHY, Pennsylvania
                                     MICHAEL C. BURGESS, Texas
                                     MARSHA BLACKBURN, Tennessee
_________________________________________________________________

                           Professional Staff

 Dennis B. Fitzgibbons, Chief of 
               Staff
Gregg A. Rothschild, Chief Counsel
   Sharon E. Davis, Chief Clerk
  David Cavicke, Minority Staff 
             Director

                                  (ii)
                         Subcommittee on Health

                FRANK PALLONE, Jr., New Jersey, Chairman
HENRY A. WAXMAN, California          NATHAN DEAL, Georgia,
EDOLPHUS TOWNS, New York                 Ranking Member
BART GORDON, Tennessee               RALPH M. HALL, Texas
ANNA G. ESHOO, California            BARBARA CUBIN, Wyoming
GENE GREEN, Texas                    HEATHER WILSON, New Mexico
DIANA DeGETTE, Colorado              JOHN B. SHADEGG, Arizona
LOIS CAPPS, California               STEVE BUYER, Indiana
    Vice Chair                       JOSEPH R. PITTS, Pennsylvania
TOM ALLEN, Maine                     MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin             MIKE ROGERS, Michigan
ELIOT L. ENGEL, New York             SUE WILKINS MYRICK, North Carolina
JAN SCHAKOWSKY, Illinois             JOHN SULLIVAN, Oklahoma
HILDA L. SOLIS, California           TIM MURPHY, Pennsylvania
MIKE ROSS, Arkansas                  MICHAEL C. BURGESS, Texas
DARLENE HOOLEY, Oregon               MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York          JOE BARTON, Texas (ex officio)
JIM MATHESON, Utah
JOHN D. DINGELL, Michigan (ex 
    officio)
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     1
Hon. Nathan Deal, a Representative in Congress from the State of 
  Georgia, opening statement.....................................     3
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, prepared statement..............................     4
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     5
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................     7
Hon. John D. Dingell, a Representative in Congress from the State 
  of Texas, prepared statement...................................     7
Hon. Jan Schakowsky, a Representative in Congress from the State 
  of Illinois, opening statement.................................     8
Hon. Tim Murphy, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     9
Hon. Tammy Baldwin, a Representative in Congress from the State 
  of Wisconsin, opening statement................................    10
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................    11
Hon. Jim Matheson, a Representative in Congress from the State of 
  Utah, opening statement........................................    40
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, prepared statement......................................    54

                               Witnesses

Elias A. Zerhouni, M.D., Director, National Institutes of Health.    12
    Prepared statement...........................................    19
    Questions for the record.....................................    75

                           Submitted Material

Hearing slides, submitted by Dr. Zerhouni........................    55
.................................................................


      NIH REFORM ACT OF 2006: PROGRESS, CHALLENGES, AND NEXT STEPS

                              ----------                              


                       TUESDAY, SEPTEMBER 9, 2008

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:05 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Frank 
Pallone, Jr. (chairman) presiding.
    Members present: Representatives Pallone, Eshoo, DeGette, 
Baldwin, Schakowsky, Matheson, Deal, Myrick, Murphy, Burgess, 
Blackburn, and Barton (ex officio).
    Staff present: Melissa Sidman, Jessica McNiece, Carly 
Hepola, Lauren Bloomberg, Chad Grant, and Aarti Shah.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. The meeting of the subcommittee is called to 
order, and today we are having a hearing on NIH reform, ``NIH 
Reform Act of 2006: Progress, Challenges, and Next Steps,'' and 
I will recognize myself initially for an opening statement.
    First, I guess I would like to welcome back all my 
colleagues from the 5 week district work period. I have to say, 
to me it felt like we were here yesterday but I know it was a 
busy time, hopefully a productive time.
    The subcommittee, as I said, is meeting to discuss the 
progress, the challenges, and the work that still needs to be 
done to meet the expectations outlined in the NIH Reform Act 
that was passed in 2006, and I know that our ranking member of 
the full committee, the gentleman from Texas, Mr. Barton, was 
very much involved in that legislation and specifically 
requested that we have the hearing today.
    For over a century, the National Institutes of Health has 
played a fundamental role in the advancement of biomedical, 
behavioral and population-based research. NIH translates 
cutting-edge research into practical applications. This work 
has led to the development of new diagnostic tools which have 
permitted early detection of numerous diseases and have 
produced innovative treatments that have saved millions of 
lives and profoundly improved the lives of many others. Federal 
investment in NIH research has led to groundbreaking 
discoveries in the fight against cancer, diabetes, heart 
disease, and numerous other conditions that impact the lives of 
all American families. For the most part there is a mutual 
understanding of the importance of this research and public 
education, which up until recent years was reflected in a 
bipartisan effort to double funding for the NIH. Democrats and 
Republicans were united in ensuring NIH had the resources it 
needed to continue its mission. This, however, or unfortunately 
is no longer the case as the priorities of this Administration 
have shifted towards broad tax cuts and increased funding for 
defense and the war in Iraq. There is not enough money to fund 
domestic priorities including the vital research conducted by 
the NIH.
    The President's fiscal year 2009 budget proposal was no 
different. He has yet again requested flat funding for the NIH, 
which if adjusted for inflation, would represent a 14 percent 
cut in funding, and has threatened to veto any domestic 
spending bill that exceeds his request. This Administration is 
willing to spend $12 billion each month on the conflicts in 
Iraq and Afghanistan but has abandoned the commitment, in my 
opinion, to the medical research that will help provide 
lifesaving treatment to our returning veterans and millions of 
other Americans. While one-third of veterans returning from 
Iraq and Afghanistan suffer from debilitating mental illness 
and while the rate of suicide among our national heroes is now 
double that of the general population, mental health research 
has remained relatively flat for years. I have to say, during 
the Democratic Convention, our New Jersey delegation had a 
visit during one of our breakfasts by Congressman Patrick 
Kennedy from Rhode Island, and he specifically talked about how 
the amount of funding for mental illness and suicide prevention 
has really effectively gone down.
    We also have a great need for further research into 
traumatic brain injury. It is estimated that 10 to 20 percent 
of Iraq and Afghanistan veterans have experienced traumatic 
brain injury from exposure to roadside bomb blasts but show no 
outward signs of the condition, and this coupled with our 
current limited understanding of the condition and its symptoms 
is resulting in many of our military personnel suffering with 
little hope of getting better. We have an obligation, in my 
opinion, to our war heroes and to all Americans to ensure that 
this lack of investment in medical research ends. We must 
increase the funding levels for NIH to improve diagnosis and 
treatment of these debilitating injuries and diseases.
    I think we are in danger of losing ground to other nations 
that are making medical and biotechnical research more of a 
priority, and this cannot continue without devastating results. 
We must recommit to provide the NIH the funding it needs to 
continue the innovative research that has brought hope to so 
many Americans.
    Now, in the 2006 Act, Congress asked the National 
Institutes of Health to report on their work and required them 
to reorganize and use limited funds in a more effective and 
efficient way. We also required them to release a biannual 
report detailing this activity and laying out the Institute's 
progress. The first report was just released a few weeks ago 
and today we will be hearing from Dr. Zerhouni, director of the 
NIH, on how the requirements laid out by Congress in 2006 are 
being implemented. I am eager to hear about the organizational 
changes and strategic planning activities that have taken place 
at NIH since the passage of the Act as well as the cross-
institute initiatives that have been implemented.
    As we discuss the next steps in our continued effort to 
improve NIH, it is vital that we all work together to make sure 
it is strong and effective, not only through organizational 
change but also through a renewed commitment to providing the 
funding necessary to continue the great work of the agency, and 
I hope that we can all work together to further this mission.
    I do want to specifically mention, as I already have, the 
efforts of Mr. Barton and also Mr. Deal. I know that they 
worked on this quite a bit and Mr. Barton was actually the 
sponsor of it when we were in the Majority and so I note he 
cares a great deal and that is really the reason that we are 
having the hearing today.
    I yield now to our ranking member of the subcommittee, Mr. 
Deal.

  OPENING STATEMENT OF HON. NATHAN DEAL, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Deal. Thank you, Mr. Chairman, for holding this very 
important hearing to examine the NIH Reform Act of 2006 and its 
implications on biomedical research at the National Institutes 
of Health, and thank you, Dr. Zerhouni, for being with us 
today. We look forward to your testimony.
    As we all agree, the NIH is a critical component of the 
puzzle in the healthcare delivery mission of our Nation. They 
lead research, paving the road for biomedical developments of 
our future and actively engage in preserving the health of all 
Americans through research and innovation. I am looking forward 
to hearing what Dr. Zerhouni will say regarding the NIH Reform 
Act of 2006 and the improvements at NIH which have subsequently 
resulted. I believe this legislation laid an appropriate 
foundation to fund trans-NIH research, revolutionizing the way 
interdisciplinary science shares information of common 
interest. The Common Fund authorized by this Act laid the 
groundwork for transformational healthcare research at the 
National Institutes of Health. Additionally, the Act called for 
great transparency so taxpayers know exactly how their hard-
earned dollars are being spent. It also required greater 
accountability on the part of NIH to ensure that these needed 
dollars are being spent appropriately.
    While NIH has modernized its structure and operational 
objectives, there is still much yet to be accomplished. For 
example, how does the Institute determine a fair share of 
research dollars for certain disease-specific issues? Do 
appropriators account for the outside private revenue-
generating capacity which some enjoy while others fall very 
short. Even last week, celebrities banded with three major 
television networks to host a nationwide telethon in support of 
the fight on cancer. Musicians, actors, reporters and 
businesspeople alike joined forces and managed to raise over 
$100 million for the American Cancer Society. This is fantastic 
and represents the power of the American people when we all 
come together for a common cause.
    There are, however, many research-worthy conditions which 
do not enjoy this type of support, many of which whose budgets 
are modest yet critically underfunded, are forced to abandon 
research due to monetary constraints. How are these specific 
circumstances mitigated to ensure every disease is given at 
least some degree of scrutiny through their NIH dollars? 
Furthermore, research is only beneficial to the public when 
information is shared among scientists and healthcare 
professionals. How do we stimulate cross-disciplinary sharing 
of this critical research data, which is so critical to our 
fight against disease? As we move forward, I am hopeful we can 
address these apparent concerns and continue to push NIH toward 
innovation and development and not back to the ways of our 
past.
    Again, I am encouraged by the developments made since the 
implementation of the NIH Reform Act of 2006 and foster an 
appreciation of the cross-cutting innovative research at NIH 
upon which we, our families, and our constituents depend as a 
result of the passage of this legislation. By giving the 
director the tools to implement strategic research planning and 
to promote cross-institutional research, barriers to medical 
innovation are being broken, and I thank you, Mr. Chairman, and 
I thank Dr. Zerhouni for being with us today and we look 
forward to this hearing.
    Thank you. I yield back.
    Mr. Pallone. Thank you, Mr. Deal.
    I next recognize for an opening statement the gentlewoman 
from California, Ms. Eshoo.
    Ms. Eshoo. Good morning, Mr. Chairman. It is good to be 
back. Welcome, Dr. Zerhouni. I am going to submit my statement 
for the record and reserve the time for questions. Thank you.
    [The prepared statement of Ms. Eshoo follows:]

                Prepared statement of Hon. Anna G. Eshoo

    Thank you Mr. Chairman for holding this hearing on the NIH 
Reform Act. As the first reauthorization of the NIH in 13 
years, it's a significant piece of legislation that will 
transform the way the NIH operates for years to come.
    Our oversight NIH, which I call the ``National Institutes 
of Hope,'' is, I believe, the crown jewel in the jurisdiction 
of the Energy and Commerce Committee. The legislation we're 
discussing today was endorsed by some of the most important 
stakeholders and experts in healthcare, including Dr. Zerhouni.
    Last February, Dr. Zerhouni flew to my Congressional 
District to participate in a Healthcare Forum at Stanford 
University, to join Speaker Pelosi, John Chambers, CEO of 
Cisco, and leading experts to discuss innovations in 
healthcare. Dr. Zerhouni spoke to our tendencies to manage the 
short term when it comes to medicine. What we need is a clear 
vision, to look into the future 15 and 20 years from now. He 
gave us a wonderful analogy of our efforts to combat polio more 
than 50 years ago. It could have been our strategy in 1954 to 
improve the iron lung, to make it very productive, very 
effective, and very efficient and forget about a vaccine for 
polio. If that were the case, we'd have terrific iron lungs 
today and no vaccine for polio.
    The NIH serves a crucial mission to the American people. We 
trust the NIH to acquire new knowledge and conduct basic 
research that will enable us to prevent, detect, diagnose, and 
treat diseases from the rarest genetic disorder to the common 
cold. We make investments in the NIH because it represents hope 
for the future.
    There are many, many important elements to this law. The 
establishment of the common fund should serve to stimulate 
trans-NIH research in areas of emerging scientific 
opportunities. The creation of a new infrastructure at NIH to 
evaluate and report on the research portfolio will make it 
easier for the public to gain access to all the work that's 
being done under NIH grants.
    What the bill does not address is the very real issue of 
funding. While the bill authorizes a 5% increase a year, we 
have not seen this happen, and after adjusting for inflation, 
the NIH is actually losing money. After years of significant 
funding increases for NIH, we've come to a complete halt in 
growth, with President Bush requesting a $5 million decrease 
for Fiscal Year 2009.
    I look forward to learning more about how the NIH Reform 
Act has been implemented, what barriers and successes have been 
discovered, and how we can continue to improve the National 
Institutes of Health.
                              ----------                              

    Mr. Pallone. Thank you.
    Our ranking member of the full committee, Mr. Barton, is 
recognized.

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. Thank you, Mr. Chairman, and I thank the full 
committee, Chairman Dingell for holding this hearing. You know 
it is important to me if I am actually here on time, so I am 
here today and I was here, let the record show, at a little 
before 10:00. I want to thank Dr. Zerhouni for his attendance. 
He has done an outstanding job as director of the NIH.
    I did request both informally and formally to Chairman 
Dingell that we hold an oversight hearing on the NIH Reform Act 
of 2006 and I am very pleased and honored that Chairman Dingell 
and Chairman Pallone would honor that request.
    The law that we are reviewing today represents the first 
thorough, complete reauthorization of NIH in over 13 years at 
the time it was done in 2006. Reforming NIH was a top priority 
of mine as the chairman of this illustrious committee and the 
writing of this specific legislation proved to be a very long 
and arduous process. The bill that we are reviewing today or 
the law that we are reviewing today was literally the last act 
of the last Congress. It passed at, my recollection, about 3:00 
in the morning and Congress adjourned about 3:15. So it took to 
the very last to get this done. Having said that, I think the 
last 2 years have shown that passing this Act was the right 
thing to do. Changes are being made. I think the NIH and the 
research community that it represents are better today because 
of the law that we are reviewing today.
    In some respects, I think it is safe to say now in 
hindsight that the old NIH was stuck in the past. This law gave 
it the flexibility to adopt new research opportunities. It 
actually gave the director, in this case, Dr. Zerhouni, some 
real clout. It made him more than a figurehead. It gave him the 
ability to do oversight within the NIH. It gave the director's 
office the ability to coordinate research responsibilities that 
spanned a very many number of institutes and centers that 
constitute in total the NIH. The division of program 
coordination, planning and strategic initiatives was 
established under this Act to give focus to new areas of 
emerging scientific opportunity, allowing the NIH to coordinate 
and plan in a cross-NIH way new research initiatives that had 
not been allowed to do and able to do in the past.
    As we all know, much of the research that the NIH does is 
disease-specific, and that is as it should be, but we know that 
if we focus only on one disease, sometimes researchers were 
blinders to advances in other areas that might be of help to 
them. Under the old NIH system, the director presided over this 
type of research but had no ability to systematically inform 
other scientists of other researchers' discoveries in other 
areas in a different institute. That was a major problem. 
Everyone who has looked at the new system, the new coordination 
role that we have under the new law, agrees that this new 
system gives enhanced opportunities to make new and necessary 
medical advances in a more timely fashion.
    I am particularly proud of what is called the NIH Roadmap 
for Medical Research. This is funded through another of the new 
funds that we now have, a fund that is called the Common Fund. 
The roadmap is a set of trans-NIH research activities designed 
to support high-risk, high-impact research in emerging areas of 
scientific or public health areas. The new law requires 
transparency so that Congress and the public can know what the 
NIH is doing, how the dollars are being spent and what the 
results of those spending decisions are.
    There is one thing that I hope we can explore today, Mr. 
Chairman. As we all know, the very structure of the NIH, these 
institutes that are somewhat isolated, kind of the silo style 
approach, lends itself sometimes to pigeonholing new knowledge. 
If this is not managed correctly, the NIH centers, as good as 
they are on an individual basis, not only do they not share 
information, sometimes they actually fight other institutes for 
high-priority funding. That is understandable if unfortunate. 
That is why I think it is so important and why I fought so hard 
in the last Congress to put in this Common Fund approach to get 
it its own line item and to encourage the Appropriations 
Committee to actually fund the Common Fund, which they are 
doing and I am very pleased about that. I feel very strongly 
that the Congress should not micromanage the NIH by dictating 
which disease or which disorder gets the highest priority in 
funding. I want scientists, not politicians, as well 
intentioned as we can be, and not advocates, as well 
intentioned as they can be, to figure out who gets the most 
money for the newest disease on the block that is the highest 
priority. I am proud to say that so far this Common Fund 
approach appears to be working.
    Having said that, there are some of the stakeholders with 
the best of intentions that don't understand the new system or 
perhaps they don't want to understand the new system. In any 
case, once again in this Congress, this committee has numerous 
disease-specific bills before it, all clamoring with some 
justification that they should be the newest highest priority 
for Congress to fund. The whole purpose of the NIH reform bill 
in some ways was not to say we should never fund new research 
or give a higher priority to a different area but that we 
should let the experts, let the people who are most responsible 
to actually do the research in collaboration working within 
this new structure decide where to put the highest priority.
    Mr. Chairman, again, I want to thank you for holding this 
hearing. I look forward to participating to the fullest degree 
possible and trying to make sure that the Congress and the 
people of America understand what the NIH is doing.
    Mr. Pallone. Thank you, Mr. Barton.
    I next recognize the--well, first I have to thank the 
gentlewoman from Colorado for such a nice convention that we 
had, and I had a chance to go look at the Colorado Springs and 
Golden and Boulder. It was really nice, I have to tell you. I 
recognize the gentlewoman.
    Ms. DeGette. Thank you. I hope you spent large amounts of 
money when you were in Colorado.
    Mr. Pallone. I did, unfortunately.
    Ms. DeGette. Mr. Chairman, I want to thank you for having 
this hearing on the NIH Reform Act of 2006, of which I was also 
a strong supporter. I want to welcome Dr. Zerhouni and his 
senior staff, who worked so hard. I will waive my opening 
statement in favor of more time for questioning. Thank you.
    Mr. Pallone. And next is the gentlewoman from Tennessee, 
Ms. Blackburn.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Ms. Blackburn. Thank you, Mr. Chairman. I want to thank you 
for holding the hearing. I want to say welcome to our guest. We 
are so glad that you are here. I will put my full statement in 
the record, but briefly, I was pleased with provisions in the 
NIH Reform Act that cut bloated administrative costs and 
ordered to focus more on funding on research activities. In 
addition, the legislation aimed to improve best practices at 
NIH, and I am looking forward to learning how the NIH has cut 
the bureaucracy, has increased the transparency, has 
streamlined the interagency communication since the NIH Reform 
Act became law. And I know that communication component was one 
that had kind of stumbled, so I am looking forward to hearing 
about that.
    NIH must have the autonomy and tools with which to set and 
develop the Nation's biomedical and behavioral research 
priorities. Often this committee considers disease-specific 
legislation which directs research funding and activities 
instead of allowing NIH to do the job, and I will continue to 
urge Congress to move away from cherry-picking research dollars 
since it is the responsibility of the NIH, and I do not believe 
it is the responsibility of Congress to dictate those research 
priorities.
    I also want to say thank you for giving us the report. Nice 
way to receive that, and I hope that this is an indication of 
the transformation that we have seen in your communication and 
your technology capabilities, and I yield back.
    Mr. Pallone. Thank you.
    I would like to ask unanimous consent that the statement of 
our chairman, Mr. Dingell, be included in the record. Without 
objection, so moved.
    [The prepared statement of Mr. Dingell follows:]

               Prepared statement of Hon. John D. Dingell

    I commend Subcommittee Chairman Pallone for holding this 
hearing today. In the 109th Congress, under the Chairmanship of 
my good friend Joe Barton, this Committee worked in a 
bipartisan and diligent fashion to move legislation which 
reauthorized and reorganized the National Institutes of Health 
(NIH). When Congress passed, and the President subsequently 
signed into law, the ``NIH Reform Act of 2006'', it was only 
the third omnibus reauthorization in NIH's history.
    Passage of the ``NIH Reform Act of 2006'' was a major 
accomplishment for the Congress and was achieved, thanks in 
large part to the dedicated work of Representative Barton. It 
was my sincere pleasure to work with Representative Barton and 
his staff on that legislation.
    As with any major legislation, it is important that the 
committee of jurisdiction exercise its responsibility to 
oversee and evaluate the programs and activities created. That 
is why I am so pleased that the Subcommittee on Health is 
examining the implementation of the ``NIH Reform Act of 2006''. 
And I welcome Dr. Zerhouni, Director of the NIH, who has been 
an invaluable resource to the Committee. Thank you, Dr. 
Zerhouni.
    The ``NIH Reform Act of 2006'' enhanced the authority and 
tools available to the NIH Director's Office to conduct 
strategic planning and to facilitate and fund trans-
disciplinary, cross-Institute research initiatives. In 
addition, the law created more budgetary, organizational, and 
programmatic transparency at the NIH and standardized data and 
information management systems.
    Although this law was a significant step in the right 
direction, the NIH still faces many hurdles. Challenges facing 
the agency--such as attracting and keeping young scientists, 
creating opportunities for trans-disciplinary research that cut 
across Institute boundaries, and managing the portfolio of 
extramural and intramural research--are only being compounded 
by insufficient funding.
    After years of significant funding increases for NIH in its 
fight against disease, this Administration has consistently 
chosen to flat fund or decrease NIH's budget. For instance, the 
President's FY2009 budget requested a decrease of $5 million 
below the FY2008 program level. This budget decrease could 
significantly harm the country's principal medical research 
agency. This is simply unacceptable.
    I look forward to hearing Dr. Zerhouni's testimony about 
the implementation of the NIH Reform Act and I welcome his 
views about how to respond to challenges that lie ahead.
                              ----------                              

    Mr. Pallone. And the next recognized for an opening 
statement, the gentlewoman from Illinois, Ms. Schakowsky.

 OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you so much, Mr. Chairman, and thank 
you, Dr. Zerhouni. I wanted to give you a personal thank you 
for being helpful to me and my family when we needed help, and 
I appreciate the opportunity to discuss the direction and 
priorities of the NIH, ensuring that the agency continues to 
expand its lifesaving research in the interest of all 
Americans. I want to applaud your leadership on these issues as 
well as the other issues designed to advance the cause of 
biomedical research and improve healthcare quality.
    The NIH is our Nation's leading research institution and we 
look to it to develop cutting-edge cures for debilitating 
diseases like heart disease, diabetes, cancer, and so many 
other illnesses that are families are struggling with every 
day. And yet over the past 5 years the Administration has 
refused to make NIH funding a priority. From fiscal year 2003 
to fiscal year 2008, the NIH budget has steadily declined. Yet 
President Bush proposed another reduction in NIH dollars in his 
fiscal year 2009 budget, representing a 14 percent decrease 
from the fiscal year 2003 levels. We are on the verge of many 
breakthroughs in treating and preventing serious illnesses and 
yet it seems we are moving backwards.
    When we passed the NIH Reform Act, I and many of my 
colleagues were on record expressing our concerns with the 
annual 5 percent increase in NIH funding as provided for in the 
legislation, saying that it was insufficient to keep pace with 
the rate of inflation. We tried to include an amendment that 
would authorize the NIH with a real 5 percent increase that 
accounted for inflation and rising costs of conducting this 
invaluable work and were defeated despite having the backing of 
numerous research and patient advocacy organizations. We never 
imagined that we would be fighting back gradual cuts to the 
program and it is time that we corrected the focus of this 
committee and of the Congress.
    NIH budget cuts damage the agency's ability to support 
dynamic new research projects and recruit talented and creative 
new investigators. A report authored earlier this year by 
prominent university presidents and professors highlighted a 
long list of adverse effects of the flat NIH budget including 
an 8 percent decrease in the overall success rate for vital NIH 
research projects. We can't possibly maintain our standing as 
the world's leader in first-rate innovative medical research 
with statistics like those.
    So Dr. Zerhouni, I commend you for continuing to move 
forward with our research priorities on a diminishing budget, 
and it is my sincere hope that the President and this Congress 
will step up to the plate and provide NIH with adequate 
resources to continue your work. Thank you so much for being 
here again. I appreciate it.
    Mr. Pallone. Thank you.
    I next recognize the gentleman from Pennsylvania, Mr. 
Murphy.

   OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Murphy. Thank you, Chairman Pallone and Ranking Member 
Deal for this hearing today, and thank you, Dr. Zerhouni, for 
the testimony we are going to hear today.
    The research conducted at the National Institutes of Health 
is critical to improving healthcare for Americans and funding 
through medical research. As an adjunct faculty member myself 
on the University of Pittsburgh School of Medicine and the 
University of Pittsburgh School of Public Health, I witnessed 
firsthand many of the collaborative efforts that take place and 
much of the groundbreaking research.
    I also want to make sure we thank Chairman Barton during 
his tenure as chairman for the work he did in moving this bill 
forward before and the ongoing work that Mr. Dingell and Mr. 
Barton have pushed for with NIH reforms. I think they paid off.
    But I want to say that there are some areas that I think 
are so important for the future moving forward. The 
collaborative efforts or the latitude that you have or the NIH 
has in investing in research is vital. But one of the things 
that I want to make sure, at a time when we are concerned about 
the $2 trillion expense of healthcare in America, that NIH can 
and I believe should play a leadership role in pushing for 
major reforms that can come out of collaborative research. That 
is practical and applied research that is aimed at patient 
safety and patient quality that reduces cost such as disease 
management, such as integrating mental health care with other 
medical care to treat diseases faster, more effectively and 
less costly. We know, for example, that those with chronic 
illness and untreated depression have double the medical costs 
of those without depression or those with treated depression 
and yet many times, and I know researchers will get caught in a 
little box and we want to follow that linear thinking but it is 
important that in your role as the head of NIH that you push 
for people to ask the people in the cubicle or the office next 
door, how does this work and how does this apply. That is where 
great breakthroughs can come through.
    One particular area is that the Centers for Disease Control 
and Prevention reported that healthcare-acquired infections in 
clinics and hospitals contribute to between 90,000 and 100,000 
deaths in the United States each year, which adds over $50 
billion to annual medical costs. So far this year, from January 
1, this means 1,210,000 infections, 59,891 deaths and 
$30,273,000,000 in costs. And every time Congress looks at the 
costs of healthcare and Medicare and Medicaid and the VA and 
private insurance, it is vitally important that we think not 
just in terms of who is paying but what we are paying for and 
what can we do to improve quality. This is an area that I hope 
NIH plays a strong an active leadership role in improving 
healthcare quality in America.
    With that, I look forward to hearing your testimony today 
and I yield back my time.
    Mr. Pallone. Thank you, Mr. Murphy.
    The gentlewoman from Wisconsin, Ms. Baldwin, is recognized.

 OPENING STATEMENT OF HON. TAMMY BALDWIN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF WISCONSIN

    Ms. Baldwin. Thank you, Mr. Chairman, and thank you for 
holding this hearing this morning. Also, I thank you, Dr. 
Zerhouni, for being here today. I really look forward to your 
testimony and the discussion that I expect will follow.
    As my fellow members of this committee have heard many 
times before, I represent south central Wisconsin in the 
Congress and I am honored to have the University of Wisconsin--
Madison as one of the Nation's premier research institutions as 
a part of the district that I represent. Much of the 
university's success has been fueled by NIH funding, so I am 
eager to have a review and a discussion of the reauthorization 
passed last session in Congress.
    These are really exciting times for scientific research as 
we continue to learn more and more about the way that the world 
works and about how the human body functions. We are coupling 
these discoveries with advances in technology and the research 
possibilities are truly exploding. The ability to conquer a 
variety of different diseases is truly within our reach at this 
time. I am really continually amazed at the incredible research 
that is done at the University of Wisconsin and the depth of 
expertise that they house in so many different areas of 
research. From the initial discovery of how to grow and sustain 
stem cells made by Dr. Jamie Thompson in 1998 to more recent 
discoveries in virus transmission and vaccine development, the 
UW has been a leader in a number of very exciting research 
fields. Today the university is also paving the way for more 
goal-oriented and interdisciplinary research through its new 
Discovery Center, which will focus on nanotechnology, 
biotechnology and information technology, and in addition, 
through the NIH's clinical and translational science awards, we 
are training the next generation of clinical and translational 
researchers. This is a type of progress that I am incredibly 
proud of in my district and I strongly feel that we as members 
of Congress and as government officials should do everything 
that we can to aid and encourage these researchers and not 
discourage them or tie their hands.
    Despite this potential for amazing progress right now, the 
NIH continues to struggle with a shortfall in funding. Because 
federal funding has not kept pace with inflation since 2003, 
the purchasing power of NIH has decreased 13 percent. My 
colleague, Ms. Schakowsky, just outlined some of the 
consequences. I wanted to highlight two others. While it 
affects all aspects of biomedical research, it has a 
particularly strong effect on one group and that is young 
researchers. Since 1990, the average age at which a researcher 
receives his or her first major NIH grant has increased 4 years 
from 39 years of age to 43 years of age. In addition, the 
percentage of major NIH research grants that go to first-time 
investigators has decreased from 29 percent to 25 percent. So I 
am interested to hear today how the NIH is coping in this very 
difficult environment.
    Dr. Zerhouni, thank you again for coming here. I welcome 
the opportunity to talk about the NIH and look forward to the 
questions that will follow your testimony.
    Mr. Pallone. Thank you, Ms. Baldwin.
    Next recognized for an opening statement, the gentleman 
from Texas, Mr. Burgess.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, Mr. Chairman. Dr. Zerhouni, welcome 
back to our humble committee. Every time I hear you talk--and I 
have stolen this line from you and used it so many times I 
almost embraced it as my own, but you talk about medicine 
becoming more personalized, and because it is more 
personalized, it is going to be more predictive, and because it 
is more predictive it can be more preventive, and has to be 
more participatory, and really, those are the guideposts for me 
whenever we talk about healthcare policy in this Congress. I 
want to make certain that we do nothing that will deflect you 
from that path because I believe that to be the correct one.
    I was really very proud and pleased to be part of this 
committee in 2006 when we hammered out the compromise that we 
now know as the NIH Reform Act. I am grateful to Chairman 
Barton for putting so much emphasis on that in the 109th 
Congress. Part of your problem is us, and we come to you and 
say this has to be a priority and this has to be a priority, 
and when everything is a priority, nothing is a priority, and 
the Reform Act was to try to inject some measure of sanity into 
your world and I am anxious to see whether or not we have done 
that. I am interested to hear about the gains we have made in 
the translational research at the National Institutes of 
Health. I am interested to hear about the research that has 
been funded and the new demonstration programs that allow you 
to allocate funds and award grants and contracts and engage in 
other transactions for high-impact, cutting-edge medical 
research.
    And then finally, this year we lost one of the giants in 
medical research, Dr. Michael DeBakey, at the age of 99, and 
shortly before his passing, I had an opportunity to talk to Dr. 
DeBakey and he talked about how the world had been transformed 
by the NIH, and when he was a young man and graduated from 
medical school, he had to go to Europe to get the credential to 
be a researcher and now the world is a different place and 
researchers come to the United States to get the credentials to 
go into careers in research, and he empathically pointed out to 
me that Congress did that by its activity in the 1940s and 
1950s transforming the NIH, and if it was a priority for the 
Congress in the 1940s and 1950s, there is no reason that it 
shouldn't be a priority for the Congress of the 21st century.
    So I look forward to hearing your testimony today and I 
assure you that we will work with you to make certain that we 
all achieve the goals that you talk about so frequently, and I 
will yield back.
    Mr. Pallone. Thank you, Mr. Burgess.
    The gentleman from Utah is recognized for an opening 
statement, Mr. Matheson.

  OPENING STATEMENT OF HON. JIM MATHESON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF UTAH

    Mr. Matheson. Thank you, Mr. Chairman. I will be very 
brief.
    I want to thank you for the hearing. We all certainly value 
the efforts of NIH, and Dr. Zerhouni, I appreciate your taking 
the time to be with us today. Funding is an important issue, 
you have heard a lot of people on this committee mention that, 
but it is also important that we know that our programs are 
being implemented effectively, and that is really the purpose 
of this hearing to get an update from you on the Reform Act and 
I think this is wholly appropriate that we are having this 
discussion today and I look forward to your remarks.
    Mr. Pallone. Thank you. I think that concludes our opening 
statements by the members so we will now move to our first and 
only panel and our only witness, Dr. Zerhouni. Let me just take 
a minute here to first welcome you, and mention that you of 
course are the director of the National Institutes of Health. 
This is Dr. Elias A. Zerhouni, who is also a medical doctor. We 
have a 5-minute opening statement. Since you are the only 
person though, I am certainly not going to stick to that, and I 
know you said you would like to talk a little longer so please 
proceed. You know your statement becomes part of the record, 
and in the discretion of the committee we may submit additional 
brief and pertinent statements in writing for inclusion in the 
record. Thank you for being here and thank you for what you do.

   STATEMENT OF ELIAS A. ZERHOUNI, M.D., DIRECTOR, NATIONAL 
                      INSTITUTES OF HEALTH

    Dr. Zerhouni. Thank you, Mr. Chairman. First of all, I 
would like to thank you and thank Mr. Deal for this committee 
meeting. I thought it was appropriate that we met with all the 
members to really report to you on the progress of the Reform 
Act of 2006, which passed about 18 months ago.
    But before I do that, I would like to personally and 
publicly thank Chairman Barton, who at the time single-handedly 
led the effort at the beginning and then crossed the aisle and 
worked in an extraordinary bipartisan fashion with Chairman 
Dingell and members in the Senate to make this happen really at 
the last minute of the last 109th Congress. I want to thank you 
personally because it has made a huge difference in the outlook 
for science and the outlook for health in the country.
    And today what I would like to do is to show you why it is 
important to understand what are the mega trends, what are the 
real trends in science and why is the Reform Act fitting with 
what is happening on the ground in science. So my testimony, my 
oral testimony will be focused on that, but I have also 
submitted a full written testimony for the record, Mr. 
Chairman.
    When you think about where we are in science, I would like 
to stress and direct your attention to the slides. We provided 
also hard copies for you. There are four fundamental points. 
First and foremost, I have never witnessed in my career such a 
rapid pace of new and extraordinary discoveries which truly are 
changing the way we see medicine in the future to an era of 
medicine that will be personalized. And it will affect health 
and the way we manage health, we pay for health, we pay in the 
21st century, and how our costs are going to be affected 
because of the ushering in of this new era. This new era can 
only be here because scientific progress over the past 20 years 
has led us to realize that diseases as we knew them and 
disciplines of science as we knew them are actually not 
parallel to what the discoveries are. In fact, we are noticing 
today an enormous convergence of science. Fields of cancer 
research have had a huge impact on HIV/AIDS. Fields in cardiac 
research have had a huge impact on cancer research and one of 
the most successful treatments for cancer, Gleevec, actually 
came from research initially in the cardiovascular system. In 
addition, this convergence tells us that we have to cross 
boundaries. You cannot be bound by boundaries. You have to be 
without boundaries going forward in the life sciences.
    We also know that it is essential that we match our 
organizational changes to where the science is rather than fit 
the science into your organizational structures so that if you 
look strategically from the standpoint of the NIH director, you 
really have an obligation to look at how is the agency, as 
complex as it is, doing its work in the short term. What are 
the tools to manage the agency in the medium term and what are 
the tools that you need to manage the agency in the long term. 
Agencies don't change every year. They change over several 
years. Where was the mechanism to do that? Programs don't 
happen in a month. They happen over 2, 3 years. Where was the 
mechanism to make sure that those were coordinated and were 
strategic. That's what the NIH Reform Act has done, and my 
testimony will essentially tell you where is the science, what 
is the rationale for this convergence of science, which means 
that our patients today are likely to suffer from more diseases 
and mechanisms of disease that affect them across institutes 
and across the missions of different institutes.
    The NIH Reform Act of 2006 really, in my view, solved a 
fundamental problem as well explained by Mr. Barton, which was 
to address the medium- and long-term issues and how do you 
adapt an agency as complex as the NIH for its mission. So I 
would like to just take you back for a second in terms of what 
has happened in science over the past 20 years. Fundamentally, 
all of us scientists have gone from observing disease from the 
outside to try to go to the real essence of biology, so we have 
gone from the surface of the cell and then we have gone to the 
nucleus of the cell and eventually in 1953, the first discovery 
of the structure of DNA told us that DNA was important. But it 
took us about the last 20 years to unravel the chromosomes: we 
have 23 pairs of chromosomes, the very long, 3 billion basis of 
the DNA of humans. We had completed the human genome in 2003 
and we had said that this would be the basis of a true 
revolution in science. Why is that? Why is that long stretch of 
DNA bases telling us that this in fact is a key to the 
mysteries of biology today?
    [Slide shown.]
    So what I would like to do is, if you will allow me, to 
give you a little bit of a sense of how we see it. On the left-
hand side is DNA. DNA essentially is a code, an instruction 
book that each part of the DNA may code for a particular gene 
product which usually is a protein. So in this case, I am 
showing you five proteins, A, B, C, D and E, but what we didn't 
understand is that all of these proteins don't act in 
isolation. They all interact. For example, we now have what we 
call networks and pathways of molecules which are very complex. 
So in this case, for example, I show you molecule C, which has 
the ability, for example, with that bar that goes back with a 
stop sign to stop the production of protein A and may encourage 
the production of protein D, and all of that in health is what 
you need to do as a physician. You need to maintain your 
patient within what I call the homeostasis zone, where 
everything is in balance.
    Now, we know that disease means that all of these networks 
are out of balance. How do we unravel that complex? The human 
genome gave us a key and many, many other advances give us the 
ability to study proteins to study RNA and DNA in detail. But 
now let me show you what has happened in the past 3 years that 
has changed the world. Clearly, when we look at the DNA 
sequence, what we are looking for are in the disease state. 
Perhaps a misspelling, a mutation, as you see that star sign 
there, that has affected protein C. Well, that mutation is 
going to change the way the protein functions, is going to 
change usually its shape, and in this case, you can see that C 
is no longer functional, and look what happens. If C is not 
functional, then A is going to grow, and if C is not 
functional, D is going to go down, and all of that basically 
creates a dysfunction. So what you see all of a sudden is in 
the disease state you have more A than you should, more 
cholesterol, for example, more of a protein that you shouldn't 
have, which is what we look for when we want to diagnosis a 
disease. We say, ``Does this patient have high cholesterol, 
what type of cholesterol, how is it related to heart disease?'' 
That is what we do. And the reason I am giving you this 
background is to now show you what has happened to me in my 
career here at the NIH over the past 6 years and to the world 
of science.
    On this table, I am showing you the 23 chromosomes of 
humans from one to the last chromosome. We have a pair of each 
one of these, and what we have at the NIH is a map that we 
developed with the National Human Genome Research Institute, 
all the institutes, and I asked all the institutes to report to 
me any finding that they have made that may explain a 
dysfunction in one of these networks that I showed you of 
molecules. In 2005, there was one discovery which related to 
macular degeneration, which is a major cause of blindness. Then 
I waited and waited for the reports, and in 2006 I had three 
new reports related to heart disease, inflammatory bowel 
disease, very surprising discoveries actually, and we invested 
in 2005 in a large effort across all NIH to try to find out 
more of these markers of disease states. Look at what happened. 
In the first quarter of 2007, all of a sudden I got more 
reports of discoveries than I had in the previous 2 years. 
Second quarter, it doubled. Third quarter, it increased again.
    By the fourth quarter of 2007, I knew I had a real problem 
because all of these discoveries meant a complete rethinking of 
how NIH was going to address these problems. But thanks to the 
Reform Act, we had a mechanism with the Common Opportunity Fund 
to get together and say how are we going to tackle this. We had 
a retreat of all the directors and we talked about our new 
strategies, and sure, we should have because look at what 
happened in 2008, first quarter, and the second quarter. This, 
members of the committee, is an explosion of knowledge. I have 
never witnessed such an explosion in my entire career. I didn't 
think that we would witness this so fast.
    I will give you an example. We spent years of research 
trying to find out, as Mr. Murphy was pointing out, the complex 
causes of chronic diseases because chronic diseases like 
diabetes and heart disease are the main diseases, and we never 
found out. Ten years ago we had no inkling as to exactly what 
was wrong in diabetes. Today we have 16 genes that we know we 
are going to investigate like detectives. These are clues. We 
are going to go after them. Autism is another disease that is 
very worrisome in terms of its presence, its increase, the 
impact it has on families. We were searching around and we 
decided to invest in a project where we would go around the 
world and do a comparison of patients with autism and patients 
without autism, using these modern methodologies, and guess 
what? We discovered just last month six new genes. Those are 
clues.
    What happens after you have made these discoveries is, you 
need to explore them and you cannot sit back. You have to be 
nimble. The pace of change is so fast that we needed the 
instruments to react quickly and the NIH Reform Act frankly, 
has done that for me and for the NIH and for all of science 
because it allows us to have a conversation that is proactive 
rather than reactive. So if you look, for example, at the plan, 
what is the NIH plan? The NIH plan is after these discoveries 
are made, these are clues. We are going to study more 
populations, more genes. We are going to try to understand how 
these complex networks work. That will give us leads, real 
leads, and those will lead to targets once we prove that they 
are indeed, like cholesterol being high, that is a real target, 
and that will then be translated through centers like the 
Centers for Clinical and Translational Science and other things 
we are doing into either diagnostics to be more predictive or 
prevention to preempt disease or treatments. That is the 
fundamental trend of science. But that tells you I have not 
used the word of any one disease, any one institute, any one 
organization. You are going to have to cross borders and to 
fertilize across borders, across disciplines, across all types 
of sciences, physical as well as biological sciences.
    So how is that embedded in the future? It means that 
medicine will have to become much more personalized, much more 
predictive, much more preemptive, but it will require us to go 
from a system of healthcare to a system of health. That is the 
fundamental change going forward.
    Now, how has that worked for us? Let me just describe for 
you what has happened at the NIH and how the institution has 
responded to this. First, as I said, all the directors, myself 
included, sat together and said we need to be more nimble, we 
need to streamline the way we make decisions. We had 63 
committees, 24 appropriations, institutes. Everybody had to get 
their OK, and frankly, it wasn't as functional and we wanted it 
to be in an era where everything is converging. It was fine 20 
years ago. It is not fine today. So the first thing we did is, 
we streamlined governance. And this is essentially the 
governance of NIH with a central steering committee of 10 
directors that have the authority to basically advise the NIH 
director, and once those decisions are made, they are really 
decisions that we all abide by. That has created a level of 
coordination that we didn't really have but this only takes 
care of short-term issues and we have five management 
committees. We eliminated 63 separate committees that had a say 
in the affairs of the NIH. That has streamlined things, made it 
more functional. But in 2006 we were able to add, through the 
Reform Act, the element that allows you to manage in the medium 
term, and that is this Division of Program Coordination, 
Planning, and Strategic Initiatives. It allows us to have 
resources to look at what is happening in science, where are 
the gaps, where are the opportunities. Let us move quickly in 
that direction. This is really what I think the Reform Act has 
given us.
    Let me show you the impact of that. So I would like to show 
you what the mechanisms would have been before the Reform Act. 
If you had an idea, you would have to convince 24 separate 
institutes that this was important to them. But you know in 
science, bold ideas don't get adopted by 24 people at once. It 
doesn't happen this way. So typically what happens is, you get 
convinced when the game is over basically, yes, we have already 
made that, it is pretty clear that it is a good investment, 
like the genome. The Human Genome Project was one of the most 
controversial projects started at the NIH. It was opposed by 
large majority of individuals who said this is just a lot of 
mechanics but not science. Once it became successful, there is 
not an institute that doesn't have a genomics program. So 
science can't wait for the consensus of so many. It needs to be 
bold. It needs to be gutsy. It needs to move fast. In the past 
we had obviously the ability to do that but it would take 
longer because you have to go through the process, then 
accumulate the dollars.
    Now, in good times when the budgets are rising, there are 
more dollars to give to bold initiatives but what happens when 
budgets are not so generous as they have been generous over the 
past 5 years. You have to really make priority decisions. How 
do you make those priority decisions? Well, do you take away 
from cancer and give to something that may not have anything to 
do with cancer? That is a difficult proposition, and that is 
where the system really slowed down in an era where convergence 
occurred. We tried an experiment. We said, look instead of 
having this, let us use a small percentage of the NIH budget 
and put it in a common fund and let us discuss then about the 
most exciting opportunities in science, and that is what the 
roadmap prototype was and I was really pleased to see that in 
fact it was adopted and the directors contributed and we had 
some projects that were initialled immediately and implemented 
in a way that a lot of people said we couldn't have done it 
without a Common Opportunity Fund, if you will. And that was 
enshrined in the Reform Act and this is what I think as an 
institutional mechanism this committee has done. You have 
enabled us to separate the question of monies, opportunities 
and 24 different opinions about where science is, to a more 
nimble organization where now the appropriators have 
appropriated a Common Opportunity Fund which allows us to 
basically function in a very different way. Now if you have an 
idea, it goes through this very high-level analysis with lots 
of experts across all fields. It doesn't relate to one 
institute or one disease. They look at the entire portfolio. 
They invite scientists from all areas of science and then they 
make a priority call, and if there is a priority call, it goes 
through this NIH Common Opportunity Fund, 1.8 percent of the 
budget, and then it goes back to an institute that says I am 
going to take the lead. So we are supplementing the institutes' 
budgets depending upon science, not depending upon an 
appropriation process that is not related to the scientific 
priorities.
    So I am just going to give you one example of a 
breakthrough that occurred because of that. When we had the 
Common Opportunity Fund, we decided to provide what we call 
molecular libraries, compounds that only pharmaceutical 
companies had in the past. Scientific researchers in academia 
did not have access to that. And we did it because we had 
advances in robotics and advances in basic technologies that 
allowed us to test 1.5 million compounds against a disease 
target in less that a week. It would have taken a year and a 
half before.
    Now, let me just show you just one example of how that has 
changed one disease, schistosomiasis. It affects 200 million 
people around the world. We had a scientist, Dr. Williams at 
the University of Illinois, who for 20 years had been 
researching it and was hoping that he could test a compound 
that he thought would work. Within a week, he worked with the 
NIH center and he has the first compound that the WHO is saying 
is the number one discovery in tropical diseases in the last 50 
years. So this is what has happened thanks to the Reform Act.
    But going forward, what we are going to do is to continue 
what the other part of the Reform Act that I don't think is 
well understood that is written in law. And that is that NIH 
has to continue to innovate despite all of the environmental 
difficulties, challenges, budgets. America has to invest in 
high-risk, high-impact research. So we did. We have committed 
over $1 billion, in these budget times, trust me, it is not so 
easy to do, $1 billion to what we will call high-risk, high-
impact innovation research, transformative research. This could 
not have happened before the implementation, the passing of the 
Reform Act. Trust me. We couldn't have done it. For example, we 
have implemented what we call the Transformative RO1, what we 
call Discoveries Without Boundaries, and I am showing you a 
little cartoon about what Discoveries Without Boundaries is 
not, and that is, ``I will be happy to give you innovative 
thinking, just give me the guidelines.'' No guidelines. That is 
what we wanted. This allowed us to, for the first time, 
establish a program with no boundaries, and it is implemented 
now. We will see what happens. We will learn from it.
    Last but not least is transparency. You have asked us to be 
more transparent. We intend to be. We have implemented an 
automated system to report to you exactly what we spend on what 
disease, how much we spend on it, and you will have the basis 
of that information. We are distributing this electronically. 
You can search it on your computer. If you have any question, 
you can go back to this and find out what NIH is doing.
    This is the first biennial report. We decided that this was 
a lot tougher to understand and nowadays you can plug that into 
your computer, put the words you want, and you will find out 
exactly what NIH is doing. Now, it is not perfect. Let me just 
make sure we don't oversell this. This is new technology. It is 
knowledge management. It is looking at all of our data. We are 
going to learn from it, but at least we are biting the bullet 
of transparency and we want to do it in a way that I think will 
satisfy you and satisfy the Act.
    Last but not least is the sense that ``long term'' needs to 
be taken care of and long term means continuous improvement to 
look at the agency over years. We never had a mechanism to do 
that. Every time Congress wanted to reform, they would form an 
ad hoc committee that didn't really know what happened before 
and had no stake in what would happen next. So the idea, and I 
want to credit again Chairman Barton for that, was to create a 
very empowered Scientific Management Review Board and this 
Board has been impaneled and the role of this Board is to 
advise the NIH Director to conduct continuous, and the world 
``continuous'' is important. Comprehensive organizational 
reviews of NIH and report these findings no less than every 7 
years to the HHS and Congress, so that you have a mechanism 
that is accountable about understanding these changes and 
proposing changes that are buttressed by facts.
    Mr. Chairman, I know I have abused the time and I apologize 
for going over time but I thought it was important to see the 
connection between why the Reform Act was important in the 
context of science that is changing so fast. Again, thank you 
very much, Mr. Chairman.
    [The prepared statement of Dr. Zerhouni follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMIAT]
    
    
    Mr. Pallone. Thank you. I did want to hear a full statement 
from you. That is why we had you as the only witness today, so 
thank you. And now we will have some questions and I will start 
with myself.
    You mentioned in the Reform Act there were multiple changes 
in the administration, organization, and they created new 
initiatives and responsibilities for the agency including 
increased transparency, accountability, the trans-NIH research 
activities, which you said were so important, and in your 
testimony you outlined the progress NIH has made implementing 
these new provisions. However, as I mentioned in my opening 
statement, we know the funding for NIH has been decreasing in 
real terms in recent years. So can you elaborate on the 
challenges you face implementing these new initiatives, given 
the lack of funding increases?
    Dr. Zerhouni. Right. So we have to be modest. The 
purchasing power of an agency depends obviously on its budget 
relative to inflation. So there is no doubt that you have to 
manage relative to inflation. Costs don't go down. The cost of 
oil doesn't go down. The cost of food doesn't go down. 
Everything has a certain ratio of inflation. So the way we have 
managed this is by truly identifying what are essential 
priorities of the agency. For example, one essential priority 
of the agency is the funding of the next generation of 
scientists. I think Mrs. Baldwin mentioned the fact that early 
stage investigators are funded later and later. We have 
initiatives to prevent that: high-risk, high-impact research. I 
showed you $1 billion committed to pioneer awards and new 
innovator awards so that we can sustain----
    Mr. Pallone. So tell me, that was another one of my 
questions, this new innovator award because, I mean, I know we 
hear a lot about the importance of ensuring that NIH attracts 
these young investigators. Why is that so important and what 
does this new innovator award do to accomplish that?
    Dr. Zerhouni. So it is an award for really deep innovation 
by individuals who are less than 10 years from their doctoral 
degree. So it is the individual between 30 and 40 who is really 
trained, understands the issues and has a new idea. What 
happens if you do not do this in a period of constrained 
budgets, people become very conservative. They really don't 
want to present high-risk ideas because they are afraid that 
there won't be enough basis to be supported. So we want to 
dedicate dollars to those individuals. That is what you have to 
do in periods of stress when less than 20 percent of our 
applicants get funded.
    Mr. Pallone. And then one of the concerns I always have, 
even constituents will mention this if they are familiar with 
NIH, is that the translation from discovery to patient care. In 
other words, you have the basic biomedical research, which is 
what we think of NIH doing, but it has to translate into, you 
know, research to the patient's bedside. Do you want to comment 
on that at all? And again, given the new changes and the lack 
of funding how you deal with that.
    Dr. Zerhouni. That is a crucial question, Mr. Chairman. You 
are putting your finger on probably the weakest, most difficult 
link to manage that we have. Let me show you, let me just tell 
you that if you look at the productivity of the pharmaceutical 
industry in terms of new discoveries, it has gone down even 
though the pharmaceutical industry spends twice as much as NIH 
on research. What really needs to happen is an integration and 
a reinforcement both of our basic research according to what I 
showed you, which is understanding these complex connections, 
but understanding these complex connections cannot be just 
understood in the lab, they have to be understood in patients. 
Well, over the years what has happened is that it is more and 
more difficult to connect the basic scientists with the 
translational scientist who is going to do this and vice versa. 
So that response has been one that came from the ability to 
have a Common Opportunity Fund to make sure that the system 
does not come apart. It is not funding bench to bedside 
research alone. It is really to fund all of it. We believe that 
at NIH, about 60 percent of our budget should really be 
dedicated to basic discoveries but 40 percent should be applied 
research, and that applied research needs to focus on that 
translation in addition to all of the other things we do, for 
example, in vaccine development and so on. It is the 
connectivity that is the issue between those fields and the 
disciplines, unless you break the barriers, are not going to 
work with each other. And NIH's programs are designed to glue 
these components of the discovery process.
    Mr. Pallone. Is there anything that you suggest that we do? 
I mean, obviously today is not just about the past but about 
the future. Do you have any ideas for what we could do to deal 
with that problem or to make it easier?
    Dr. Zerhouni. I think that if you really analyze the issue, 
NIH has taken the lead in terms of creating a home for 
translational science in conjunction with basic sciences. It is 
not exclusive of each other. In fact, we are trying to build 
the bridges here. But if you really think about new, young 
physician-scientists who are critical to this process, they are 
being run ragged, let us say, because the clinical service 
demands in their institutions are high, their training demands 
are high. They don't have the time to dedicate, and Dr. Burgess 
probably knows that very well, to 100 percent research at the 
translational edge. It is important if we are going to do this 
to find a way of funding these early-stage investigators not 
just through NIH but through Medicare, through Medicaid, 
through whatever R&D source we need to sustain that class of 
individuals, Ph.D.s and M.D.s who are dedicated to accelerating 
our discoveries in the human population. It is at risk. If you 
go to academic health centers, you will see that many 
departments are losing their best talent because we don't have 
the ability to sustain them at the right level. So that is what 
I would do. I would say, you know, preservation of the 
clinician scientists of the future, the next generation of 
scientists is a fundamental issue.
    Mr. Pallone. OK. Thank you very much.
    Mr. Deal.
    Mr. Deal. That was a very impressive presentation. I am 
glad that we got to hear the full explanation of how you linked 
all this together. I think that is one of the best 
presentations explaining complex matters that I have heard.
    Let me ask you this. Given that certain disease-specific 
research proposals receive significant private funding, and I 
use the example of the telethon-type environment that we saw 
that was very successful for the cancer society last week, does 
NIH consider this fact, that is, the amount of privately raised 
revenue in making a decision as to what proposals will be 
funded within the NIH budget? In other words, how do you 
reconcile those two streams of funding?
    Dr. Zerhouni. Right. So this is a very good question. The 
real question is, is that extra funding sustaining something 
that is very critical or is it just duplicative? That is the 
issue. And when we look at it in different fields, we realize--
for example, cardiovascular research. If you look at all of the 
impact we have had on mortality, which has dropped 70 percent 
both for heart disease and stroke, you realize that we spend, 
every one of us, every American spends about $4 a year on 
cardiovascular research. If you look at cancer research, all of 
us spent about $9 over the past 30 years in the war on cancer, 
$9 a year. Everybody will tell you that even with philanthropy 
plus private funding, that we are still below where we need to 
be, particularly in cancer, because of the growth of--I mean, 
it is becoming the number one, it is the number one cause. So 
what we are trying to do is coordinate with the private 
foundations. For example, now we share our databases on what 
grants were accepted, what grants were not accepted so that we 
don't duplicate efforts. We have a transparent system with not 
just the cancer society but all funding agencies now. We open 
up through this transparent process our own databases for 
grants. That is one. The second is, we believe that because of 
this issue of early-stage investigators, that these private 
efforts are very important to maintain the next generation of 
scientists to be able to work on cancer, work on other things. 
I don't have that ability at the scale I would like it and so 
that is very important. So we work on two things: creating new 
talent, innovative talent, new people, new scientists and 
making sure we don't duplicate. Let me just assure you that 
with all of that, if you look at the productivity of pharma-
spending twice as much as we do and not coming up with many, 
many targets, it tells you that more science according to the 
lines of what I described is going to be the key and that means 
more investments in people, talent, resources.
    Mr. Deal. I am sure that every other member of this 
subcommittee, like I, continue to receive requests from 
disease-specific groups for targeted legislation that would 
fund their particular disease, recognizing that some diseases 
obviously receive more outside funding than others. In order to 
balance your research among all disease-specific research 
proposals, would it be beneficial to establish a separate fund 
for less privately funded research proposals to ensure that 
they get adequate representation in the overall process of both 
private and publicly funded research?
    Dr. Zerhouni. I think so. I think it is a good idea to have 
more open communications with the patient advocacy groups. I 
don't think it is a good idea to basically through different 
pressures to say, well, X goes to Y and Z goes to Z. Disease 
specific--what you understand as a disease today may be 
completely different 5 years from now, and diabetes is a good 
example. What we understood the disease to be 10, 15 years ago, 
a lack of insulin, now we understand in type 2 diabetes that it 
is really not the lack of insulin that is the problem, it is 
the resistance to insulin. Things change. So my sense would be 
that through this new division that we are implementing to have 
that conversation of coordination and prioritization openly and 
transparently and not just through back channels and try to get 
separate legislation for each one. That only fragments the 
effort and it really, I think, disequilibrates the scientific 
progress.
    Mr. Deal. Well, I know that all of us are under that 
pressure and I think the fact that you have done such a good 
job of using the tools that are at your disposal under the 2006 
Act has made it easier for many of us to resist those private 
groups saying we want you to just focus on us, and I wish that 
many of them could hear the explanation you have given us about 
how integrated all of the research really is. I think it would 
make them feel better if they really thought that they weren't 
totally being left out of the equation.
    Thank you very much for your testimony today, and I yield 
back.
    Mr. Pallone. Thank you, Mr. Deal.
    For questions, Ms. Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman, and Dr. Zerhouni, thank 
you for your outstanding presentation--cogent, highly 
instructive, encouraging, and it is an eloquent statement about 
your leadership at the NIH. I have always thought that this 
committee's jurisdiction of NIH is really the crown jewel of 
Energy and Commerce and I am very fond of saying to my 
constituents that NIH stands for the National Institutes of 
Hope, and I think that what you have presented to us today in 
detail is that much hope is being realized as a result of the 
legislation and so kudos to you, certainly to the ranking 
member of the committee when he was chairman as well as the 
rest of the committee for far-reaching legislation that ha 
brought us to what you presented to us today.
    Now, earlier this year Dr. Zerhouni came to my 
congressional district, flew across the country to come to 
Stanford University where we had really an inspiring forum on 
technology and innovation and healthcare. At that time you 
reiterated many, many times the importance of a really clear 
vision for the future of healthcare and medicine, looking 
beyond managing the present and really protecting the future. I 
hope I am bringing some credit to the breadth of what we were 
attempting to examine that day, and I think that you said at 
the forum that we can't be short-term wise and long-term 
foolish. When 75 percent of our healthcare expenditures are 
related to chronic diseases, it raises the question of how do 
you think the NIH Reform Act addresses these long-term goals. 
That is my first question.
    My second question is, having examined the efficiency now 
of being able to bring translational interpretation to what NIH 
is doing, I also know, we all know that it isn't any secret 
that the NIH needs more funding. The dollars will have the 
potential of fueling what you are doing. The fewer dollars 
there are, the harder it is to make progress even under the 
best of reorganization, and I think this is the best of 
reorganization. You gave us a statistic in February that for 
every year the NIH falls behind in terms of inflation and 
deinvestment decouple the NIH by $1 billion. We lose 6,000 
scientists. I think these figures are correct. If they are not, 
I want you to correct them. It takes 20 years to train these 
6,000 scientists. That is 120,000 years. I mean, that just 
takes my breath away. It should take all of our breaths away. 
It takes $100,000 to train scientists effectively and that is 
$12 billion. So taking two steps forward and one step back I 
don't think is an effective way to fund the NIH. So my question 
is, when so much of our healthcare costs go toward managing 
chronic diseases, do you think that increasing--I guess it is a 
softball question, but it is the big question because I would 
like to see, as we have decoupled the bureaucracy from what 
needs to be done and gotten rid of the silos, and you have made 
the most magnificent presentation to us of the overall funding 
at the NIH is not where it should be. Tell us where you think 
we should go from there and how we do it.
    So those are my two questions, and thank you again for your 
leadership. It isn't very often that we come to a hearing and 
leave, I think, on a high. But what you presented today is so 
encouraging and so hopeful for humanity, so thank you. 
Congratulations on your grandson's first birthday and taking 
his first steps on his own in life.
    Dr. Zerhouni. Thank you. It happened just after the NIH 
Reform Act.
    Ms. Eshoo. Well, good for us.
    Dr. Zerhouni. First of all, thank you for having really a 
very good recall of our conversation there. I think what is 
essential is to understand the long-term impact of short-term 
decisions in something like science and health, which really 
goes over a long time. You don't train a scientist overnight. 
You train them over a long period of time. Once you have lost 
them, you have lost them. So the point I was making is 
sustainability and predictability of funding is essential, to 
have the talent to tackle the problems of chronic diseases. 
That is number one. So having these ups and downs, and the 
number I gave you is correct. In other words, if you really 
look at the impact, at the end of the day some people will have 
to leave the scientific workforce and they are. So we have 
young people right now who choose other careers because of the 
unpredictability. So predictability and reasonable inflation 
corrected rate of growth, is essential for anything. And that 
in science is even more important because you are talking about 
a 20-year cycle to train someone. And you have made all that 
investment and all of a sudden they go. So you need to sustain 
that.
    Second, I have to give credit to my colleagues at the NIH. 
They all realize what is happening in science. They are the 
best of the best and truly have come together. So I will give 
you some examples beyond the Reform Act. Neural sciences and 
mental health issues are going to be very important to the 
chronic-disease burden of the country. Depression, as Mr. 
Murphy mentioned, is going to be a real challenge in the age 
between 25 and 44. So all the institutes that have to do with 
neural sciences came together for what is the NIH Neurosciences 
Blueprint. They came together spontaneously and said let us 
just work across that. As an example, they came then to the 
Common Opportunity Fund and said, the key to chronic-disease 
management is going to be behavior change, how do you change 
the behavior and how do you comply----
    Ms. Eshoo. It operates like a venture capital fund, doesn't 
it?
    Dr. Zerhouni. Exactly. It is a venture capital fund. So 
they came in and guess what? We have an initiative called the 
Science of Behavioral Change, because we realized we don't 
really know how to change people's behavior. So that is an 
investment that came from that concept of, how do you manage 
chronic diseases. The second is obesity. There is a trans-NIH 
obesity research plan. As you know, if we do not tackle this 
issue as a society, it is likely that life expectancy will 
decrease again. So we really want to work on these issues. But 
that is not just a NIH topic, it is a societal topic. But how 
do you get the people who are going to do that in a time where 
every year you tell them, well, your chances of getting funded 
are 20 percent, 15 percent, 10 percent. If you are a smart 25-
year-old and you say I am going to work 10 years to finish my 
training in science, by age 35, like my son, have a child and 
try to get a job and then I am told, well, next year the budget 
may be this, may be that, you may get it, you may not, and then 
you don't get your first grant by age 42, it becomes daunting. 
So we have a fundamental issue. If you want to tackle chronic 
diseases, which are 80 percent of the cost, you have to have 
the workforce for it. Look at the issue of geriatrics. These 
are specialists who take care of the aged population. The 
number of geriatricians trained is actually going down at a 
time when the aging population is exploding. This is something 
that needs to be thought about and this committee really needs 
to look at the intricacies of how that happens. NIH is just the 
head of the fountain, but if there is no water in the fountain, 
trust me, you won't be able to solve the downstream problem.
    Ms. Eshoo. Dr. Zerhouni, I want to work with you on 
legislation that is going to address this so that it is shaped 
and modeled to appeal regardless of what side of the aisle 
members may be on because this is, I think, one of the major 
areas for us to address and it is for future generations. We 
cannot have the spigot shut off. The costs are too high. We 
know what the challenges are. The best news today is, is that 
we can seize these challenges and really leapfrog way into the 
future. But we have to make sure that we have the appropriate 
funding stream that sustains and that it is not stop-start. So 
I want to work with you and with all of my colleagues on this, 
and thank you again for your brilliance and your leadership. 
This is a terrific hearing. Thank you.
    Mr. Pallone. Thank you.
    Mr. Barton.
    Mr. Barton. Thank you, Mr. Chairman.
    Thank you, Dr. Zerhouni. I appreciate the biennial report. 
I had it in the old form, the book, and I just got this. I need 
a port to put this in my brain. My problem is, my brain is 
analog and this is digital, so if you will have your scientists 
work on a way to input this directly, then I will see if we 
can't get funding for it. I do appreciate it.
    I also want to compliment you on your kind words for me in 
your opening statement. You would think that you and I are 
related because you say nice things about me and I say nice 
things about you. As far as I know, there were no Zerhounis in 
Hill County, Texas, and I doubt there were very many Bartons in 
your neck of the woods, so we are not related, so this isn't a 
brother-in-law deal where we--like county commissioners 
sometimes get involved with.
    You have done an outstanding job in implementing this 
Reform Act and it truly is reform and it truly is 
transformational. You paint such a positive picture. If you are 
even 60 percent correct, it is amazing what has happened in the 
last 2 years. I mean, it is really stunningly amazing what this 
Act has done. I wish that Chairman Dingell were here and 
hopefully he is watching and I know how busy he is and 
hopefully he is watching in his office on television the 
hearing because we intentionally set up the Act when we passed 
it 2 years ago to be a 3-year authorization. It has been 2 
years so next year, 2009, we need to reauthorize the NIH if we 
want to continue the progress. So it is important that we have 
this hearing.
    Now, my first question is, we required in the Act the 
establishment of an electronic system of coding to uniformly 
code research grants and activities so that they would be 
transparent, not only within the NIH but also to the public. 
This is a mandatory coding requirement and it is not voluntary. 
Could you comment on the implementation of this mandatory 
coding system and how it is being received and what the status 
is of it being fully implemented NIH-wide?
    Dr. Zerhouni. Right. Dr. Krensky, who is the head of the 
Office of Portfolio Analysis and Strategic Initiatives, is here 
and has worked almost 2-and-a-half years. The first question 
that we resolved was, do we use manual coding, do we use an 
army of coders and then provide that to Congress like we have 
in the past in the 260 categories. We consulted widely, and it 
was very clear that in the age of Google, where you can have a 
search engine that can go in millions and millions of pages, 
that can extract information and present it to you, we thought 
we should adopt as a federal agency something that is the wave 
of the 21st century, and that is what we call knowledge 
management software. So all of the NIH system has been 
developing around this concept that you develop software and 
then you go into all of the grants and you identify through 
these automated search engines what it is that relates to 
diabetes or cancer or whatever you are looking for, and then 
you post it. In the past we had a judgment staff. People would 
say, well, this grant is 10 percent this, 20 percent that, and 
that is why advocacy groups were very frustrated with us and 
that is why you heard about the complaints of the advocacy 
groups saying we are not getting good information here, we 
don't know where the information is coming from, how is it 
analyzed. So we decided to embrace the 21st century for 
information management and it is a real, real breakthrough in 
terms of our ability to manage our portfolio. It is new, it is 
novel. The problem is that it doesn't give you the exact same 
results you used to see, and for institutes that had a long 
history of coding their own data according to their own 
priorities, it does present a problem, and how do you reconcile 
the new information with the old information the way you used 
to and how do you manage the coding that was there.
    Obviously the new system is going to be evolving and it is 
not going to be perfect the first day. But how do you explain, 
for example, that an institute would have said, well, I am 
spending $100 million on this and our system searches this and 
says well, no, it is $80 million. How do you do the transition? 
So some institutes have had difficulty with that, especially 
when you realize that the Reform Act gives the obligation to 
NIH to report on everything.
    Mr. Barton. Well, is it a technology difficulty or a human 
reluctance to implement?
    Dr. Zerhouni. I think it is both. I think it is obviously 
cultural and control of information but also the sense that 
what these results are, this is a new system, knowledge 
management. What is that? Google search of your grant portfolio 
and then you are going to make that public and everybody can go 
in and say, gee, why is this grant here and not here? So you 
end up with a tremendous cultural change of----
    Mr. Barton. Would it be helpful if we gave some incentives 
to those institutes that meet the coding requirements sooner 
than others, or if you want to be punitive, disincentive to 
those that don't so you get more money next year if you are 
fully coded and implemented or less if you are not?
    Dr. Zerhouni. I think this is so new, what I would do is, I 
would get the Scientific Management Review Board to look at 
that and to say, well, are we achieving our goal. Now, I will 
give you the statement that says don't think you are going to 
be happy day one. No one is going to be happy day one. But over 
time we will improve that.
    Mr. Barton. But if you had to put a percentage in terms of 
meeting the mandatory requirement for coding, would you say 
that overall the NIH has 70 percent implemented it, 50 percent 
implemented it, 25 percent?
    Dr. Zerhouni. Right now?
    Mr. Barton. Yes, sir.
    Dr. Zerhouni. Oh, 90 percent.
    Mr. Barton. Ninety percent?
    Dr. Zerhouni. Ninety percent, yes. We have absolutely no 
issue. The only issue is when you want to go deeper in an area, 
how do you do it. So my decision was, look, you can report your 
coding as your coding. It doesn't comply with the Act but for 
the transition period I am find to see how you would walk the 
community through what the RCDC numbers are and what yours are 
as long as you are transparent. The problem is, in the past, we 
have had an issue, for example, in health disparities. Three, 4 
years ago we had a scathing report from the National Academy of 
Sciences and when they re-looked at the source of the coding, 
they disagreed with our coding. So that is why the RCDC exists. 
That is why you have mandated it. And we are embracing it. I 
think at this point it is a matter of watching it for a while. 
I wouldn't decide to be punitive until I see it a little more. 
But I think the Committee and you as the governing oversight 
board have to stick to the line that we need an accountable, 
transparent automated system that can be followed over the 
years. Don't change the rules on me every 6 months, which is 
what the problem was. You cannot manage something you don't 
reliably know. This is the attempt to have the portfolio 
understood consistently and reliably.
    Mr. Barton. Mr. Chairman, I know my time has expired. Are 
we going to be allowed to ask additional questions?
    Mr. Pallone. I wasn't planning on having an additional 
round, Mr. Barton. I mean, if you want to ask----
    Ms. DeGette. Mr. Chairman?
    Mr. Barton. No, I know the other people have waited a long 
time so I would just hope that after everybody asks one round, 
I am going to ask unanimous consent at that time if I could ask 
a few additional questions because this is my one shot to 
really focus and I appreciate the hearing but I don't want to 
abuse the prerogatives of the other members here.
    Mr. Pallone. OK. Ms. DeGette.
    Ms. DeGette. Thank you, Mr. Chairman. I was going to ask 
unanimous consent to give Mr. Barton 5 more minutes, but I will 
just go ahead.
    Dr. Zerhouni, I always hate to use cliches about elephants 
but there is an elephant in the room and it is really the level 
of funding for the NIH. I want to explore that a little bit 
more in depth with you than just obviously the NIH could use 
substantially more resources. But I want to drill down a little 
bit with that, because what really struck me with your 
presentation, aside from the overall brilliance, were these two 
slides you had about the genome-wide association discoveries, 
how in 2005 you got this little blip and then by the second 
quarter of 2008 you had an explosion of discoveries. And I am 
wondering if you can describe for me if, for example, Congress 
made the kind of commitment that we had back in the 1990s, 
which was to double the NIH budget, if we made that kind of 
real commitment in the next term of Congress, what could we do 
from a concrete research standpoint to take those genome 
discoveries and move those along in your next matrix towards 
translation diagnostics, prevention strategies and 
therapeutics?
    Dr. Zerhouni. I think personally that there are three 
priorities that need to be taken care of. First is the issue of 
the workforce. I think Congresswoman Eshoo was saying we should 
have a conversation about this. I think we need to have a 
conversation about that. I am very concerned. We have made 
projections. We are seeing the aging of the scientific 
workforce and we are seeing the absolute number of new 
investigators who come in not growing at the rate I would like 
it to grow. So the first thing we need to address is, how do we 
sustain the new generation of scientists who are going to solve 
these problems when we know the scope of the problems and also 
the scope of opportunities is much greater than it was before, 
and that is----
    Ms. DeGette. Well, and just to interrupt you, the other 
problem, you know, I have a daughter who wants to potentially 
go into research who is a sophomore in college, and I look at 
her peers around her--it is not just the labor pool, it is the 
amount of debt burden these kids are going to have when they 
come out of their postgraduate programs.
    Dr. Zerhouni. That is right. So you need to almost have a 
conversation that is way beyond NIH, the United States science 
and technology workforce trends and strategies to make sure we 
are competitive as you see the growth outside of the United 
States. We need to tackle that at the early entry stage. You 
don't have the bright minds to solve the problems if you don't 
take care of them at the beginning. So that I think is 
priority.
    Ms. DeGette. And what do you mean concretely by that? Do 
you mean debt relief from loan relief and also salaries?
    Dr. Zerhouni. I am not sure that I would be willing to say 
it is X, Y, or Z. I think we need to--it is a systems approach. 
You really need to look at it from science education all the 
way to funding. But you need to focus on that issue and perhaps 
you need to identify resources that are unrelated to whether or 
not inflation you say we have to invest in the talent pool 
first.
    Ms. DeGette. I just might say on that, you might get your 
staff to work on some ideas more concretely around what those 
funding levels would look like and what we need to do.
    Dr. Zerhouni. We have, and I am happy to share that for the 
record, if you wish, to tell you what our projections are. We 
have had long conversations across all institutes on this 
issue. The second is the issue that Chairman Pallone was 
raising and that is, you know, how do you sustain over time. I 
think predictability is very important there. So you can't in 
this sort of environment make ad hoc decisions. You need to 
really have a long-term plan, and the problem that we have is 
that it is hard to make long-term plans for anything. So one of 
the issues that I see in science management, not just NIH, is 
how we decide strategic investments that are more than 1 year 
or 2 years at a time, and how do you sustain that.
    The third is very simple. As you think about it and you say 
what is it that really would stabilize the system, it is the 
success rate. And if the success rate goes way below a number, 
then you have a difficulty in sustaining the effort. People 
adapt to the new science. We have changed the kind of science 
we do all the time. NIH has been terrific at doing that. The 
problem is that if you do not have a reasonable success rate, 
you lose your talent pool. So what is a reasonable success 
rate, right? You are going to ask the question. I have thought 
about this for 6 years and I will tell you what the answer is. 
On average, we give a grant for 4 years, which means that if 
you are going to get renewed and maintain that research, you 
need a 25 percent success rate because you are going to renew 
it every 4 years, and if you don't have a quarter success rate, 
that is the bare minimum to just stay level. If you don't 
ensure that, you are losing. Ideally, you would want to sustain 
what you have and then fund those new ones, right?
    Ms. DeGette. Right, right.
    Dr. Zerhouni. Which means that your success rate has to be 
above 25, and historically, we have done extremely well in 
terms of adapting to new science when we are around the 30 
percent range. So that is my technical opinion. Obviously that 
has implications. But those are the three things: new 
investigators, sustained success rate, and a predictable long-
term path to investing in long-term issues that we deal with.
    Ms. DeGette. I think as we move into the rest of the fall 
and since Congress will be leaving soon, it would be extremely 
helpful if your team could start to put some thought on price 
tags for that because when we come in to the next Congress, I 
think one thing we are going to be trying to look at is how we 
can commit ourselves to really making progress with these 
exciting new research breakthroughs that we are seeing, and in 
large part I think because of the Reform Act.
    I just want to ask, you know I couldn't have you come here 
without talking to you about stem cell research, so I had my 
staff pull the budgets for stem cell research, and you know 
this as well as I do, the total stem cell research budget at 
the NIH for fiscal year 2007 was $650 million. Forty-two 
million dollars of that was for human embryonic stem cell 
research and the rest of it was for adult stem cell research, 
placenta, umbilical cord, et cetera. I am just wondering if 
that level of research dollars is really enough to sustain 
robust research, given some of the discoveries we have seen 
both in the private sector and around the world, or if it would 
really be helpful to get more dollars and of course less 
conditions?
    Dr. Zerhouni. I asked myself that question, and as you 
know, we do not have a cap on dollars to fund human embryonic 
stem cell research. There is absolutely no limit. If you have a 
good proposal, they come in, we fund them if they pass review. 
What you see out there is, we fund pretty much all the good 
proposals that we get in human embryonic stem cell research but 
they have to do them with the stem cell lines that we have, and 
some researchers just don't feel that those lines are now 
appropriate for looking at the issues. What are the issues they 
are looking at? As you know, we have made great progress in 
induced pluripotent stem cells, adult stem cells. The other 
$610 million is invested in those areas. But let us remember 
one thing: Dr. Thompson from Wisconsin could not have made his 
breakthrough in understanding how to create induced pluripotent 
stem cells that are not human embryonic stem cells without the 
human embryonic stem cell research he has done. That is how we 
discovered the factors that take an adult cell and transforms 
it into pluripotent stem cells. So a lot of researchers are 
saying look, I understand the very first step to make something 
pluripotent, I still need to understand how it becomes a neuron 
or heart cell--I am simplifying--and a diabetes cell. We have 
had great breakthroughs over the past months and year so a lot 
of scientists are focusing on that. They are not really looking 
at embryonic but they are going to come back and say now, next 
step, I found the first four factors, what are the next five or 
the next 10 that do that. So I think you are going to see an 
up-and-down requirement for that funding but a lot of them fund 
that through private sources obviously.
    Ms. DeGette. A lot of them, they think that pre-2001 cell 
lines are not effective so they are funding their funds for 
that research somewhere else.
    Dr. Zerhouni. I have a diversity of opinion on that. Some 
people still use NIH stem cells and say that they are useful. 
Others say no, I really want to study new stem cells with new 
methods to look at the genes, how they are expressed so I can 
learn what factor. The goal right now is that people don't want 
to use embryonic stem cells in the long term. They want to 
really find the factors and then reprogram adult cells in the 
individual. That is the dream. It is not to take human 
embryonic stem cells. So I think that we need to fund all 
avenues of research. I think the $42 million is just the fact 
that you have that many researchers making good proposals. We 
have no bias in terms of one or the other.
    Ms. DeGette. No, no, I know. Thank you.
    Mr. Pallone. Thank you.
    Next for questions, Mr. Murphy.
    Mr. Murphy. Thank you, Mr. Chairman.
    A couple areas here that I just want to let you know, a lot 
of my constituents have been talking lately about multiple 
sclerosis and cystic fibrosis and hoping that those areas are 
recognized, that a lot of major breakthroughs are coming 
through, and my hat is off to you and NIH and people who are 
doing the important research in that, and as those are chronic 
conditions, it leads me back to the discussion I had in my 
opening comments, and that is, in the areas of neural science 
and human development, which are part of the categories we look 
at here. You mentioned the key to disease management is 
behavior change. Could you elaborate on what you are finding 
with that?
    Dr. Zerhouni. Right. So as we analyze the issue, we have 
deep conversations within the Office of Portfolio Analysis and 
Strategic Initiatives, this process that we now have, and there 
was a consensus that although we fund behavioral sciences, that 
we needed to have a more basic understanding of the science of 
behavioral change. We had papers that came out showing that if 
you understood that, you could actually change the proper level 
of control of blood sugar, for example, in diabetes. How do you 
maintain that? How do you encourage that behavior change and 
sustain it? Clearly, it is the key to chronic-disease 
management in what you could call non-communicable emerging 
diseases like obesity and heart disease and so on. We basically 
decided to invest in more fundamental research. I don't have 
the answer. I can tell you some anecdotes of what we are 
thinking about. We know, for instance, that if you look at 
public health measures, typically a passive public health 
measure works a lot better than an active public health 
measure. Let me be specific. If you look at seat belts, that is 
a public health measure. It took 50 years to get to 85 percent 
compliance. I mean, we knew about seat belts in the 1950s. That 
is an active act. It is a very simple one. It doesn't cost you 
anything, it is in the car, and yet you have difficulties in 
implementing it.
    Mr. Murphy. I would like to sit down with you, if I could, 
and spend a lot of time on this. With my background in 
psychology, I would like to follow up on that. I have a lot of 
questions, and I will submit more for the committee too. I 
would also like to know if it is OK with the chairman, I would 
like to yield the remainder of my time to Mr. Barton so he 
could follow up on some questions with you too.
    Mr. Barton. I will wait until the end. I will let every 
member ask their questions.
    Mr. Murphy. In that case, then I yield back, because I 
would like to follow up in excruciating detail with you.
    Dr. Zerhouni. That is great, but I think you are on the 
most important issue, Congressman.
    Mr. Murphy. Thank you very much. I yield back now, Mr. 
Chairman.
    Mr. Pallone. Next for questions, Ms. Schakowsky.
    Ms. Schakowsky. I have a question that is about a couple of 
specific programs. There was a $52 million cut to end the 
national children's study over Congress's objections and I have 
heard from medical researchers and academics as well as 
families that are very concerned about this study, and I 
wondered if you know why the Administration wants to end this 
funding, what kind of data would be eliminated if the President 
succeeds in cutting the funding.
    Dr. Zerhouni. Again, this is an issue of priorities. We 
looked at that study 3 years ago. It is a $3.2 billion study. 
Because of the other issues that we had to deal with and the 
flat budget, we thought that allocating that much money in 
these days, including the support of the National Institute of 
Child Health and Human Development, that the timing was not 
right and the priorities were different in terms of what we 
needed to dedicate dollars to.
    Ms. Schakowsky. It just seems like it is so in line with 
the kind of priorities that you said doing this kind of 
longitudinal study beginning now of children, the environmental 
impact that cause disease. It seems like a real missed 
opportunity to get started in this kind of comprehensive look 
at what is affecting our children. It is disappointing.
    I wanted to ask you about brain drain, about some 
researchers. I talked to one that was going to Dubai to look 
for funding, and if there is the feeling because not only the 
ability to recruit new investigators but we have heard that--it 
is not just not getting grants but that the grants have been 
cut in size, that some important research is going overseas to 
various countries.
    Dr. Zerhouni. I hear that. On an anecdotal basis, yes. Then 
we look at the tracking of the numbers, we are not seeing an 
exodus of major scientists leaving. I mean, they would stay 
here. But it is true that we have had to be very stringent on 
increases in the budget so we have had, for example, no 
inflation for several programs, and when you look at that, the 
scientist has a choice: find new sources of funding, either 
through the private sector, or in many cases let people go. 
That is where the number 6,000 scientists leaving the workforce 
comes from at a time when the pharmaceutical industry is not 
expanding. It is also downsizing. And that gives an opportunity 
for other countries to take some of the talent that we had 
developed here. I don't see it today as a major exodus of 
talent but I am very concerned about it, and we cannot go on 
hoping that that won't happen. It will happen if we do not pay 
attention. Other countries are increasing their investment in 
research. China, for example, has a program specifically 
designed to recruit scientists from the United States to China. 
It is good for science. I mean, it is great that those 
scientists are not leaving science, but I don't think it is 
good for the integration that we described here as necessary to 
make progress.
    Ms. Schakowsky. And the kind of continuity, I think that--
--
    Dr. Zerhouni. That kind of continuity, yes.
    Ms. Schakowsky. Tom Friedman wrote an article in the Sunday 
New York Times about innovation and promoting innovation as 
really being the future competitive comparative edge for the 
United States of America. You emphasize that as well, and I 
think a lot of us are concerned that we are losing these 
opportunities by a shortsighted view about the funding at NIH. 
I wanted to ask one other specific question. A few years back 
there were reports of senior officials at NIH receiving cash 
gifts from some of the same companies that received NIH 
funding. I wonder if you could tell us what ongoing measures 
your office has implemented to safeguard against unethical 
practices.
    Dr. Zerhouni. Right. Let me make sure that the record is 
clear. There were no senior officials getting money from 
anybody that was receiving grants. The issue----
    Ms. Schakowsky. Some researchers?
    Dr. Zerhouni. Researchers.
    Ms. Schakowsky. OK. Sorry.
    Dr. Zerhouni. At NIH, as you know, there is a firewall 
between the scientists who do research at NIH and the 
scientists who decide what grants get given. We have always 
maintained that firewall. I am not aware of a case in that--and 
Mr. Barton was actually overseeing that at the time where there 
was an official decision-making person who was getting that.
    Ms. Schakowsky. I appreciate the distinction.
    Dr. Zerhouni. Right. So now, in terms of scientists, we had 
undisclosed relationships that were not known to us that 
related to interactions with the pharmaceutical companies or 
others where, in fact, knowledge acquired through government 
resources, acquired through government employment, where it was 
used to gain private consulting fees and so on. We really 
tackled that in a very direct way. We just say that is just off 
limits. You can do it, we want you to work with industry, but 
on an official basis with a fully transparent agreement that 
know exactly all of the data. My philosophy is this: It is not 
all bad to work with industry. I mean, there are some good 
things that come out of it, especially when you are talking 
about new discoveries. The problem is the secrecy. So I want 
more sunshine in these relationships. You cannot manage what 
you don't know. So if it is not disclosed, how do you manage 
it? So that has been our philosophy. I think it has really not 
damaged NIH. Everybody predicted that our scientists would 
leave in droves. I think it has actually improved the ability 
to work with industry on a fair basis, understanding exactly 
what is given, what is received for what through formal 
overseeable agreements and peer reviewed through an independent 
conflict of interest committee.
    So I feel that actually the NIH internally has done a 
terrific job. I would like to thank Dr. Kingston, who is the 
deputy director and is the director of ethics. It is been hard. 
He has been unpopular. It has been difficult, but now people as 
they see what is happening in the rest of the world, which is 
moving real fast, are actually thankful to have more clear 
rules that they can employ without preventing them from 
interacting but it has to be on an official duty basis, not a 
private basis.
    Ms. Schakowsky. Thank you.
    Mr. Pallone. Mr. Burgess.
    Mr. Burgess. Thank you, Mr. Chairman.
    Again, Dr. Zerhouni, thank you for spending so much time 
with us this morning. This has really been a pleasure to have a 
hearing that is based on success and achievement and to hear 
one of the rare good news stories that we hear come out of a 
federal agency, so I thank you for your presentation this 
morning.
    You know, the subject of appropriations comes up, and I 
understood the philosophy of the Reform Act was to provide you 
with a stable source of funding over the 5-year authorization 
of the bill. There was a lot of discussion as we did the bill, 
was a 5 percent increase year over year satisfactory or would 
the rate of biomedical inflation erode that. But the sad fact 
of the matter is, I don't know what you got in the 
appropriations process last year. I think it was about half of 
what we had authorized, and then this year of course, we have 
done no appropriations work at all so I presume that means we 
write our IOU in a few weeks. You will get what you got last 
year. So that activity has undermined the intent of the Reform 
Act of 2006, has it not?
    Dr. Zerhouni. Well, in terms of priorities and choices to 
make, they were a lot harder, and as I said, there are still 
remaining areas of concern. The good thing is that the 
appropriators, after you passed the Reform Act in 2006 and the 
joint resolution, decided to fund entirely the Common 
Opportunity Fund. So that is no longer coming out of 
institutes. It really removed the friction there. But since 
then, things have been relatively flat for everyone. So it is 
really managing and making tough calls and priorities that has 
happened. Clearly, we would really be much better served not to 
have enormous increases one year and nothing the next, but have 
a predictable curve.
    Mr. Burgess. And again, it is a shame with all of the work 
we did on that that we didn't manage to follow through with the 
appropriations process. For your sake, I hope we do our job 
better in the future because I think that is so important.
    You know, you talked about some of your templates for 
success, your benchmarks for success, and I just can't help but 
wonder, because in this committee we deal with the FDA, we deal 
with HHS and the Center for Medicare and Medicaid Services, are 
there any templates that would work in your world that would 
also work in other words of federal agencies? Are there going 
to be ways to apply what you have learned with this very great 
story that you presented to us today to be able--you talk about 
paying for health and not just healthcare. Are there going to 
be ways that we can real world, real time translate that to 
other federal agencies and make it a two-translational process, 
not just within your world but other areas where you intersect 
with other federal agencies?
    Dr. Zerhouni. That is a very interesting question. I think 
the lesson that I learned is this: that typically Congress for 
good reasons makes decisions and appropriates in buckets. What 
is lacking--that makes strong fingers. Every bucket is a really 
strong finger. Everything you do is really justified. The 
problem is, you have these fingers but you have no palm. The 
mechanism that was created at NIH is a very experimental, 
innovative, new and working mechanism to create the glue. How 
you can translate that to other issues will resolve the issue 
that I hear all the time, in meetings with members, private and 
non-private, about how do we get more coordination, how do we 
get more synergy between the different areas of FDA, CDC, and 
frankly, that issue is inherent to the structure of how 
Congress authorizes agencies. I think thinking about mechanisms 
of gluing through maybe a common pool of resources that is 
managed jointly. That might be an experiment to expand, I 
believe. That is my personal belief. This is not an 
Administration view.
    Mr. Burgess. It is just a phenomenally interesting concept. 
One other thing, I just have to offer the observation, your 
slide where you showed the explosion of new information on the 
human genome, and of course, there are actually commercial 
applications out there that someone can go on the Internet 
today and have their genome sequenced for under $1,000. I mean, 
it is a phenomenal amount of information that we are putting at 
people's fingertips, so much so that the New England Journal of 
Medicine in one of its perspective articles a few months ago 
sort of talked about how does the average clinician now deal 
with a patient coming in and saying this is what I got, doc, 
what are you going to do. But it is truly a transformational 
time in medicine and I congratulate you for being able to be 
transformational in what is inherently a transactional process 
which is what we do here in the House of Representatives. I 
think we can all afford to be optimistic because of the work 
that you do, so thank you, sir.
    Mr. Pallone. Ms. Baldwin.
    Ms. Baldwin. Thank you, Mr. Chairman.
    You have had quite a few questions about the challenges of 
dealing with tight NIH budgets. I want to focus on one 
particular category of awards, the clinical and translational 
science awards, because that is a program that really leverages 
the academic expertise found in particular institutions to 
shorten the distance between the clinical research and the 
patient care. I have heard anecdotal information that some of 
the grants have been or the awards have been much lower than 
anticipated, and of course, a factor of tight budgets, but 
recognizing that you are working with those tight budgets, can 
you tell me a little bit about the strategy of continuing to 
find more sites with smaller grants rather than contracting a 
number of sites and having a more adequate award amount? And I 
know these are tough decisions, but I would just like to hear 
your thinking in making those decisions.
    Dr. Zerhouni. Yes, this was a tough set of decisions, and 
again, you have to balance what I believe is the mainstay of 
where discovery comes from, and that is investigator-initiated 
research. The real issue here is that we, through this process 
of analysis, that we go through now regularly, identified the 
need for re-engineering how clinical research and translational 
research is done. So the new program brought the investment 
from about $300 million a year to about $500 million in 2011-12 
when we get to full spending. The idea there is that these 
CTSAs will have access to other sources of dollars from the 
institutes. So that the fact the CTSA is leveraging investment, 
you give the ability to the institute to really play at a 
different level, and some institutes have done it. You will see 
that, for example, University of Wisconsin is a terrific 
example. They have the facility to do translational science 
better than many other institutions. So the question is, do you 
look at this as a leveraging investment that will then 
accumulate other investments on a competitive basis or not. It 
is basically a resource grant that you give with no questions 
asked. We had to make the cut and we said $500 million is the 
envelope because of the budget being so flat. We had to set 
that tone. Now, the number of institutions is another issue and 
this is going to depend on our analysis of the effectiveness of 
the networks as we have them. As you know, we funded 38. The 
number 60 came from the fact that we had a transition to manage 
between the old system to the new system. That decision is not 
fully made that we will go to 60. We will analyze it now that 
we have had 2 years of experience and that decision may be 
different downstream.
    Ms. Baldwin. You were just talking a little bit about in 
response to Dr. Burgess's questions about the palm that 
connects the fingers, and I know when we were discussing the 
NIH Reform Act last session, we were talking about the 
establishment of the new division of program coordination, 
planning and strategic initiatives, and there was some pushback 
from some advocates about how this would affect offices that 
were already conducting programs that crossed institutes and 
centers. So I am wondering with a little bit of experience now 
if you can talk a little bit about how the creation of this 
division has affected the operations of the program of offices 
such as the Office of AIDS Research and the Office of Research 
on Women's Health.
    Dr. Zerhouni. Very good question, and remember the time the 
controversy occurred. You know, some people said no, we want to 
keep this, and people want to keep their thing and it is a very 
difficult transition to go from what you have to a new world 
that may be better but you have no proof that it will be 
better. So we have been very careful. We have moved in steps. 
And remember the Act says to preserve the authority of these 
offices. So the Office of AIDS Research is so large, so 
intertwined already that there is not a lot of need. I mean, 
they are doing a good job and it is 10 percent of NIH budget, 
AIDS research, so they need to continue to do this. We don't 
want to disturb that. Other institutes, other offices that are 
smaller, then found this to be a great way of leveraging their 
institute so the Office of Behavioral and Social Sciences 
Research, OBSSR, has been a real participant, bringing new 
ideas and trying to leverage what they have and try to push the 
Opportunity Fund to go into the behavioral sciences area, which 
his what we have done. So you see a difference there. I think 
it needs to evolve slowly. You don't want to break what isn't 
broken sort of philosophy, but over time, it will from the 
bottom up. We have the Office of Portfolio Analysis and 
Strategic Initiatives. Dr. Krensky is the director and is 
working real hard. We are trying to over a period of 18 months, 
2 years then get to better integration, which will happen. So 
we have not touched the authorities of the existing offices of 
coordination because they are doing a coordination job that is 
decent in most cases.
    Ms. Baldwin. Thank you.
    Mr. Pallone. Thank you, Ms. Baldwin.
    The gentlewoman from North Carolina is recognized for 
questions.
    Ms. Myrick. Yes, thank you very much, Mr. Chairman, and 
thank you, Doctor, for what you presented today but also what 
you do in thinking outside the box all the time. We appreciate 
it, and I think you have pretty much heard everybody agrees and 
supports your efforts in looking for ways to make it better.
    Kind of following up on what Dr. Burgess was saying, you 
half answered what I was going to ask because I am curious 
about how the coordination between Department of Defense and 
Centers for Disease Control because we know money goes into 
those areas that is not actually NIH money, but you know when 
you are talking about research-related activities between the 
two, is that pretty much the palm when you said the bucket is 
in the palm?
    Dr. Zerhouni. Right.
    Ms. Myrick. And that is an area that we really need to take 
more seriously and see where we can expand on that relative to 
the value of the dollars.
    Dr. Zerhouni. So again, I am glad that you bring that up 
because I have had internal conversations about what we can 
learn. I think there are two things that I would share with 
you, and again, this is my personal opinion, it doesn't 
represent the NIH view.
    Ms. Myrick. I understand.
    Dr. Zerhouni. Two important components to this. One, don't 
create another layer. It is a mistake to create another layer, 
another institute that is going to coordinate everybody else or 
another agency that is going to coordinate everybody else. That 
is not the right thing to do. What I found very important is to 
understand the problem, allocate the dollars to it, but then 
have a streamlined decisionmaking process. But once you have 
made that decision, give the money to the agency best capable 
of accomplishing the task. So if we have a food safety issue, 
there should be some pool that doesn't get argued over for 24 
months while we have a food safety issue. Give the money to the 
FDA to solve that problem, then you recirculate those dollars. 
That is what we have. You know, the money in the Common 
Opportunity Fund is never allocated forever to one goal, it is 
every 5 years you have to rotate. That is the beauty, I think, 
of the Reform Act. It gave us, for the first time, the ability 
to just put money in a bucket and never get it out, which is 
the typical problem with federal programs: it never sunsets. So 
this gives you, I think, a more traditional mechanism to keep 
adapting and responding in record time. I have to tell you, 
some of the programs we launched this year, the Microbiome to 
look at microbes in all humans, A.P. Genome to understand how 
the genome is controlled, those happened in a matter of months. 
In the old days it would take 4 years to get that. So that is 
my observation, Congresswoman.
    Ms. Myrick. Well, we appreciate it, and I think most 
everybody would be willing to work with you on that to try and 
bring about change because it is most important that we keep it 
moving, and I also share the other concerns that were raised, 
some that Anna raised and especially the ones with young people 
going into science and how we coordinate all of that because we 
are so far behind the rest of the world, and you mentioned 
China. I mean, China is just--they are doing everything they 
can in every area to move their country forward and we are 
going the other direction, and that is very scary to me, but 
thank you very much.
    Thank you, Mr. Chairman. I yield back the balance of my 
time.
    Mr. Pallone. Thank you. Mr. Barton.
    Mr. Barton. Well, first of all, Mr. Chairman, thank you for 
the hearing again and thank you for allowing me the courtesy of 
asking a few questions. Dr. Zerhouni, I want to kind of go 
right at what would be the $64,000 question, if you remember 
that old quiz show from the 1960s. There are not many of us 
that watched it, but I can remember it. Three years ago, the 
big push for a new institute and a new funding priority was 
autism. We had major bills in both the House and the Senate and 
we did pass an authorization bill creating some new specific 
structure for autism and we also enhanced the funding but we 
did subjugate the overall re-prioritization to the NIH Reform 
Act. In this Congress, the big push seems to be breast cancer 
and environmental research. There is a bill that the majority 
of this committee has sponsored and there is a major push to 
add some specificity of prioritization for that very high-
profile and high-interest disease. My question to you, and 
hopefully we are at the stage where we are now as a Congress 
working to funnel these heartfelt requests for high-priority 
increases or at least re-prioritization to this new framework 
within the NIH. How would you think this new structure 
accommodate a Congressional and a stakeholder supported request 
for some sort of a re-prioritization of a specific disease or 
condition? Do you have an interagency task force mechanism or 
some sort of a mechanism with one of these new committees that 
instead of the Congress passing legislation, we can work within 
this new system to funnel this concern, which is legitimate. I 
am not downplaying the autistic concern of the last Congress or 
the breast cancer and environmental research concern of this 
Congress.
    Dr. Zerhouni. Right. These are valid concerns, I agree 
with. I think if you pay attention, I mean, autism--I have a 
friend with an autistic child--you know the pain, you know it 
is hard, you know it is difficult, and you know we need a 
solution and we need to understand it better. So the human 
response is typically a positive one. You want to help, whether 
it be breast cancer or--the problem is, how do you do it in a 
way that does not create a locked-in sort of self-fulfilling 
concept of research that really never leads to that progress. 
In the past, as you know, you create a new unit, you create a 
new structure that never, never adapts to how science really 
evolves. That was the past. I think the Reform Act capped the 
number of institutes and issues, which was a good thing. I 
think in the next situation we really need to think better 
about how to take into account valid aspirations of disease 
groups and fit them into a process at the NIH where we can 
really analyze that. So in the case of autism, as you know, 
there is an interagency coordinating committee that is going to 
come up with a strategic plan in November. Once we have that, 
that will fit in the discussion of these program coordination 
and strategic initiative group that we now have. The downside 
is, we only have 1.8 percent of the budget in that Opportunity 
Fund. It is hard to do when you have to commit grants to 4 
years, 5 years to an initiative. You can't change initiatives 
every other year, so you have to be steady. But at the end you 
recirculate the money in new priorities. That would be my 
recommendation, that maybe in the next situation or somehow 
that when a problem like this is identified, Congress will say 
look, we want you to develop a strategic plan, submit it to the 
priority-setting process of the entire agency if need be, or if 
it is very focused we can recommend, come back to you and say 
this really needs to be funded as a separate program.
    Mr. Barton. Under your current structure at the NIH, does 
the NIH have the ability if directed by the Congress either 
legislatively or informally through a letter signed by the 
chairman and members of the committee in the House and the 
Senate to create an interagency task force to focus on a high-
priority need that hasn't been as focused on in the past?
    Dr. Zerhouni. Absolutely. We do this informally.
    Mr. Barton. You have that----
    Dr. Zerhouni. It is not a formal process. It is an informal 
process. So autism, for example, we had already without the Act 
what we call the autism matrix where we identified what needs 
to be done. The real issue though is, how do you get to 
implementation but then you don't get into an implementation. 
We have created an entitlement forever in an area of research 
that will never be productive because things change. That 
flexibility is what I think the problem is in mandating things. 
I see the legislation that is coming down. Normally they 
mandate that we plan and we coordinate but they say oh, no, now 
we are going to appoint a committee that is going to tell NIH 
where to spend the money. That is an absolute mistake if we 
would go that route. Let me just be as clear as I can be. You 
should not separate the accountability and the authority.
    Mr. Barton. Now, as I said in my opening statement and as 
you have alluded to, this is a 3 year authorization bill. We 
are in the second year so we have got one more year. If 
Congress does its job, we should in the next Congress in the 
first year reauthorize for X more years so that we continue 
what we have done. What is the one thing when we do the 
reauthorization hopefully next year that we didn't do 3 years 
ago that we could do or should do next time around? If you had 
to point to one unfinished piece of business, what would that 
be?
    Dr. Zerhouni. OK. First of all, this issue that you raised, 
we need to do a little more thinking about how to help Congress 
and help NIH tackle this issue of valid rising concerns of any 
one kind or another. How do we do this without trapping 
ourselves in a rigid system where, fundamentally, if you do 
this then the NIH is going to look like special interests at 
the end, and that is not what you want. So that I think is a 
very good question. We need to think more about it. The second 
is clarification. Authorities across the institutes are 
different and it is sometimes ambiguous and I think the Act has 
to, I think, in my view, equalize all the authorities across 
the institutes. I mean, why would an institute have authority X 
and not another institute. I think those authorities are good. 
I am not saying take anything away. I think you need to really 
equalize them and so that you don't end up with games that 
really prevent one institute from doing something and another 
one--I think a level playing field in terms of authorities 
would be a good idea. I don't believe that any one disease is 
superior to another, and all of them are really integrated now. 
You know, you don't have a patient that suffers just one thing 
at a time so we have to really take into account the fact that 
health has changed and level playing field and look at that.
    The other is, I have to tell you, Mr. Chairman, I learned 
one thing. The way the process works does not allow us to do 
good medium- and long-term investments, 5, 10 years, capital 
investments. I am going to take an example from a non-NIH 
institute. The United States invests in long-term projects with 
other countries in fusion research, energy research, and with 
the process that we have, we have become an unreliable partner 
worldwide when we need to make long-term investments that are 
significant. That process, in my view, needs to be rethought. 
How do we make investment at NIH over 10 years' time for new 
capital, new resources, expensive resources? I can't do this if 
the next year I am going to be having a budget that is 
unpredictable so we need to have a management of long-term 
issues separately.
    Mr. Barton. I appreciate the chairman's patience with me. I 
want to end up on a very high note, so I want to ask this final 
question. You alluded in your comments to some breathtaking 
breakthroughs in research on diabetes. Do you believe it is 
possible, given the progress that is being made, that we could 
either cure diabetes in people that have it or prevent it for 
future populations?
    Dr. Zerhouni. Absolutely. I am totally positive about this.
    Mr. Barton. What about Alzheimer's?
    Dr. Zerhouni. That is a harder one for me to call. 
Diabetes, we can----
    Mr. Barton. Would you care to predict a time frame for a 
breakthrough on diabetes?
    Dr. Zerhouni. That is dangerous to do, not advisable. If I 
was beginning my tenure, I would absolutely refuse to do that. 
Now I can probably do it and get away with it. I would 
definitely say that in diabetes, we will have ways of 
preventing, if implemented, the development of type 2 diabetes 
in a large number of individuals.
    Mr. Barton. In how many years?
    Dr. Zerhouni. Ten years. Yes, I think it is clear. 
Alzheimer's disease, I have to tell you, I believe in the 
preemption approaches. I think it will take longer. It is not 
possible for me to see how we would reverse the progress of 
Alzheimer's disease. We can stop it. I don't think we will 
prevent it any time soon, 10, 15, 20 years maybe.
    Mr. Barton. Well, we are fortunate to have you as a public 
servant in the role that you play and we very much appreciate 
your attendance.
    Again, Mr. Chairman and Chairman Dingell, I really 
appreciate the scheduling of this hearing and the way it has 
been conducted, and I yield back.
    Mr. Pallone. Thank you, Mr. Barton.
    And of course, we are done today but I do want to thank 
you, Doctor, for first your presentation and answering the 
questions, and I think we did get the insight that we wanted to 
into what was happening at NIH and hopefully we can make some 
changes, although I still think the biggest problem is money 
and I guess I could say that about so many issues here. But 
thank you again. I guess I will mention that members may submit 
additional questions in writing. The way it works is, they are 
supposed to submit them to the clerk within the next 10 days 
and then we would notify you so you may get additional 
questions to answer and we appreciate the response.
    Thanks again, and without objection, this meeting of the 
subcommittee is adjourned.
    [Whereupon, at 12:20 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                      Statement of Hon. Gene Green

    Mr. Chairman, thank you for holding this hearing today so 
we may revisit and assess the progress of the NIH Reform Act of 
2006.
    The NIH, the world's leading biomedical research 
institution, is one of the great success stories of the federal 
government. Our investment in this life-saving research has led 
to advances that have profoundly improved the length and 
quality of life for millions of Americans.
    Information gained from NIH research is revolutionizing the 
practice of medicine and future directions of scientific 
inquiry.
    Without a doubt, the work performed at the NIH is 
invaluable. The groundbreaking research supported by NIH has 
provided a lifeline of hope to countless Americans living with 
diabetes, cancer, HIV/AIDS and many other illnesses.
    In 2006, this committee was led by a fellow Texan, Mr. 
Barton, who worked diligently on the NIH Reform Act of 2006. At 
that time Congress had not reauthorized the National Institutes 
of Health in more than a decade.
    The bill created a Common Fund, through which the Director 
of the NIH could support the important research that involves 
several institutes and centers at the NIH.
    The NIH Reform Act also ensured that this new Common Fund 
did not overshadow the important research being performed at 
the individual institutes and centers by stipulating that only 
50 percent of funding increases appropriated by Congress each 
year can be dedicated to the Common Fund.
    Unfortunately, nearly every year since the passage of the 
NIH Reform Act of 2006, the President has chosen not to 
adequately fund the NIH. Instead he has opted to ask Congress 
for meager increases in FY07 and FY08 and for flat level 
funding in FY09.
    These funding levels do not even cover the cost of 
inflation and show a lack of commitment to research at the NIH.
    I was proud to support the NIH Reform Act because my 
hometown of Houston is home to the world-class Texas Medical 
Center, which houses many facilities that conduct 
groundbreaking NIH research.
    The Baylor College of Medicine and Texas Children's 
Hospital conduct more NIH pediatric research than any other NIH 
grantee.
    The University of Texas's MD Anderson Cancer Center also 
conducts critical NIH research and is frequently recognized as 
the top cancer center in the country.
    I believe it is crucial that the NIH be appropriated 
adequate funding level by Congress so that NIH research 
performed at the Texas Medical Center--and other impressive 
research facilities across the nation--will yield continued 
contributions to our understanding of disease and the 
development of effective treatments to improve the health and 
well-being of all Americans.
    I want to thank Dr. Zerhouni for appearing before the 
Committee today. It is good to see you again.
    Thank you Mr. Chairman, I yield back my time.
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