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North Bay Business Journal

Monday, March 18, 2013, 5:45 am

‘Sequester’ could impact medical research, providers

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    NOVATO — While scores of institutions await the fallout from across-the-board cuts to federal spending known as “‘sequestration,” the local impact is being realized particularly by medical research centers like the Buck Institute for Research on Aging.

    Since Congress was unable to reach a compromise, forced budget cuts totaling $1.5 trillion over 10 years are beginning to take effect across a broad spectrum of public funding. Two institutions on the receiving end of cuts of 5.1 percent are the National Institutes of Health and the National Science Foundation, both of which have funded research grants at the institute, said spokeswoman Kris Rebillot.

    Currently, the Buck has 44 active NIH grants with annual funding at more than $11.8 million — nearly 32 percent of its total revenue. The 5.1 percent cut would reduce the Buck’s revenues to the tune of about $606,000.

    The Buck has received no guidance from either the NIH or the National Institute on Aging, another source of grants for the institute, on how to proceed regarding specific sequestration-related cuts, Ms. Rebillot said. But what the institute can prepare for is a more difficult grant process as the sources of revenue dry up.

    “Basically, we have had no specific guidance as far as what the sequester will mean to us,” Ms. Rebillot said. “What we think is going to happen is that it’s going to be even harder to get approval for grants, even when we get a high scientific score,” she said.

    Typically, she added, the higher scientific score that a research proposal receives, the better chance it has of receiving a grant to fund further study.

    The NIH’s fiscal year 2012 budget was $30.7 billion. The 5.1 percent sequestration cut will result in a loss of $1.6 billion, according to the Federation of American Societies for Experimental Biology, which warned will result in “arbitrary funding cuts  that will prevent critical research projects from reaching completion.”

    California stands to endure cuts of more than $180 million for such research.

    Due to the uncertainty, the NIH is reducing some continued funding to already-approved grants. At the Buck, two grants to faculty were funded at 90 percent of what were approved — reducing revenues by $58,700.

    The Buck also has another 26 pending NIH grants totaling more than $19.7 million, along with three pending educational grants to the National Science Foundation totally nearly $8 million. One grant at the Buck, for $500,000, received a high scientific score and ordinarily would have been funded. Now, with sequestration a reality, that fund is in doubt.

    The diminished dollars for medical and biological research reflect a continued downward trend, according to the Federation of American Societies for Experimental Biology. The number of research grants funded by the NIH has declined every year since 2004, and currently less than 10 percent of submitted grants are funded compared to nearly 20 percent in the early 2000′s, according to the federation.

    Other health care sectors are expected to take a hit, as well, with a 2 percent reduction in Medicare payments to providers taking effect, including payments to hospice and hospital providers, among others.

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