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Executive Summary The continued growth in the number of organizational units of the National Institutes of Health (NIH) has been a cause of both concern and celebration for decades. Numerous NIH officials and external advisory committees have suggested that the continued creation of new units (institutes, centers, and programmatic offices) could impair NIH's functioning by making it unmanageable and impeding its ability to carry out its mission. Most recently, former Director Harold Varmus argued in a 2001 article in Science that NIH would be more effective scientifically and more manageable if it were organized into a far smaller number of larger institutes organized around broad areas of science. Others counter that the elimina- tion of units that focus on particular problems would reduce attention to and funding for these problems and that a consolidation of units would reduce congres- sional and public support and might not be politically feasible. More generally, recent rapid increases in resources, fundamental shifts on the biomedical frontier, and evolving health concerns make it a good moment to review whether the organi- zational structure of NIH continues to be appropriate. Clearly many changes have taken place in the world of science and in the nature of the health concerns that research must address. Since the late 1990s, the NIH budget has doubled to its current level of about $27 billion as a result of congres- sional and presidential initiatives. In science, the importance of multi-institutional, multidisciplinary research that relies more and more on large infrastructural invest- ments is ever more apparent. Demographics and the patterns of illness in society are changing, and the specter of intentional releases of harmful disease organisms by terrorists has emerged following the attacks of September 2001. The private sector's investments in some fields of research have increased to the point where pharmaccu-

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2 Enhancing the Vitality of the National Institutes of Health tical and biotechnology companies now spend more than NIH on research and development. With the steady stream of change, concerns about whether NIH has become too fragmented to address effectively the most important biomedical and health challenges or to respond quickly enough to health emergencies have resurfaced in Congress and in some parts of the scientific community. NIH has never been administratively reorganized in any substantial way, only added on to, despite vast changes in the landscape of science and the nation's health concerns during the last half century. CONGRESSIONAL REQUEST In report language accompanying the FY 2001 appropriation for the Depart- ment of Health and Human Services (DHHS), Congress directed NIH to have the National Academy of Sciences study "whether the current structure and organiza- tion of NIH are optimally configured for the scientific needs of the twenty-first century." Senate report 106-293 states: The Committee is extremely pleased with the scientific advances that have been made over the past several years due to the Nation's support for biomedical research at NIH. However, the Committee also notes the proliferation of new entities at NIH, raising concerns about coordination. While the Committee continues to have confidence in NIH's ability to fund outstanding research and to ensure that new knowledge will benefit all Americans, the fundamental changes in science that have occurred lead us to question whether the current NIH structure and organization are optimally configured for the scientific needs of the Twenty-first Century. There- fore, the Committee has provided to the NIH Director sufficient funds to under- take, through the National Academy of Sciences, a study of the structure of NIH. STATEMENT OF TASK In response to the congressional request, the goal of this study was to determine the optimal NIH organizational structure, given the context of 21st century bio- medical research. The following specific questions were to be addressed: 1. Are there general principles by which NIH should be organized? 2. Does the current structure reflect these principles, or should NIH be restruc- tured? 3. If restructuring is recommended, what should the new structure be? 4. How will the proposed new structure improve NIH's ability to conduct biomedical research and training, and accommodate organizational growth in the future? 5. How would the proposed new structure overcome current weaknesses, and what new problems might it introduce?

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Executive Summary The Committee on the Organizational Structure of the National Institutes of Health was formed to ensure that the views of the basic science, clinical medicine, and health advocacy communities were all adequately represented. In addition, the committee had members who are experienced in the management of large and complex organizations, including a former NIH director, two former NIH institute directors, a former university president, two persons with backgrounds in senior management of major industrial entities, and a specialist in organizational issues. Several Committee members also had considerable experience in government operations. The Committee held six two-day meetings over the ten months between July 2002 and April 2003. In its initial meetings it invited past and present representa- tives of Congress, NIH, voluntary health groups, scientific and professional societies, and industry to provide perspectives on the issues before them (see Appendix A). In addition, the Committee met publicly with the current NIH director as well as several former directors. Committee members and staff also heard presentations from or interviewed NIH staff in the offices of policy and planning, budget, finance, and intramural research, and met with directors of 18 institutes or centers. Data about NIH programs and budgets were requested from NIH staff as the need emerged. Prior reports conducted about and for NIH were reviewed, as was the relevant literature. In addition, the Committee commissioned a background paper tracing the history and evolution of NIH and its institutes as a starting point for its deliberations (McGeary and Smith, 20021. Finally, several Committee members conducted town meetings at their home institutions and elsewhere, inviting scientists, administrators, and students to contribute their perspectives. Thus, the Committee was able to hear, consider, and discuss a diverse range of facts and opinions about the organizational structure of NIH. Its final report and recommendations are, however, based on the Committee's assessment of the information that was avail- able and current trends in biomedical science and health. THE COMMITTEE'S RESPONSE TO ITS CHARGE The goal of the study focused on the organizational structure of NIH, but it was not possible to address this issue satisfactorily without considering the mission of NIH, some of its key processes, and the scientific, social, and political environment in which NIH activities take place. Although a long series of reviews of NIH helped to inform committee deliberations, both the nature of the charge and the 1-year period allowed for deliberations put important constraints on the development, character, and scope of the recommendations that could credibly be put forward. Most important, the committee was not asked to address NIH's research priorities or the quality and effectiveness of the wide array of research and advanced training programs that NIH undertakes or sponsors. The Committee's view of its task was governed, first, by the desire to be of some practical assistance to all those who wish NIH to continue to be an outstanding 3

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4 Enhancing the Vitality of the National Institutes of Health organization. Scholars of organizational management have long recognized that there is more to organization than structure. An organization's ability to make effective changes is influenced by a multiplicity of factors, including structure, strat- egy, and systems, the last of which includes all the formal and informal processes and procedures that organizations rely on to function. Thus, the Committee proceeded on the premise that its task included assessing both the organizational configuration of NIH and the key processes and authorities that play roles in NIH- wide decision-making. Although the borders between structure, mission, and priorities are not well defined, the Committee tried not to take too expansive a view , . . . . . ot its response ~1- ltles. Therefore, the Committee did not focus exclusively on whether or not there should be a widespread consolidation of NIH's institutes and centers. Rather, it took a more general approach, namely to inquire if there were any significant organizational changes including the widespread consolidation of institutes and centers that would allow NIH to be even more successful in the future. Although the Committee discussed on numerous occasions the advisability of the widespread consolidation of NIH, it eventually came to believe that this was not the best path for NIH to take at this time. It is important to understand that the structure of any large and complex organization, such as NIH,is not the tidy result of a compact set of compelling propositions emanating from organizational theory any more than the particular organization of our complex pluralistic democracy is the result solely of the inspired thinking of political philosophers. The latter is instead the outcome of our particular form of politics and, therefore, heavily influenced by our history and evolving cultural commitments. It is very much the same way with NIH. It would be naive to assume that NIH was or should be organized exclusively along the lines dictated either by the interests of the scientific community or the priorities of any other single set of interests with a concern about promoting health-related research and advanced biomedical training. NIH's existing structure is the result of a set of complex evolving social and political negotiations among a variety of constituencies including the Congress, the administration, the scientific community, the health advocacy com- munity, and others interested in research, research training, and public policy related to health. Indeed the history of NIH provides clear evidence that each of these communities has always had a variety of views on the appropriate organization of NIH. From any particular point of view or for any particular set of interests, the current situation is not only imperfect, but is certainly not one that either the Congress or the scientific community would designate ab initio. Rather it has evolved as a very useful and largely productive outcome of a series of political and social negotiations that took place over time. This outcome is typical of the design of important social organizations in a pluralistic democracy. NIH has become an organization that balances its many interests and the Committee felt that any major modifications at this point in time should focus directly on enhancing NIH's capac- ity to pursue major time-limited strategic objectives that cut across all the institutes

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Executive Summary and to acquire a special ability to pursue more high-risk, high-return projects. It was our view that at this moment the widespread consolidation of institutes and centers is not the next best organizational step for NIH to undertake, as any benefits to be gained would be offset by the costs involved. What does the Committee mean by "costs"? At a minimum, because Congress created the institutes, dissolving or merging institutes would require congressional action. Any thoughtful major reorganization would necessitate a lengthy and complex information gathering and decision making process that would include numerous congressional hearings involving members of Congress, congressional staff, and a wide variety of interests in the various health advocacy and scientific communities. Our discussions, correspondence, and meetings made it quite clear that there would be very little agreement among these communities on what the right way to reorganize NIH is, and there would probably be dozens of conflicting ideas in play and few clear avenues for narrowing these down. Moreover, these discussions and negotiations would be long and contentious ones and with a quite uncertain outcome. More importantly, the Committee is firmly convinced that many of the goals that might be achieved through large-scale consolidation of institutes could also be achieved more rapidly and effectively through other organi- zational and administrative mechanisms, as recommended in this report. Nevertheless the Committee did fee! that no organization as important as NIH should remain frozen in organization space and that some regular, thoughtful and publicly transparent mechanism is required to allow appropriate changes in the organizational structure of NIH to take place at appropriate times. Although the Committee does believe that the consolidation of two pairs of institutes is appropri- ate to consider at this time, it felt that these issues ought to have the benefit of the public process we have recommended. The Committee was also well aware that all organizational changes, however well thought out, potentially carry both potential risks and benefits, and it has done its best to sort these out. The Committee recognized that the decentralized structure of NIH, which allows a large number of people throughout the scientific and advocacy communities to help to set priorities, has been and should continue to be an integral element in NIH's success. The Committee also kept the enormous benefits of investigator-initiated grants, including those focused on fundamental research, firmly in mind during its deliberations. Finally, the Committee understood that it is the quality of leadership and decision-making at all levels, as opposed to adminis- trative structures, that are central to NIH's vitality. In the long run, the recruitment of outstanding leadership, the commitment to individual scientists as the main sources of new discoveries, and the reliance on the competitive review system for determining awards will be essential to NIH's continuing success. The fact that NIH has been working well does not mean that it could not work better if in response to changes on the scientific frontier, new health concerns, or other important environmental shifts some organizational modifications were made. The intent of this report is to assess the current organizational structure of s

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6 Enhancing the Vitality of the National Institutes of Health NIH and to suggest modifications that might be appropriate to help NIH to become even more effective in supporting research essential to the long-term goal of improv- ing human health. CENTRALIZATION OF ADMINISTRATIVE FUNCTIONS NIH is an agency of the Department of Health and Human Services (DHHS), which has recently issued instructions to consolidate administrative functions, such as personnel management, communications, congressional liaison, and travel, throughout the Department. The "One HHS" initiative has the stated goal of better integrating management functions across the department's operating and staff divi- sions. The initiative has already resulted in consolidation of some administrative functions at NIH. DHHS has further plans for consolidating other functions at NIH, such as budgeting, finance, and procurement, and is encouraging NIH to consider outsourcing some of its administrative functions. While the Committee believes that it is critical that government continue attempts to eliminate inefficiencies, it would not serve anyone if such initiatives result in decreasing the effectiveness of NIH as a research and training organization or damage its ability to recruit talented leaders at all levels. Centralization of certain functions can be effective, but is not always the best means to achieve increased efficiencies. At times, centralization serves everyone's interests, but at other times it serves no one's interests. The Committee believes that initiatives to centralize or outsource from NIH key science-related functions that are difficult to separate from the performance of its primary mission, such as aspects of grants management, fail to appreciate how closely these administrative functions are tied to the scientific enterprise. Recommendation 1: Centralization of Management Functions Any efforts to consolidate or centralize management functions at NIH, either within NIH or at the DHHS level, should be considered only after careful study of circumstances unique to NIH and its successes in carrying out its research and training mission. A structured and studied approach should be used to assure that centralization will not undermine NIH's ability to identify, fund, and manage the best research and training proposals and programs in support of improving health. ORGANIZATIONAL STRUCTURE OF NIH NIH's continuing success has been due largely to its ability to adapt to meet the ever-changing needs and challenges posed by science, medicine, and public health. Moreover, there is a perception that given the substantial increases in resources and the vast expansion of the biomedical enterprise, the addition of institutes and centers has been productive and has provided an ever broader base of support and budget

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Executive Summary success both for the specific interests involved and for NIH in the aggregate. While everyone understands that this expansion cannot and should not continue indefi- nitely, many see no particular difficulty with the current number of institutes and centers. The Committee carefully considered major structural changes in NIH, including possible revisions in the number and reporting lines of institutes and centers (ICs) to the director. The Committee considered numerous proposals for restructuring NIH in great detail. However, as laid out in this report, it did not find a compelling intellectual argument for major structural alterations at this time. Rather the Committee makes recommendations for achieving many of the goals identified by proponents of major restructuring (more authority for the NIH director, increased responsiveness, greater flexibility, and more opportunity for coordination) primarily by other means. Many previous reports have suggested that increasing the number of ICs at NIH would make it less effective. Thus, the present Committee is hardly the first to consider these problems and deliberate over potential solutions. The Committee notes, however, that little changed as a result of past studies. The trend toward continued growth in the number of units in NIH has continued to the present in the absence of an accepted process such as that suggested in the 1984 Institute of Medicine report. The Committee believes therefore that it would be useful for Congress to consider amending the authorizing legislation for NIH to require that certain steps be taken in considering the creation, dissolution, or consolidation of . . . Organizational units. Recommendation 2: Public Process for Considering Proposed Changes in the Number of NIH Institutes or Centers Either on receiving a congressional request or at the discretion of the NIH director in responding to considerable, thoughtful, and sustained interest in changing the number of institutes or centers, the director should initiate a public process to evaluate scientific needs, opportunities, and consequences of the proposed change and the level of public support for it. For a proposed addition, the likelihood of available resources to support it should also be assessed and the burden of proof should reside clearly with those seeking to add an organizational element. Despite the Committee's conclusion that a large-scale restructuring of the ICs would not be wise now, no organization that is expected to remain effective should have to bear the burden of a frozen organizational structure, and not all its existing units are likely to continue to have the same relevance or independence in the future. Therefore, the public, the scientific community, or the director of NIH, in concert with internal and external advisers, should be able to suggest additions, subtractions, or mergers of units to Congress at appropriate times. The Committee provides two suggestions for potential mergers for further study: the merger of the National 7

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8 Enhancing the Vitality of the National Institutes of Health Institute on Drug Abuse and the National Institute on Alcohol Abuse and Alcohol- ism and the merger of the National Institute of General Medical Sciences and the National Human Genome Research Institute. Indeed, the Committee favors these mergers, but believes that such changes should benefit from use of the process outlined above. However, because of extraordinarily persuasive arguments about exceptional needs made by a variety of groups in discussions with the Committee, it recommends merging several clinical research components of the extramural and intramural programs to create a National Center for Clinical Research & Research Resources. ~ ~ . . . . . Recommendation 3: Strengthen Clinical Research NIH should pursue a new organizational strategy to better integrate leadership, funding, and management of its clinical research enterprise. The strategy should build on but not replace existing organizational units and activities in the individual ICs' intramural and extramural research programs. It should also include partnerships with the nonprofit and private sectors. Specifically, the Committee recommends that several intramural and extramural programs be combined in a new entity to subsume and replace the National Center for Research Resources, to be called the National Center for Clinical Research and Research Resources (NCCRRR). In addition, a deputy director for clinical research should be appointed in the Office of the Director to serve as deputy director and head of the new entity. ENHANCING NIH'S ABILITY TO RESPOND TO NEW CHALLENGES Although the Committee is not recommending a major structural reorganiza- tion of NIH's institutes and centers, it concluded that to meet the scientific and health goals of the nation, NIH needs new mechanisms for mobilizing and coordi- nating funding from many units for high-priority initiatives that cut across the purviews of individual ICs. Although co-funding of projects by multiple institutes occurs, it is not clear to what extent these projects are true "end-to-end" collabora- tions. Thus, "multi-institute funding" should be distinguished from "trans-NIH initiatives," in which planning and implementation of activities involves more than one institute from start to finish. The Committee believes that the best means to achieve mobilization and coordination of new cross-cutting initiatives is through the initiation via NIH-wide strategic planning of a rotating series of multiyear, but time-limited, strategic initiatives that involve all the ICs. Recommendation 4: Enhance and Increase Trans-NIH Strategic Panning and Funding a. The director of NIH should be formally charged by Congress to lead a trans- NIH planning process to identify major crosscutting issues and their associated

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Executive Summary research and training opportunities and to generate a small number of major multi-year, but time limited, research programs. The process should be con- ducted periodically perhaps every 2 years and should involve substantial input from the scientific community and the public. b. The director of NIH should present the scientific rationale for trans-NIH budgeting to the relevant committees of Congress, including a proposed target for investment in trans-NIH initiatives across all institutes. For example, an average target of 5% of overall NIH funding in the first year, growing to 10% or more over 4-5 years, may be appropriate. c. The appropriations committees should annually review budget justifications and testimony from the NIH director and from individual IC directors about the participation of each unit in the planned trans-NIH initiatives and the portion of their budgets so directed. Congress should include budget targets in the appropriations report language. The Committee recommends beginning with 5 % of the overall NIH budget. d. To ensure that each IC uses the target proportion of its budget for trans-NIH initiatives of its choosing, that proportion of the annual appropriation to each unit should be treated as "in escrow" until the NIH director affirms that the unit has committed to its expenditure for the identified trans-NIH initiatives. e. The President should include in the budget request, and Congress should include in the NIH appropriation for OD, funds to support an appropriate number of additional full-time staff to conduct the trans-NIH planning process and "jump-start" the initiatives that emerge from this process. To carry out the responsibilities of managing, planning, and coordinating the programs of NIH's 27 ICs, the NIH director is assisted by a number of staff units collectively called Office of the Director (OD) Operations. The budget for OD Operations has not grown in proportion to NIH's research funding and is inade- quate for the effective management of the organization. When unforeseen needs surface, the OD is likely to have to "pass the hat" to the ICs to gather the additional resources needed. Recommendation 5: Strengthen the Office of the NIH Director The Office of the Director should be given a more adequate budget to support its management roles or greater discretionary authority to reprogram funding from the earmarked components of its budget when necessary to meet unantici- pated needs. In particular, if the director is given the responsibility and authority to conduct NIH-wide planning for trans-NIH initiatives, the director's budget will need to be amplified to take the costs of such planning into account. 9

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10 Enhancing the Vitality of the National Institutes of Health The earmarking of funds by Congress for the establishment and continuation of programmatic offices in OD sometimes limits the director's flexibility and fluidity of resources, as well as his or her ability to effect change across the organization. It is difficult to ascertain whether the programmatic offices within OD have achieved their intended goals. The time may be right to assess the effect that the program- matic offices in OD have had, including their role in the NIH director's policy and planning processes, whether the programs have clear goals, and whether there is a need to "sunset" an office once it achieves its goals. The Committee believes that the process recommended in Chapter 4 for evaluating the merits of proposed addi- tions to or subtractions from the list of ICs should also be applied to the creation of new offices in OD itself. Recommendation 6: Establish ~ Process for Creating New OD Offices and Programs The public process recommended in Chapter 4 (Recommendation 2) for evalu- ating a proposal to create a new institute or center or to consolidate or dissolve institutes or centers should also be used for a proposal to create, consolidate, or dissolve offices in OD. The process should be used to evaluate the scientific needs, opportunities, and consequences of the proposed change, the likelihood of resources being available to support it, and public support for it. The pressures that exist in organizational environments such as NIH's may make it difficult to undertake high-risk research even though such research may offer potentially high payoff. The Committee also believes that there is a need for a director's Special Projects Program that is outside the budgets of the ICs and is funded as an OD line item. The goal of the program would be to provide a mechanism to augment the funding of high-risk, innovative research projects. In a broad sense, the Committee imagines the program to be patterned after the Defense Advanced Research Projects Agency (DARPA). Recommendation 7: Create ~ Directors Special Projects Program A discrete program, the director's Special Projects Program, should be estab- lished in OD to fund the initiation of high-risk, exceptionally innovative research projects offering high potential payoff. The program should have its own leader, who reports to the director of NIH, and a staff of short-term (2-4 years) program managers to manage identified projects with advice on program con- tent from extramural panels. The program should be structured to permit rapid ~ ~ ' ~ review ant 1nltlatlon ot promising projects; 1t peer review IS ~ .eemec appropriate, the program should use peer review panels created specifically for it and charged with selecting high-risk, high-potential return projects. Congress should be prepared to provide new funding in the amount of $100 million, growing to as much as $1 billion per year for this endeavor, and commit to support it for at least 8-10 years so that a sufficient number of projects can reach fruition and a

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Executive Summary full assessment of program efforts can be made. A program review should be conducted during the fifth year to provide mid-course guidance. The Committee is convinced that the Intramural Research Program (IRP) of NIH should not be merely an internal extension of the extramural community but rather should be doing distinctive research that the extramural community cannot or will not undertake. The Committee believes that too little weight has been placed on potentially distinctive contributions of the IRP and that both uniqueness and quality should be essential justifications of the IRP. Recommendation 8: Promote Innovation and Risk Taking in Intramural Research The intramural research program should consist of research and training pro- grams that complement and are distinguished from those in the extramural community and the private sector. The intramural program's special status obligates it to take risks and be innovative. Regular in-depth review of each component of the intramural program should occur to ensure continuing excellence. Allocation of resources to the intramural program should be closely tied to accomplishments and opportunities. Inter-institute and intramural- extramural collaborations should be supported and enhanced. ACCOUNTABILITY, ADMINISTRATION, AND LEADERSHIP Public accountability and leadership are key aspects of NIH's stewardship of the biomedical enterprise. The Committee has suggested several ways for NIH to enhance its public accountability and ensure the continuing vitality of its leadership. The current deficiencies in information management methods and infrastructure to collect, analyze, and report level-of-investment data in a timely fashion must be addressed. The problem requires the development of an NIH-wide agreement on what to track and publish and of a single method for coding data that uses consistent definitions and deals with the uncertainties inherent in counting research when it is only related but not directly applicable to a specific topic. Once developed, the statistics should be kept current and their accuracy ensured through quality control. NIH must also improve its tracking and analysis of the research accomplishments of scientists trained and supported with NIH funds. Recommendation 9: Standardize Data and Infor~nation Management Systems For purposes of meeting its responsibilities for effective management, account- ability, and transparency, NIH must enhance its capacity for the timely collection, thoughtful analysis, and accurate reporting of the nature and status of its research and training programs and public health advances. Data should be collected consistently across institutes and centers and submitted to a cen- tralized information management system. 11

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12 Enhancing the Vitality of the National Institutes of Health The vision of the NIH leadership regarding accountability and the procedures and structures that the leadership adopts to enhance it are perhaps the most impor- tant ingredients in the complex mix of policies and strategies that enable NIH to meet its responsibilities to all its constituents. Leadership and vision may influence particularly the extent to which accountability is reinforced and implemented at diverse levels of the NIH system, from top management through staff to individual intramural and extramural investigators. In the current NIH environment, reviews of the performance of senior members of management a form of public account- ability are too informal and ad hoc to be effective. Moreover, the processes and criteria for review are not obvious or well defined. These reviews should consider the extent to which the institute/center director promotes the effectiveness of NIH as an overall entity, including supporting trans-NIH initiatives. By communicating, as appropriate, the results of reviews to the NIH director's advisory groups, the IC directors can demonstrate an additional level of accountability. While some aspects of a review should be held as confidential, those elements that relate directly to the mission and objectives of NIH should be made available to the director's advisors. The Committee also believes that a healthy degree of turnover in leadership is critical for sustaining the vitality of a research organization. It would provide oppor- tunities for leading scientists across the nation to leave their positions for a set period to come to NIH as a form of public service to provide effective scientific leadership to critical elements of the nation's biomedical enterprise. Recommendation 10: Set Terns and Conditions forIC Director Appointments and Improve IC Director Review Process a. All IC directors should be appointed for 5-year terms. The possibility of a second and final term of 5 years should be based on the recommendation of the director of NIH, which should include consideration of the findings of an external review of job performance. The authority to hire and fire IC directors should be transferred from the secretary of Health and Human Services to the NIH director. b. The director of NIH should establish a process of annual review for the performance of every IC director in terms of his or her effectiveness in fulfilling scientific and administrative responsibilities. The results of such reviews should be communicated, as appropriate, to the Advisory Committee to the director and/or the Council of Public Representatives. The Committee conclucleci that review and revitalization of OD is an essential prerequisite for accountability and leaclership. It noted that the National Science Foundation Act of 1950 creates a term of 6 years for the National Science Founcia- tion director and conclucleci that this has been a good mocle! for creating a system of accountability and periodic review that has the possibility of transcending changes . . . . In ac ministrations.

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Executive Summary Recommendation 11: Set Terms and Conditions for the NIH Director Appointment The NIH director, appointed by the President, should serve for a term of 6 years unless removed sooner by the President. The possibility of a second and final term of 6 years should be based on a positive external review of perfor- mance and the recommendation of the secretary of Health and Human Services. The committee believes that the special status granted the National Cancer Institute (NCI) by the National Cancer Act should be re-examined. Because the President appoints the NCI director and the NCI budget bypasses the NIH director, it is possible that an unnecessary rift is created between the goals, mission, and leadership of NIH and those of NCI. For scientific and administrative reasons, this special status should be reconsidered. Recommendation 12: Reconsider the Status of the National Cancer Institute Congress should reassess the provisions of the National Cancer Act of 1971, particularly as they affect the authority of the NIH director to hire senior management and plan and coordinate the NIH budget and its programs in their entirety. Like other federal science agencies, NIH makes extensive use of advisory com- mittees (variously known as study sections, councils, boards, etc.) of nonfederal scientists, health advocacy representatives, and others to ensure the best possible input of expertise and additional perspectives on the evaluation of programs and the development of policies and priorities. NIH had over 140 chartered advisory com- mittees as of May 2002, more than any other federal agency. The secretary of Health and Human Services appoints 32 committees, the NIH director appoints 74, and the President appoints 2. In the appointment process, the President generally follows the recommendations of the secretary and the secretary generally follows the advice of the NIH and institute directors in filling positions, although they add their own candidates from time to time. At times in the past, administrations have tried to exert greater control over NIH, and there has been conflict over the per- ceived politicization of the advisory committee appointment process. The Commit- tee believes that it is essential that members be appointed to these advisory groups because of their ability to provide scientific or public health expertise to the review and approval of awards and policies. They should not be selected to advance political or ideological positions. There are substantial differences among institutes in the uses and roles of advi- sory councils; some are actively involved in establishing institute goals, and others are restricted to pro forma actions, with little advice or involvement sought by institute personnel. Advisory councils should routinely and consistently be con- sulted in the priority setting and planning processes of an institute, have active involvement in decisions regarding issuance of program announcements and requests 13

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14 Enhancing the Vitality of the National Institutes of Health for applications, and work to ensure that the institute is held accountable in reach- ing its goals and communicating with the public. The manner in which institute directors interact with their advisory councils should be a criterion for IC director reviews. Recommendation 13: Retain Integrity in Appointments to Advisory Councils and Refrain Advisory Council Activity and Membership Criteria a. Appointments to advisory councils should be based solely on a person's scientific or clinical expertise or his or her commitment to and involvement in issues of relevance to the mission of the institute or center. b. The advisory council system should be thoroughly reformed across NIH to ensure that these bodies are consistently and sufficiently independent and are routinely involved in priority-setting and planning discussions. Councils should be effectively engaged in discussions with IC leadership to enhance accountabil- ity, facilitate translation of goals and activities to the scientific community and the public, and provide feedback to the IC director. To achieve sufficient inde- pendence and avoid conflicts of interest, a substantial proportion of a council's scientific membership should consist of persons whose primary source of research support is derived from a different institute or center or from outside NIH. Although it is desirable to keep administrative and overhead costs as low as possible, appropriate funding for these costs is essential to the effectiveness of any organization, including those that sponsor research and training programs. At NIH, the resources for those functions (for example, management of extramural activities, some intramural research program costs, program development, priority setting, education and outreach, acquisition and maintenance of new information tech- nology systems, professional development, and facilities management) flow through the Research Management and Support (RMS) budgets of the various units that make up NIH. In the early l990s, Congress imposed limitations on RMS that restricted its growth. In the middle l990s, RMS was reduced, and little growth has been allowed since. In FY 2001, RMS represented 3.3% of the total NIH budget, down from 4.5/O in 1995. The RMS share of the total NIH budget has decreased every year since FY 1993. The committee feels that the effectiveness of NIHis now imperiled by the lack of adequate resources to provide appropriate support both for its primary research mission and for meeting its accountability responsibilities. Recommendation 14: Increase Funding for Research Management and Support Congress should increase the appropriation for RMS to reflect more accurately the essential administrative costs required to effectively operate a world class $27 billion/year research organization effectively. Moreover, when additional

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Executive Summary congressional mandates are imposed on NIH through the appropriations pro- cess, they should include funds to cover necessary administrative costs. Whether needs and opportunities will be accommodated in existing NIH units or proliferation or consolidation will occur in the near future is an issue to be addressed by future administrations, Congress, the scientific community, and the public. NIH will continue to be shaped by the dynamics of many interacting con- stituencies and influences. Interests will converge or conflict, depending on the issue. The degree of convergence and divergence will continue to be influenced by other important factors such as the level of annual congressional appropriations to NIH. The recommendations made in this report are intended to help NIH to con- tinue to be responsive, accountable, and effective in its leading role in the vast international humanitarian enterprise of biomedical research aimed at a better understanding of the human condition, the prevention and relief of disease, and the promotion of good health throughout the stages of life. 15

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16 Enhancing the Vitality of the National Institutes of Health