Epidemiology and Genetics Research Program Division of Cancer Control and Population Sciences

DATE: March 1, 2001
TO: Recipient of NCI Grant
FROM: Director, National Cancer Institute
SUBJECT: FY 2001 Grant Funding Policy

I am writing to explain the new NCI Research Project Grant (RPG) policy for this year, FY 2001. This policy is based on the advice of a working group of the National Cancer Advisory Board (NCAB) and the recommendations of the NCAB.

The fiscal year 2001 appropriation awarded NCI a budget of $3,757,242,000, a 13.5% increase over last year's budget. The RPG portion of the total NCI budget constitutes nearly half of the total allocation. Over $1.6 billion of the total NCI budget has been made available for investigator-initiated research. This year, NCI will support the largest number of research grants in its 63-year existence. We estimate that the success rate for competing grant applications will be 29%, compared with 28% last year. We also expect that 4,485 grants will be awarded, an increase of 265 from last year.

Our ability to achieve these goals is based on the policies detailed below. Some of these policies are new, and may affect the way your funding level is determined. If you have specific comments or questions after reviewing these policies, please contact your NCI Program Director or the Grants Management Specialist assigned to your grant.

Non-Competing Research Project Grants

We will meet our commitments to previously awarded non-competing (Type 5) Research Project Grants at the level committed on the previous notice of grant award. To do this requires allocating 25%, or $110 million, of the increase in the budget to these awards, before any new or competing awards are made.

Competing R01's

The first step in the determination of NCI paylines is the scientific prioritization of applications by the peer review system. Then, based on increases in both number and cost of R01 applications and the available budget, a payline for new and competing continuation R01 grants is established. For FY 2001, the payline is the 22nd percentile. Although this payline is unchanged from last year, it reflects an increase of 55 competing awards from last year, bringing the total to 779 grants. Although the number of grants has only increased by 8%, the funds set aside for competing R01s have increased by 17% due to the increased costs of research.

This has been reflected in a large change in funding requests in this year's R01 grant applications. Among the 3,200 applications received in the first two rounds, an average increase in funding of close to 10% was requested. For those awards within the payline, the average increase requested by R01 investigators was 15% more than last year. This is in sharp contrast to our experience in previous years, which led us to expect average cost increases between 3% and 4%.

In addition, the number of R01 applications approved for higher costs is increasing steadily. For example, projections are that 154 fundable applications will have a direct cost of $250,000 (10 modules), compared with 90 for last year. Last year, NCI funded only a single R01 that had a total cost in excess of $1 million. For the first two rounds this year, 7 applications, each costing in excess of $1 million, fall within the fundable payline. Clearly, this has a dramatic impact on both the total funds needed and the average cost per grant funded.

With this continuing shift to more expensive grants, we recognized a need to revise the initial FY 2001 funding policy. Smaller R01 grants (defined as 7 modules or fewer) will be reduced 7% less than those R01 grants of greater than 7 modules. However, any cost reductions will vary by individual grant and be determined on a case-by-case basis.

Request for Applications

Grants received in response to Request for Applications (RFAs) will be paid from funds in the competing pool set aside for this purpose. In FY 2000, NCI allocated 6.3% (over $24 million) of competing dollars to support RFA applications. To increase support for unsolicited R01 awards in FY 2001, we have reduced the RFA pool to 5% ($20 million) of competing dollars.

Peer Review Recommended Levels

We have also had to make some administrative changes in determining the actual cost of an award. Starting with this year's competing applications, the NIH Center for Scientific Review (CSR) has changed the process its study sections use in reporting budget levels for approved grants. The Summary Statement face page now contains only the applicant's requested budget. CSR no longer provides the study section's recommended award level on the summary statement. Instead, after review, NCI program and grant administrative staff will consider both the study section's funding recommendation and any other necessary cost adjustments in determining the final award level.

NCI will begin to report reductions in the average cost awarded as an adjustment from the requested budget level, rather than from the recommended level. Past NCI funding typically awarded competing investigator-initiated R01 grants at 85-90% of the study section's recommended funding level. Normally, the study section's recommended level represented about 95% of the grantee's request. Hence, the awards averaged about 80-85% of the grantee's original requested budget. Consequently, any comparison with reductions from previous years (which were stated in terms as "from recommended") should be viewed carefully since they may not be comparable.

Competing Program Project Grants (P01s)

A priority score payline for Program Projects has not been established. Funding of P01 applications will be determined by the NCI Executive Committee on a case-by-case basis. Since NCI has capped requests for budget increases on competing renewal (type 2) Program Project applications, budget negotiations will be different for new (Type 1) applications than competing renewal applications. New P01 grants will be reduced an average of 15% from recommended levels while competing renewal P01s will be reduced 6% from recommended levels. (Note: NCI performs the review for P01 applications and is continuing to calculate the recommended level.) The net effect on type 2 awards will still provide an average growth of 15% over the current level of funding. In part, the increased cost for P01 awards reflects a changing mix of basic, clinical and population-based applications and the growing complexity of translational and clinical research.

Exception Funding

Over $42 million has been set aside by the NCI to support those grants that fall outside the established paylines yet have been approved as exceptions to the payline. The NCI Executive Committee or its individual Division Director members, with program staff input, decide which applications to fund as exceptions to the payline. Included are applications deemed eligible for Accelerated Executive Review (AER), a mechanism the NCI uses to turn a strict payline selection process into one that provides funding flexibility for those applications within a gray zone. The standard AER eligibility criteria for basic science R01 applications will be those scored in the range from the 22.1 percentile to the 27.0 percentile, and for Patient Oriented Research (POR) from the 22.1 percentile to the 32.0 percentile. It is anticipated that between 40-45 AER awards will be made.

Our goal in establishing these policies has been to optimize the use of our research dollars. It may seem paradoxical that at a time when the NCI budget has increased, we are instituting more stringent fiscal policies. I hope that this letter has been useful in explaining that research costs have been escalating at an even more rapid rate than our increases, generous as they have been, and how the funding level for your grant was determined. Again, if you have any questions, please do not hesitate to contact your Program Director or Grants Management Specialist.

Richard D. Klausner, M.D.