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GEN News Highlights : Mar 1, 2013

Researchers Warn of Sequestration Impact

Across-the-board cuts in the federal budget or “sequestration”—the first installment of which is expected to be carried out today absent a deal on federal spending—will have a “substantial” impact on their research, with grave consequences for the future of the nation’s biological and medical research efforts, more than two-thirds of scientists agreed in a newly released poll.

In a survey of U.S. academic, government, and pharmaceutical scientists by the life sciences research and advisory firm BioInformatics, 69% anticipate the cutbacks will limit their ability to hire new staff for their labs, obtain new grants, and attend scientific conferences. That is, 69% gave answers on a 0–10 scale of 8 to 10 when asked how much of an impact they thought sequestration would have in their work, with one-third (33%) saying it rated a 10 in terms of substantial impact.

The percentage was even higher among academic and government researchers (75%) though not among researchers at biopharma companies, only 42% of which agreed. Who was questioned may explain that difference: Academic or university scientists accounted for more than half (56%) of the 320 scientists who responded to the survey. The next two largest groups of respondents were government scientists (10%), and biopharmaceutical company scientists (9%).

“I don’t think anyone in academia is demanding they receive carte blanche,” BioInformatics President Bill Kelly told GEN this morning. “They understand budgets are limited. But what they don’t want to see is this starting and stopping of budgets. Science is a long-term investment. It needs to be funded consistently over time, because inconsistency and uncertainty drive people away from the field.” 

As for industry, he added: “Our hypothesis was those scientists in pharma who said there would be an impact to their work were probably thinking more long-term,” since academia trains future scientists and the effects of a slowdown would take time to be seen by industry.

Other industry scientists seeing an impact from sequestration, he said, are those working in government-sponsored clinical trials or startup biotechs that benefit from non-NIH federal funding, such as the recently renewed Small Business Innovation Research program.

The survey also found that academic and government scientists have both reduced their average annual operational research budgets this fiscal year compared with FY 2012—down 2.9% for government, to $369,717, and down 1.3% for academic labs, to $235,954. Industry lab budgets, however, will rise 1.5%, to an average $623,019.

Kelly said those cutbacks were not in anticipation of sequestration, but of the continued steady budgets that NIH has seen in recent years. “There were a number of comments that said, 'We’ve already halted travel. We’ve already cutting back on purchases. We already have a hiring freeze.'”

“In figuring out their budgets for 2013, they were already anticipating a flat funding environment. There was a lot of budget uncertainty to begin with,” given talk of sequestration since it was included as part of the Budget Control Act of 2011. That law requires President Obama and Congress to agree on how to cut $1.2 trillion over 10 years, or else carry out sequestration.

For all surveyed, about half their annual research budgets are funded through federal government grants (48.6%), with departmental funds a distant second (14.6%), and corporate R&D funds an even smaller share (9.8%).

Interestingly, grants from private foundations or charities accounted for 5.5% of budgets. It’s too soon to say if that percentage will rise as a result of sequestration, Kelly said, since it’s not known whether those groups will be able to, or willing to, fill the funding gap left by reduced federal spending.

While decrying the likely effects of sequestration and voicing support for more research funding, several academic researchers said the cuts should also be coupled with spending reforms by NIH; the agencies could save a significant amount of waste by updating their computer systems, holding grant reviews by videoconference, encouraging more interdisciplinary collaboration, and targeting more funding to younger researchers and projects deemed innovative.

“In the academic community, there’s a sense that the grant process could be reformed to make it more fair, and we received comments that it could be reformed to make the process more efficient, more streamlined, and be able to put research dollars into more hands,” Kelly said.

The survey demographics may account for another finding, one that suggests sequestration’s effects may not be as bad for life sciences tools companies. While they can expect lower sales as a near-term reaction to the federal budget cuts, only one-quarter of academic and government life science labs said they will consider deferring or postponing capital equipment and/or instrument purchases in 2013, the survey also showed.

“It appears what they’re going to do is cut back on those things that are discretionary expenses: There may be conference people don’t need to travel to. They’ll institute hiring freezes,” Kelly said. “They’ll do all sorts of things in order to preserve the research that they’re currently conducting, and it’s likely most of their 2013 grants and/or operating budgets are funded for the remainder of the fiscal year. The bigger concern comes in 2014 if funding is not restored.”

The survey's full results can be found here.