“A lot of research would just have to stop,” one expert told the New York Times. Another told CNN it is a “disastrously bad idea.” Indirect costs are essentially the money needed to support the actual science and medical research — buildings costs, administrative costs, and so on. This is less exciting than, say, whatever the experimental cancer drug itself costs, but without it the cancer drug doesn’t make it to the trial — or at least takes a lot longer to get there — and thus to your sick kid. There are now universities and medical centers all across the country wondering, only slightly metaphorically, how long they can keep their doors open.
“When the NIH notice came out yesterday, leadership immediately started asking us for strategies on how to move forward,” one source inside an R1 university (a classification designating “very high research activity,” essentially the most important research institutions in the country) who works directly on grant writing and administration told Splinter. The source said a “pessimistic guess” is that their institution might have to lay off much of its grants staff by the end of this fiscal year in June, followed by “numerous” post-doctoral researchers and even tenure-track faculty who rely on NIH indirect costs for funding.
Laid off administrative staff, post-docs, and faculty means delayed science. Delayed science means delayed drug discovery, among other things. Delayed drug discovery means dead people.
Inside NIH itself, even staff who would in theory be involved in such policy were blindsided by the cut. “It was a complete shock to people in my division,” said one source. Another from a different NIH institute said “I hadn’t heard ANYTHING about the indirect costs cut.” Another source told Splinter that even heads of extramural research — the term for funding NIH gives out to outside institutions, as opposed to the intramural work its scientists do in NIH’s own labs — were surprised. “A bad Friday night news dump for science, for sure,” the source said.
The NIH directive attempts to justify the move by pointing out that private funders like the Robert Wood Johnson or Rockefeller Foundations cap their indirect costs at or below the new 15 percent rate. But private funders are not the government. One source at university told Splinter that they accept those lower rates from private funders because “something is better than nothing. But every time we get one of those low-IDC grants, there is scrambling behind the scenes to figure out how to keep the [principal investigator’s] lab functional.”
Multiply that scramble out across basically every university, and across any investigator with NIH funding, and you start to see how the entire edifice might start to wobble.
“The government’s support of facilities and administrative costs allows medical research to happen,” said the leadership of the Association of American Medical Colleges, which represents all the medical schools in the country, in a statement. The cut, they said, means “Americans will have to wait longer for cures and our country will cede scientific breakthroughs to foreign competitors. These are real consequences – slower scientific progress, longer waits for cures, fewer jobs.”
This move, though shocking, was telegraphed ahead of time like most of the gleeful teardown taking place these last three weeks. “Congress should cap the indirect cost rate paid to universities so that it does not exceed the lowest rate a university accepts from a private organization to fund research efforts,” reads one section of Project 2025. Its existence in that document should help the media covering the move uncover the purpose here, but alas — places like the New York Times insist on letting the arsonists describe the point of the fire, saying the policy change is “aimed at saving $4 billion.”
No it isn’t. Not really; these people aren’t interested in saving taxpayer money, they’re interested in making the government incapable of functioning, and in this case undercut universities in general, perhaps with a soupçon of gleeful punishment for supposedly “elite” institutions. Per Project 2025: “This market-based reform would help reduce federal taxpayer subsidization of leftist agendas.” Leftist agendas like, say, curing cancer, or Alzheimers, or Parkinson’s, or whatever the next pandemic virus is.
Multiple people inside NIH and relevant universities that they expect lawsuits on the policy change to follow soon. “No one seems to know whether it will legally stick,” one source at NIH said. The policy, which goes into effect on Monday, applies to existing grants as well as any newly issued ones (though with the study sections that help select new ones still a bit stop-and-start after a pause, it is hard to say when any new funding will go out), which raises some implementation questions and undoubtedly has existing grantees and their employers panicking today.
Both inside and out of NIH, sources urgently wanted to see the actual effect of such a banal-sounding policy dispersed far and wide. “I am glad to see people spreading the word about the real world impact of what probably sounds like a minor accounting revision to many news readers,” one source at a university said. “I hope that sanity prevails.”
UPDATE: On Monday, attorneys general from 22 states led by Massachusetts filed a lawsuit in federal court looking to block the indirect costs policy change. “The effects of the Rate Change Notice will be immediate and devastating,” the suit read. “This agency action will result in layoffs, suspension of clinical trials, disruption of ongoing research programs, and laboratory closures.” It cites a rider tacked onto a 2018 appropriations bill by Congress, which prohibits NIH or the Department of Health and Human Services from spending Congressionally appropriated money “to develop or implement a modified approach to” the reimbursement of “indirect costs” and “deviations from negotiated rates.” Congress enacted that thanks to Trump’s first attempt at doing the thing he is now claiming the authority to do.
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