October 2, 2003

Dr. Michael Holland

Office of Science and Technology Policy

Executive Office of the President

1650 Pennsylvania Ave NW

Washington, DC 20502

By email: [<mholland@ostp.eop.gov>]{.underline}

**Re: Request for Information for Research Business Models Subcommittee
of the NSTC Science Committee, 68 FR 46631-2 **

Dear Dr. Holland:

The Association of American Medical Colleges (AAMC) appreciates this
opportunity to submit comments to the National Science and Technology
Council on its review of "business models" supporting research between
federal agencies and academic and other non-governmental institutions.

The AAMC represents the nation's 126 accredited medical schools, over
400 affiliated teaching hospitals, and 94 academic medical societies
representing nearly 105,000 faculty members. Our constituent
institutions perform more than half of the extramural research sponsored
by the National Institutes of Health. Given that biomedical and health
research accounts for nearly 51% of the federal budget allocated to
basic research1, our member organizations are clearly significant
partners in the nation's research enterprise. Moreover, many of these
academic medical centers are part of larger universities or state
systems of higher education that directly interact with the entire
panoply of federal science agencies as well as other federal, state and
local organizations. Respecting this fact, we join and endorse the
insightful comments responding to this notice of the Council on
Governmental Relations (COGR), which analyzes the benefits, costs and
burdens of federal regulations on behalf of the nation's major research
universities. Our comments here are intended to add our perspective to
these and other views from the academic community.

In general, the AAMC views the federal-academic-industrial partnership
in research as an immense achievement of American science policy, and
the continuation of this partnership will be no less---and arguably even
more---vital to ensuring the nation's welfare, security, and prosperity
in the new century. As with any partnership, stability, transparency,
and a reasonable level of predictability in expectations and behaviors
are necessary for success, as the AAMC commented several years ago on
the *Presidential Review Directive #4*.2 At that time, we expressed
concern that progressive, incremental changes in grants policy,
regulations, and other federal actions had increasingly moved the
federal-academic partnership away from an "investment model" and closer
to a "procurement model" of government funding for science that, while
perhaps more comforting to and protective of some federal administrators
and auditors, nevertheless threatened to impede scientific creativity
and productivity and ultimately diminish the long-term financial
stability of academic research institutions.3 We called for a
reaffirmation of the fundamental principles and assumptions underlying
the federal sponsorship of university research, stabilizing the terms of
the partnership, and strengthening mechanisms for collegial consultation
and dialogue.

Jordan J. Cohen, M.D., President

1 *NSF Science Indicators* *2002*, reporting \$10.4 billion in budget
authority for health research out of \$20.3 billion total in basic
research in FY 2001. Table 4-20.

In large part, key councils and legislation have reaffirmed the
assumptions underlying the federal-academic partnership (and its mutual
interaction with industry),4 and the government's and the public's
appreciation and support for biomedical and other scientific research
has grown. Nevertheless, the AAMC continues to have concerns that a
mostly piecemeal accumulation of directives, restrictions, mandates, and
alterations in policy and budgeting seriously threaten the partnership.
These actions are typically taken unilaterally within agencies, and
seemingly without due regard for the sustainability of scientific
institutions or the federal-academic partnership itself, core values
that lie at the heart of the cost-reimbursement model for academic
research.

In consideration of business models for federal support of research, we
agree with COGR in seeking models that correctly identify the real
"products" of academic research (e.g., new knowledge, a cadre of trained
personnel), the requirements and challenges of this research (e.g.,
adequate facilities, instrumentation, and cross-disciplinary support),
and above all that "strive to return to a costing and regulatory system
that is equitable, effective and that appropriately reflects the
diversity and needs of the individual research providers."5 *The AAMC
strongly supports COGR's view of the NSTC subcommittee's request for
comments as an initial invitation to participate in a constructive and
ongoing dialogue, and with this expectation, we focus here on an
initial, exemplary, but by no means exhaustive, enumeration of issues
and potential data sources:*

2 AAMC letter to Cliff Gabriel on the Presidential Review Directive,
"Review of the Government University Partnership", dated 1997.

3 As the AAMC then noted, "....\[C\]ost accounting strategy has replaced
science policy as the philosophical driver of the \[federal-academic\]
relationship."

4 Notably, the Executive Order of Dec. 29, 2000 and NSTC's subsequent
report, *Implementation of the NSTC Presidential Review Directive-4:
Renewing the Federal Government-University Research.* Also, the NSF
Reauthorization Bill, H.R. 4664 (P.L. 107-368).

5 COGR comment letter to Dr. Michael Holland, September 2003.

*Inconsistency of federal policies and objectives*: Recent decades are
replete with examples of the federal government\'s unilateral shifting
of the terms of the government-university relationship, often under the
guise of cost accounting. The most notable of many changes has been
OMB's ex cathedra revision to Circular A-21 establishing an arbitrary
26-percent cap on the recovery of administrative expenses for academic
institutions (but not for independent research institutions, which are
subject to Circular A-122). At the same time, universities labor under a
steadily increasing administrative burden of meeting ever expanding and
ever more demanding regulatory and reporting requirements.

Other chafing federal actions include a legislated cap on salary levels
reimbursable by NIH grants that is below actual salaries paid to
investigators, and especially, to physician investigators who have been
deemed for more than three decades an "endangered species"6; caps on
stipends for pre- and post-doctoral fellowships and training grants that
are below the competitive levels many institutions must provide;
limitations on recovery from federal grants of graduate student tuition
costs at levels below that charged by many institutions, a restriction
that is particularly punitive to private universities; and eliminating
funding for the NIH's Biomedical Research Support Grant mechanism, which
was created specifically to provide flexible support of institutional
research capacity. The net effect of these actions has been the
cumulative transfer of legitimate costs of federal research to awardee
institutions.

The AAMC believes that the cap on the reimbursement of administrative
costs and related cost-shifting actions are central issues that must be
addressed in any contemporary discussion of federal-academic business
models. COGR, the Association of American Universities, and their member
organizations have monitored the cost-reimbursement issues closely7 and
we urge the NSTC to engage in dialogue with the academic community on
this urgent topic. We also cite RAND's excellent study, *Paying for
University Research Facilities and Administration*, which provides
further data.8

*Accountability:* The doubling of the NIH budget has heightened the
obligations of the NIH and the biomedical research community to
demonstrate their accountability in the use of federal funds in
discovery-oriented research.9 The AAMC believes that NIH responded with
exemplary competence to the strict requirements of the 1993 Government
Performance and Results Act (GPRA, P.L. 103-62). We urge the NSTC to
examine the NIH's most recent GPRA report.10 The AAMC was disappointed
to learn that the Office of Management and Budget opted not to accept
NIH's "GPRA goals" in implementing its own management performance tool,
but has sought to mandate yet a new set of performance measures.

6 Wyngaarden JB. The clinical investigator as an endangered species.
*New England Journal of Medicine*. 1979; 301;23:1254-9.

7 COGR, *Cost of Doing Business*, forthcoming.

8 Goldman CA, Williams T. RAND; Santa Monica, CA, 2000.

9 Korn, D. et al. The NIH budget in the post-doubling era. *Science*.
2002;296(5572):1401-2.

*Regulatory Requirements*: The health information privacy provisions of
HIPAA are perhaps the most portentous example conceivable of a
regulatory regime fundamentally altering the research environment.
Unless modified, the privacy rule threatens major impedance of
biomedical and health sciences research that is already subject to
significant oversight. In the view of the AAMC, the privacy rule
excessively intrudes upon the established Institutional Review Board
(IRB) system of human research oversight, burdening biomedical and
behavioral researchers, their institutions, and research participants
with onerous procedural requirements, ambiguous regulatory standards,
and extensive new liability concerns destined to breed cautionary
behavior and vexing delays. The rule imposes new *civil and criminal
liability *upon hospitals, health plans, and providers for their use or
disclosure of medical information for research purposes, even when such
uses and disclosures are approved by an IRB. The new liability under the
rule is above and beyond the legal consequences that flow from an
entity\'s failure to observe federal research regulations or applicable
state laws. Increased liability, when coupled with the compliance burden
imposed by the rule\'s procedural requirements, creates a substantial
disincentive for covered entities to accommodate the needs of biomedical
and health researchers. The threat is most severe to population-based
research requiring access to large numbers of archival medical records,
such as public health and epidemiological studies, health services
research, post-marketing assessment of the safety and effectiveness of
drugs and medical devices, and retrospective studies required to
understand and eliminate the systemic causes of medical errors.

The AAMC, joined over time by many other academic and health advocacy
organizations11, warned of the hazard that such regulations would pose
for medical and health research.12 The Association has initiated a
web-based survey to try to document the extent of the rule's impact on
research and research institutions, and intends to make the findings of
this study available. Most recently (according to *Washington Fax*,
September 24) a subcommittee of the National Cancer Advisory Board
delivered its report of "adverse effects" of HIPAA on cancer research.13
We expect more such reports will be forthcoming from the several medical
specialty organizations.

10 See [<http://www1.od.nih.gov/gpra/gpra_nih_c.htm>]{.underline},
accessed Sept. 24, 2003.

11 Coalition letter to Sec. Thompson, Nov. 20, 2001.
[<http://www.aamc.org/advocacy/library/hipaa/corres/2001/112001.htm>]{.underline},
accessed Sept. 24, 2003.

12 Kulynych J, Korn D. The new federal medical-privacy rule. *New
England Journal of Medicine, *. 2002;347(15):1133-4. Also, Kulynych J.,
Korn D. Use and disclosure of health information in genetic research:
weighing the impact of the new federal medical privacy rule. *Am J Law
Med*. 2002;28(2-3):309-24.

In other regulatory matters, the NIH, at the request of Congress, has
examined approaches to reduce regulatory burden in biomedical research.
NIH's report, though now several years old, provides some examples of
these approaches.14 The AAMC itself has joined the Federation of
American Societies for Experimental Biology (FASEB) in calling for
rationalization of hazardous waste regulations as they apply to
university research, and we endorse FASEB's insightful comments to the
NSTC in this regard.15 The Environmental Protection Agency has expressed
willingness to reconsider provisions of the Resource Conservation and
Recovery Act (RCRA) that while arguably appropriate for industry often
apply inappropriately to academic institutions. Rationalization of RCRA
regulations should allow universities to meet tailored,
performance-based standards developed in cooperation with state and
local authorities that often also regulate waste disposal.

*Research infrastructure*: AAMC's constituents indicate that facilities
and research space remain a significant constraint for new research, and
academic institutions have assumed the predominant burden for
construction of new facilities.16 The Association and other
organizations have asked that support for renovation and construction of
research facilities in general, and for research facilities for
non-human primates, recombinant rodents, and other animals in
particular, be a priority of the NIH and its National Center for
Research Resources.17 An NIH advisory group, the Working Group on
Research Facilities, has innovatively proposed to create a federal loan
guarantee program for new facility construction.18 Such a program would,
with minimal cost to federal partners, improve opportunities for
financing new facilities at PHS grantee institutions. Creation of this
program would, of course, require federal legislation.

A major impediment in biomedical research---incredibly, in spite of the
growth of the NIH budget---has been limited access to commercially
available, state-of-art instrumentation, and particularly so-called
high-end instruments, such as high-field MRIs, PET scanners, or certain
types of mass spectrometers. NIH's central program for shared
instrumentation (i.e., used by three or more investigators) has received
relatively little increased funding, adjusted for inflation, from the
early 1990s. A new program to support purchase of high-end
instrumentation has been implemented at NIH, though it has been grossly
insufficient to address a significant share of the meritorious
applications submitted. There may be opportunities for creating programs
that establish especially expensive and complicated instruments, which
require dedicated full-time staff, as regional resources, to be shared
among institutions.

13 Hawkins, Andrew. "HIPAA privacy regs unintended consequences hinder
oncology research, NCI panel reports.", Sept. 24, 2003.
www.washingtonfax.com.

14 http://grants2.nih.gov/grants/policy/regulatoryburden/index.htm#toc

15 FASEB comment letter to Dr. Michael Holland, 2003.

16 See for example, National Science Foundation, Division of Science
Resources Statistics, *Scientific and Engineering Research Facilities:
2001,* NSF 02-307, Project Officer, Leslie Christovich (Arlington, VA
2002).

17 Comment letter to NIH/NCRR by Presidents of AAU, AAMC, and NASULGC,
May 9, 2003.
[<http://www.aamc.org/advocacy/library/research/corres/2003/050903.pdf>]{.underline},
accessed Sept. 24, 2003.

18 See [<http://www.nih.gov/about/director/061901.htm>]{.underline},
accessed Sept. 24, 2001.

*Cross-disciplinary models*: Much biomedical research infrastructure is
supported by separate NIH institutes and centers to further their
respective research missions. The growth of multi-disciplinary research
across the biomedical sciences underscores the opportunity for further
efforts to coordinate support of infrastructure across NIH and with
other federal agencies. NIH's use of DOE-funded synchrotron radiation
facilities to support biological investigations is a successful and
instructive model. Clearly, identification of appropriate mechanisms for
review and support of infrastructure across agencies is a challenging
task, but pilot projects might be used to test the feasibility of
alternative approaches. Efforts should be made to develop proposals or
options to strengthen coordination of investment in merit-reviewed,
cross-disciplinary research infrastructure. NIH could initiate such
efforts, and should also encourage academic institutions to identify
opportunities for regional research resources that can be shared among
multiple institutions.

*Information technology*: The need for a national, uniform,
inter-operative clinical information system to support patient-centered
clinical research has become an urgent priority in the age of human
genomics. The AAMC, with support from the National Science Foundation,
has completed a study of clinical informatics, recommending, among other
initiatives, that academic health centers take the lead in developing
and adopting a common set of specifications, while allowing commercial
vendors to focus on systems development.19 The fact is that medical
information systems in academic medical centers have been designed
largely to support the finance and administrative operations of
hospitals and clinics, or, more recently, to provide bioinformatics
capability in support of research in structural and functional genomics.
The development and implementation of clinical information systems
*designed for support of clinical research* is a daunting undertaking of
national scope that AAMC believes will only be accomplished through a
public-private partnership catalyzed by federal leadership and challenge
funding.

In conclusion, the AAMC welcomes the NSTC's review of these issues and
looks forward to assisting the Council in its deliberations. We hope
that this is the beginning of a continuing dialogue with the university
and academic medical center communities that can refresh and
reinvigorate the federal-academic research partnership. Questions or
requests for further information should be directed to Dr. David Korn,
AAMC's Senior Vice President for Biomedical and Health Sciences Research
(202-828-0509, dkorn@aamc.org).

19 AAMC. *Information Technology Enabling Clinical Research.*
Washington, DC, 2003 (available on request.)

Sincerely,

Jordan J. Cohen, M.D.

cc: David Korn, M.D.