So, the National Institutes of Health (NIH) has made a big move by capping what research institutions can charge for indirect costs at 15 percent.
These indirect costs cover things like utilities, facility maintenance, and personnel services. The NIH believes this change will save over $4 billion annually.
In 2024, out of the $35 billion allocated for research, about $9 billion went to these indirect costs, according to the NIH’s social media announcement.
Historically, the average indirect cost rate has hovered around 27 to 28 percent, with some institutions charging even higher rates, sometimes exceeding 50 to 60 percent.
The White House noted that this new policy aligns with what private foundations, such as the Bill and Melinda Gates Foundation, offer, which is also a 15 percent cap.
In related news, the Department of Government Efficiency (DOGE) reported that the Department of Health and Human Services canceled 62 contracts totaling $182 million.
One particular contract, worth $168,000, was for an Anthony Fauci exhibit at the NIH Museum. DOGE, the cost-saving agency led by Elon Musk, assured the public that these contracts were purely administrative and did not affect any healthcare programs.
The NIH has remained silent on these changes, not responding to requests for comments. However, some voices in academia are raising alarms about the potential negative impacts.
Jeffrey Flier, a professor at Harvard University, warned that reducing NIH grant indirect funding could lead to chaos in biomedical research across various institutions.
Senator Patty Murray from Washington expressed strong disapproval, labeling the move as illegal. She argued that this initiative would indiscriminately cut funding across research centers, regardless of their prestige, and could result in lab closures and job losses nationwide. She emphasized that critical research on issues like cancer and opioid addiction could be severely impacted.
On the other side of the aisle, some lawmakers have applauded the cuts. Representative Andy Harris of Maryland, who is also a physician, stated that slashing excessive indirect costs will save taxpayers billions in unnecessary overhead. He pointed out that the government has been paying much more than nonprofits for these costs.
Harris further argued that these cuts wouldn’t hinder research efforts. He clarified that the Trump administration did not reduce funding for biomedical research itself. Instead, the focus is on trimming down the bloated indirect costs without touching the core research funding.
While the debate continues, the changes highlight a push towards more efficient spending in government-funded research.
This decision could set a precedent for how research funds are managed moving forward. As discussions unfold, stakeholders will be watching closely to see how these financial adjustments impact the research landscape.
