Let us say that TPM Readers are almost unimaginably over-represented in the country’s colleges and universities, and perhaps even more so in the research arms, which is of course primarily in the sciences and medical research fields. So we’re getting quite a lot of you writing in with various details and context for this new NIH directive that went into effect overnight which drastically reduces federal support for university research arms and academic medical centers. I’m going to be publishing more of them but I wanted to start with this one from TPM Reader RM …
I am a retired cancer researcher. I have held many NIH grants, served on study sections etc. I wanted to elaborate on what you posted about the indirect costs.
Cancer, cardiac, diabetes, immunology, you name it, research will take a big hit from the cap on NIH indirect costs. It may sound reasonable to those unfamiliar with NIH grants to cut administrative costs. But let me explain. NIH grants are divided into direct and indirect costs. The direct costs include paying for the scientists, the supplies and specialized equipment that are needed to carry out the proposed research. The indirects pay for the infrastructure. This means the lab or the clinical facilities needed. These are provided by the institution, usually a university. This allows for scale with the infrastructure for many scientists provided collectively. So to perform most of this research you need a lab in a building. The indirects pay for the electricity (which in a wet lab are likely to be substantially higher than a normal building) heating, cleaning, security etc. Normal building costs. They also pay for more specialized functions such as hazardous waste disposal, use of gases, computer networks, special facilities for clinical trials and libraries for scientific journals and books (most provided on line). There are also building costs itself such as maintenance. And finally administrative costs especially accounting and HR. So what you might think of as administrative costs are really only a small part of it.
Right now the overhead cost rate is determined by a negotiation between the institution and the NIH. The NIH looks at the costs that the institution demonstrates that it spends. Certainly there may be some overspend here, but not on the scale being suggested by these cuts.
Using a back of the envelope calculation with indirect costs between 30 and 60% going to 15% would amount to a 10 to 30 percent cut in individual grants overall. This is huge. Further because it is directed at the infrastructure only, it is unsupportable for the institutions. At least now indirect and direct costs cannot be transferred between categories. This is from a 50 to a 75% cut in the funding for the labs and clinical centers. Research centers may have to shut down labs to comply. Further it should be noted that these cuts are supposed to take effect immediately. Giving no time to plan for an orderly transition is also going to take an additional toll.
The US is the mecca for scientific research and for medical research. NIH funded grants are behind over 95% of all pharmaceuticals. The entire US pharmaceutical industry is dependent on the NIH for both basic and applied research. Up until now the scientific enterprise ( except for climate science and ecology ) in the US seemed to be able to avoid the culture wars but now is being dragged in. These cuts will greatly weaken the US’s lead in medical research and science. They will hit the youngest researchers the hardest and discourage others from making this their life’s work. This is not America first but more like America last.
About the comparison with foundation overheads: The NIH is by far the major funder so any other grant was just regarded as a cherry of trivial consequence by the institutions that I have worked in. I believe that pharmaceutical company grants however are at least matching or sometimes exceeding NIH indirect costs.
