How NIAID Sets a Payline—A Conservative Approach in Light of Uncertainty

Funding News Edition: August 16, 2023
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Congressman Chris Van Hollen visits NIH

We receive instruction from Congress to commit funds to certain priority targets, like universal influenza vaccine research and antimicrobial resistance research.

Credit: NIH

NIAID uses paylines as cut-off points to fund the most meritorious research as determined through peer review. We use percentiles for R01s, while most other grant activity codes receive overall impact scores. We also make funding decisions on competing applications outside of listed paylines through selective pay actions, though our ability to do so depends on the availability of funds.

In choosing payline thresholds, we take many factors into consideration including uncertainties in future year budget levels and Congressional direction on spending allocations (e.g., targets for universal influenza vaccine research or antimicrobial resistance research). By clarifying several of our decision points here, we hope that you will feel less frustrated by a process that may seem arbitrary from the outside.

Some Context  

NIAID receives an annual budget appropriation from Congress, of which we commit about 85 percent to extramural research through grants and contracts, a majority of which is available to support unsolicited, investigator-initiated research project grants (with the rest funding solicited, NIAID-requested initiatives). In fiscal year (FY) 2022, NIAID spent $690 million on competing (i.e., new or renewal) research project grants.

In short, there’s a large pool of funds which must be awarded before the end of the fiscal year.

We receive, in competition for that funding, thousands of applications. In FY 2022, for example, we received 3,475 R01-equivalent applications. The applications are scored by peer reviewers, recommended for award to NIAID’s Advisory Council by extramural program staff, and confirmed by the NIAID Director. By using paylines, we have a simple criterion to identify which applications can be funded in score order without risk of exceeding our budget for the fiscal year.

You can find FY 2023 paylines for all relevant grant types at NIAID Paylines.

We, like many NIH institutes, post a funding strategy for paylines and scientific priorities to benefit our stakeholders, including investigators. For example, upon receiving your application’s overall impact score, you can discern whether you may need to prepare the Just-in-Time materials required before NIAID can issue an award. If funding is unlikely, you can assess how far from the fundable range reviewers judged your application, which should help to inform your approach in either resubmitting similar research in a modified application or else submitting a new application with meaningfully different research.

Decision Points for Staff

First, remember that we receive applications in multiple cycles throughout the fiscal year. At the outset, we know neither the volume of applications we will receive nor how well they will score in peer review. We cannot anticipate, for example, that the same number of investigator-initiated R21 applications will arrive year-over-year—a difference of 250 applications is not unusual.

Thus, we set conservative paylines as an interim step early in the fiscal year. Paylines act as a ratchet mechanism; we can increase a payline and then fund applications from earlier in the fiscal year that are now within the payline, but we cannot decrease a payline and pull back funding from awards already made.

High application volume is also why we make small-seeming adjustments to paylines. For R01 grants, each 1 percentile increase amounts to a commitment to fund between 40 and 50 additional awards. Supposing the additional R01 awards will average $600,000 in annual total costs over 5 years, each 1 percentile increase could carry a $125 million outlay. Those little adjustments are big commitments!

Similarly, we cannot know the average cost of new awards until later in the fiscal year. Of course, we make forecasts. Inflationary pressure within the field of biomedical research is well documented and NIAID has procedures in place designed to detect large incoming budget requests (e.g., Big Grants). But our ability to predict award costs for applications not yet submitted is limited.

Next, consider outyears (i.e., the project period beyond the year we make an award), which can further cloud the budget picture. Currently, we do not know exactly how much Congress will appropriate to NIAID in FY 2024, never mind 5 years from now in FY 2028. But most grant awards are multiyear commitments, so we make projections against an uncertain future. Were we to boost, for 1 year, the R01 payline, that choice would reverberate as that year’s set of new awards would require our spending more on noncompeting awards for the duration of those new awards’ project periods. The outyear costs weigh against future years’ paylines.

In some sense, certain grant types are in competition with each other. Over the past decade, for example, the volume of R21 applications has risen dramatically. Should NIAID respond by directing more of our budget to R21 grants, possibly at the expense of R01 grants? And if so, how do we right-size that choice—through comparison to other institutes, other activity codes, or previous fiscal years? Where do we strike the balance between, say, fellowship awards and career development awards?

We must likewise find an appropriate balance supporting investigator-initiated and solicited applications. Our targeted initiatives represent key research priorities and needs within our scientific portfolio; applications sent in response are reviewed separately and funded without use of paylines. The Institute sets a spending target for each initiative and funds applications to reach that level. Our payline calculations, then, must anticipate and account for the share of NIAID’s budget that will be committed to awarding solicited applications. 

Lastly, NIAID must prepare for unknown budget requirements. As made clear over the past decade, NIAID has unique responsibilities to respond to novel public health threats, e.g., emerging pathogens. Additionally, as part of each year’s budget allocation, we receive instruction from Congress to commit funds to certain priority targets. By maintaining a nimble stance on paylines, we are best positioned to meet any unforeseen needs.

The Main Takeaway

Our budget constraints, which in some years have us merely keeping pace with inflation, allow us to fund only a fraction of the applications we receive annually. Paylines provide the community with some clarity around NIAID’s funding approach and empower us to make awards quickly and fairly upon identifying meritorious research projects through the peer review process. The Institute weighs Congressional mandates and the most pressing public health and scientific community needs as we establish paylines, though we always face uncertainty as to our final spending levels until a budget is passed, often several months into the fiscal year.

Looking ahead, Congressional markups of the FY 2024 budget that were proposed last month provided flat or decreasing budget levels for NIAID. As a result, NIAID will likely begin FY 2024 with provisional paylines at or below FY 2023 levels.

For more on this topic, read NIAID Paylines and Budget Information Changes Throughout the Year and Paylines Are a Conservative Funding Cutoff Point.

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