For the first time in 36 years, funding cuts have hit the National Institutes of Health (NIH). While some experts aren’t bothered by losing just 0.1%, or about $35 million, others fear retrenchment could slow the pace of biomedical breakthroughs.

“Investigators are chasing a shrinking pool of funds,” says Kei Koizumi, director of the R&D Budget and Policy Program for the American Association for the Advancement of Science (AAAS). “That could mean many promising biomedical research ideas just won’t be pursued.”

The downsizing follows increases that doubled the NIH budget to $27.2 billion from 1998 through 2003. Since 2001, Congress has allocated $1.6 billion to $2 billion annually to combat terrorism threats and, more recently, a potential avian flu pandemic. Yet, as Koizumi points out, this boom-and-bust cycle leaves research funding just about where it would have been had the annual 6% to 7% increases of the 1990s continued.

Flu and terror are ongoing priorities, responsible for the only NIH departmental funding increases for 2006. The National Institute of Allergy and Infectious Diseases won an extra 0.3%; and the Office of the Director’s budget increased by a third, primarily to finance medical countermeasures against terrorist attacks.

During the boom, universities competed for expanding research grants. But as budget gains slowed, “it became much harder to win grants,” says Koizumi, who notes that even a flat budget squeezes research because the costs of medical investigations are constantly rising.

Funding this fiscal year is expected to fall “well below” the 10,020 grants awarded in 2004, according to an AAAS analysis.

“If this were just one year, I could see people calling us alarmist,” says David Moore, senior associate vice president for governmental relations at the Association of American Medical Colleges. “But this is a worsening trend.”

Not everyone is up in arms. “The more important policy story is that NIH director Elias Zerhouni is trying to do something revolutionary with the NIH Roadmap for Medical Research,” says Sandra J. Newman, professor and director of the Institute for Policy Studies at Johns Hopkins University. Zerhouni wants to foster better cooperation among the institutes and to identify opportunities in research that no institute could tackle alone.

“NIH is the premier agency for fundamental research on health care,” adds Joseph Antos, a health policy expert for the American Enterprise Institute, a think tank with close ties to the Bush administration. “Over the long term, it’s absolutely secure.