How this little publicized news will change science, healthcare, and universities. This is not an AI post, but more important than anything that's going on in AI.
The taxpayer is represented by DFAS, which negotiates the indirect costs and has every incentive to negotiate a lower percentage because the money saved accrues to the overall NIH mandate, which is to support as much peer reviewed health related research as possible within congressional appropriations. Your unwarranted cynicism, demonstrated by no data or reference to fiscal abuse regarding the "NIH person" is a sad commentary on our current culture and exemplary of the forces that will cripple medical research if this mandate is allowed to proceed. Increasing government efficiency is a call that all can support but it is not likely to be achieved by a small group of uninformed 19-20 year olds calling for whole scale elimination of agencies or Draconian budget cuts.
When it comes to government spending, cynicism is always warranted. There are exceptions of course, but the notion that all the players are selflessly striving for the greater good of the citizenry is laughable. The players are people, not saints. Counter my cynicism by showing us a detailed breakdown of where the indirect cost money goes across a dozen or so large, medium, and small institutions. We've always done it this way is not a slam-dunk justification to keep doing it this way.
I get the skepticism, but indirect cost rates aren’t a backroom deal, every dollar is scrutinized by DHHS during negotiations, with detailed audits and tedious federal oversight. All federal grants at universities are highly scrutinized. And yes, one can track where the overhead funds go after they get collected. They pay for the items that universities already provide that in cost proposals when the rate was negotiated. It is known and traceable
The taxpayer is represented by DFAS, which negotiates the indirect costs and has every incentive to negotiate a higher percentage because the money saved accrues to the overall NIH mandate, which is to support as much peer reviewed health related research as possible within congressional appropriations. Your unwarranted cynicism, demonstrated by no data or reference to fiscal abuse regarding the "NIH person" is a sad commentary on our current culture and exemplary of the forces that will cripple medical research if this mandate is allowed to proceed. Increasing government efficiency is a call that all can support but it is not likely to be achieved by a small group of uninformed 19-20 year olds calling for whole scale elimination of agencies or Draconian budget cuts.
The US Fed Govt spends $6.75T a year. The NIH's entire budget is $48B. This directive will massively hurt all universities (not just well-endowed ones), research institutions, and push back medical and scientific research decades to save what, $4B at most. That's <0.1% of the entire budget. This has nothing to do with living beyond our means. This is like giving away your kidney for a tootsie pop roll.
Though your question sounds disingenuous, the so called "university slush fund" is used for all activities not directly linked to the objectives of a specific grant. It pays for facilities, shared research equipment, shared computational resources, utilities, shared staff, etc. Any institution that gets over $750K from federal grants has to have an annual audit. And if you want to take higher than the 10% indirect rate, you have to justify the amounts and open up your books to the NIH to get a higher rate. If you want to cut the waste the right way, the federal government needs to better police these annual justifications of the indirect rate rather than do lazy and knee-jerk policies. But of course, no one wants to solve problems the correct way. They just like to use buzz words and rile people up.
i see. so i guess what could happen is that the grantees can allocate their funds to the university / indirect costs?
i do think these universities are deeply sclerotic (been there for 10 years). slush fund is definitely pejorative, but not disingenuous and imo not inaccurate. the more funds you have to cover basic operating expenses the more you can use unrestricted funds to do whatever.
what is the concern with the indirect costs being covered willingly by grantees? is it that there’s some inefficiency related to getting the grant money out of the PI? genuinely curious. i agree it would be a lot better governance strategy to say reduce the allowable maximum by 10% a for 4 years until it’s 30%, rather than this slash and burn approach that appears to be the MO of Trump / Elon
i hear professors griping all the time about the take rate of the university. what would the solution be if not some form of this?
I agree that there prob is bloating of these funds in universities and some measures to take control of it is not a bad thing. I think the real number is higher than 15% though. The reason they picked 15% as their number to cut to is because private funders (Gates Foundation, MJFF, etc.) typically provide 15% and universities willingly take it. However, universities take 15% because they know that the 60% they are getting from the NIH will compensate. So the real number is in between, where who knows and is different from university to university (indirect in NYC or CA is going to have to be higher than rural universities due to higher salaries and property costs).
To answer your question, there are things that a grantee cannot cover in an individual grant and the accounting of it would be crazy. If 25 labs are in one building, how are they gonna split up the utility bill for the building? And if one lab has multiple grants, how do you split across grants? Does one grant use more electricity than another? That's just one small example, but now think of everything little thing (janitors, support staff, building lease/costs, shipping/receiving, god knows what else).
The current system is that at the end of the year, you add all those numbers up and send it to NIH and they give you a % based on that. Of course, universities are padding those numbers and creating the "slush funds". So what they need to do is have a closer monitoring of what is included in that annual indirect % calculation.
i agree the 15% seemed to be arbitrarily set by the logic of “well that’s what private does”. perhaps it is closer to 30 in hcol areas.
even granting that, don’t you think the system could be overhauled to a simpler model, say “charging rent for lab space”. there’s dozens of biotech incubators operating with pretty transparent usage based pricing that appear to function as well as or better than University labs i’ve been in.
to me the indirect costs thing seems more like: you go to dinner with an extremely rude person who orders and bunch of stuff you don’t need or want and then expects to split the bill at the end of the night.
that’s mostly how professors i know discuss it as well, although lord knows they are on balance terrible at navigating fiscal decisions
i think the “science is in danger” rhetoric is completely unhelpful and inaccurate here, not that you’re doing it but many are
The professors are technically employees of the university. If the university hired them, they have to provide them space/resources for them to be successful. It would be weird to be an employee yet have to rent your lab space. New faculty members (that have no grants) often get labs started by "slush funds". Professors that are on "hard times" and haven't had a grant in a while often tap into these funds as well.
I did my PhD at a top research university and entire new departments / buildings w/state of the art equipment were created with these indirect funds, which ultimately led to more faculty, research, ideas, etc. So though I haven't said "science is in danger", I do think this will have bigger ramifications than firing a whole bunch of useless admin staff (which very much exist). It will definitely slow down and limit science. Now will a 75% cut (60 to 15% indirect) cut science by 75%, no. But it will have ramifications, especially if you do a slash and burn.
I live in a blue state. I don't wear a MAGA hat. The spouse of one of my children is the PI for an NIH grant (I don't know what the indirect cost % is.) Good people may lose their jobs, or not get grants, or not publish enough to get tenure. It may well be painful. I spent my working life in the private sector, where layoffs and budget cutbacks and project cancellations are part of the deal. Reality is here for the academic world. We're out of money. Don't spend your time responding to insensitive idiots like me. Spend your time coming up with a well-reasoned counter proposal with numbers that responds to the need to make do with less, and doesn't rely upon "people will die if grants don't cover our overhead" arguments.
“Out of money” for science research that is…I highly doubt they’re making any cuts to military spending. And they’re cutting taxes for corporations which is why they want to decimate everything else. The reality is that we will lose a generation of scientists as they leave the sector. You know who isn’t cutting science spending? China. Because they know that supporting medical research and innovation lead to growth, improved living standards, and global influence.
I get it. Trump and company are the personification of evil and have values and priorities that are abhorrent to you and any rational, intelligent human being. Could you explain something to someone who is neither? I'm not sure how the math works out in practice, but assume after the 15% limit comes in we can only do 2/3rds of the science we do today. Aren't scientists (or at least their managers/grant-providers) capable of prioritizing and distinguishing between the essential-to-learn and the simply interesting-to-learn? (Yes I know that the interesting to learn thing might be something that revolutionizes the field, but that's not the way to bet.) You can never win the "everything we do is essential" argument.
We already are prioritizing. Only about 20% of NIH grants that scientists apply for are funded. Progress in science usually comes from slow iteration and building on other people’s work. A lot of the biggest leaps forward in research came from esoteric basic science studies.
I am an NIH funded PI at Harvard. The idea that scientists competing at the highest levels for funding to pursue their ideas are not prioritizing what in their research is essential-to-learn, is specious and ill-informed.
Within the academia, the "everything we do is essential" argument still holds it ground. Not because every research is equally important, but rather you can hardly tell where they lead to until they are actually done. That's why the funding score and research outcome hardly align with each other. Every bit of selection in the funding stage comes with some potential collateral damage, and beyond some threshold it becomes like a lottery ticket.
Also it is quite obvious that the 15% limit cut will cause some kinetic issues beyond reducing the science we do. You can't choke someone for 5 min and then assume that they are livable with only 0.2% less daily oxygen uptake right?
I understand the concern that a change like this will be disruptive. That said, as a country, we’re living beyond our means and things have to change. I have essentially no sympathy for some well-endowed R1 university not reaching into their own pockets or economizing on overhead. Also I note with interest that ChatGPT-4o seems to have a boilerplate response to any question about historical indirect cost rates. ChatGPT-o1-mini does a little better (but not much) if explicitly told to provide details and ignore any preprogrammed boilerplate
When labs can't keep their lights on, refrigerators working, and postdocs paid, it will grind medical research to a halt. That will mean no new antibiotics when antibiotic resistance is on the rise, no new cancer drugs, and a halt of public research into everything, including AI. Ken -- you and your family will pay the price when you can't get lifesaving treatments and all medical care is prohibitively expensive because research and discovery have been privatized. I just hope your loved ones don't get cancer.
My wife died from ALL leukemia 27 years ago, so I understand how important research and such is. But I would be pleasantly surprised to learn that there is absolutely no unnecessary cost in the overhead spending. Is 15% the right number? Beats me. Is business as usual the right number? No it is not.
Each rate is negotiated based on the region, current pricing for infrastructure and labor in the specific state, the types of research projects, etc. The rate setting process is well vetted and designed to meet the infrastructure needs of the institution. The infrastructure provided by the overheads also help offset the amount that each state needs to give to maintain the institution. Universities and their overhead ADD billions to their local and regional economies, and for as much as people scream about tuition costs, these funds provide things like labs and libraries that benefit undergraduate students and help to offset the cost of their tuition. Like many government entities, there is room for tightening budgets, but think about what it would be like to be told that your pay was going to be slashed by 70% or more TOMORROW! That’s untenable.
I’m all for reviewing the rates for fiscal responsibility, but like Cinderella’s sisters…if the foot is too big for the shoe, do you chop off the toes and the heel??
No…that’s ridiculous…and so is this.
If we want to do it, let’s do it right. Let’s do it responsibly and reasonably. Let’s use our brains…for a change. Republicans have control of it all right now…I want them to show us they can lead. I want to see that they can govern. I don’t want dictators, I want statesmen and women. Prove to all of us that these changes can be done in a rational manner, and that they are the ones to do it. They’ve said that they are…but I have yet to see anything but a ridiculous version of Smash Bros for the last two weeks. That’s not responsible governance. That’s not American. Prove us all wrong! Make us actually believe in the promise of democracy and the republic again…otherwise, it’s business as usual…and usual is crap on both sides of the aisle.
As I noted elsewhere, I worked in the private sector, where your pay can be slashed to zero and a security guard watches you pack up your stuff some Friday afternoon for a variety of reasons, from bad management to project cancellation. It sucks, even if it is just the guy in the next cubicle who gets the axe.
If the goal is to boost the local and regional economies, wouldn't it be better to just give the money to those economies? Eliminate the middleman.
You don't have to like Trump and company. But they now have your full attention. Every institution should make the case in detail for whatever their negotiated rate is. In detail means show me the numbers and where each dollar goes. Is the 15% number the right number? Probably not. So make your case for what the right number is. No handwaving allowed.
Critiquing something you know nothing about seems the norm.The process of setting indirect costs is individually determined by the feds per institution. What aspect of that process is unfair or inefficient or not the right number? Arbitrarily asserting that 15% is sufficient is absurdly irrational.
You're correct I know next to nothing about the indirect cost setting process. Perhaps you know it in detail. Who is "in the room" when the rates are set besides the university, etc. person, who wants as much as they can get, and the NIH person who is probably not inclined/motivated to question every item paid for via the indirect cost budget? Who is looking out for the taxpayer?
All of the groundbreaking medicines for ALL leukemia have been developed at academic research centers. I’m sure there’s waste in the system, just like there always is. However, the answer is not just to break it entirely before you have done some discovery about what the right IDC funding levels are. This administration just wants to break everything with seemingly no plans for fixing things.I would think that you would want those cancer medicines for other people who might be able to be treated from that terrible disease. Precipitously cutting this funding will absolutely drive research to a halt. And by the way, it’s the big research universities in the red state that are going to be the most vulnerable at the outset.
Ok, friend…today is my birthday and Super Bowl Sunday and I have better things to do than piss into the wind talking to someone who has to use ChatGTP to learn about what leishmaniasis is. I guess I did at least get you “science” today. Toodles, dear!
I also worked in the private sector. I’ve worked in both. We are not the “middleman” as you say. We are the educators and without us, you can absolutely be assured that immigration will occur. Because those private sector companies are still going to need engineers. We’re still going to need doctors…but if you’d prefer all foreign H1B visa holders to be in those jobs…fine by me! Enjoy
I'm not sure how this will all settle out. Maybe the institutions can make a case that is stronger than "trust me, I'm a doctor" for a higher number. Maybe a judge will declare that lowering the rate to 15% is unconstitutional. Or maybe NIH won't be able to fund sandflies-eating-beagle-faces research, or won't be able to outsource gain-of-function research to China. But the sun will still come up tomorrow however this plays out. The same creativity that researchers apply in their day-to-day work can be applied to doing more with less. You are the best of the best, and we expect nothing less.
And I for one have no problem with qualified FMGs practicing medicine here. My significant other is one such person, and I'm rather fond of her.
Q:Have the NIH sandflies experiments on beagles yielded any advances in the treatment of leishmanaisis?
AThe National Institutes of Health (NIH) has conducted studies involving beagles and sand flies to better understand leishmaniasis, a disease caused by Leishmania parasites transmitted through sand fly bites. These studies have primarily focused on the disease’s transmission dynamics, pathogenesis, and potential preventive measures.
Key Findings from NIH-Funded Research:
1. Transmission Dynamics:
• Research demonstrated that Leishmania infantum can persist at sand fly bite sites on dogs for up to six months. These localized lesions are highly infectious to sand flies, suggesting that the skin at bite sites plays a significant role in disease transmission. 
2. Host Attraction:
• Studies found that dogs infected with L. infantum emit odors that make them more attractive to sand flies. This increased attraction could enhance the parasite’s transmission efficiency. 
3. Vaccine Development:
• An NIH-supported study involved immunizing beagles with an experimental vaccine and exposing them to natural sand fly populations in a hyper-endemic area. The goal was to assess the vaccine’s efficacy in preventing infection under natural conditions. 
Advancements in Treatment:
While these studies have deepened the understanding of leishmaniasis transmission and potential prevention strategies, they have not directly led to new treatments for the disease. The primary contributions have been in identifying factors that influence transmission dynamics and exploring vaccine candidates.
In summary, NIH-funded experiments involving beagles have provided valuable insights into leishmaniasis transmission and prevention. However, these studies have not directly resulted in new treatments for the disease.
The full rates never apply to the total direct costs, they apply to a modified base. So the actual rate ends up a lot lower. For this reason some of the estimates in the article are not correct. The items that get excluded from the base for the indirect rate: Capital equipment,
Participant support costs, Patient care charges, Rental of space, Scholarships and fellowships
The portion of subcontract in excess of $25,000, Tuition remission.
Gates' or other non-profits' 10%-15% applies to the full amount of direct costs. It is unclear if the new NIH 15% will apply to total direct costs or MTDC
China is already outpacing the US in areas of research ranging from battery technology to neutrino physics to artificial intelligence. The next world war will be a more subtle one, not fought with guns and bombs, but instead with technology and information control. China is investing massively in their "double first class" universities -- creating state of the art laboratories that no R1 public research university in the US can match. Trump is working as hard as he can to diminish the technological power of our country, which further helps China in its efforts to dominate us. Musk doesn't care -- half of the Teslas he sells are made in China. He's probably already planning to move his corporate headquarters to Shanghai.
Solid assessment. Thanks for putting this together. Even though i think likely that this will have court challenge, etc., there seem to be short term disruptions, e.g. to clinical trials that get put on hold, til sorted out. Many trials have protocols like “collect samples each day…”, and the data gap may make prior work less/not useful. In the end these disruptions even if fixed cost us money, time.
Correct. And China spends on the direct costs, including bidding whatever it takes to get the top global talent who actually lead the most innovative work. Not on ever-growing F&A and especially the "A" part to support more Associate Deans and Assistant Dept Chairs for research and their staff, and the proliferating research "compliance" offices and personnel of all flavors (DEI, Title 9, ADA, IRB, ESH, etc) which actually subtract from progress by wasting the researchers' time in order to create and justify own jobs.
Great article. One comment. In your section on Shifting Costs to Grant you wrote.
"But the DOGE-y NIH may scrutinize such budget moves, and there’s a zero-sum problem: if every grant’s direct budget swells to include quasi-overhead items, fewer grants will be funded overall (since the total NIH budget is still finite)."
I question this. The NIH budget is finite, but the money that would go to indirect costs would go to direct costs (hopefully). So that money is available to give more grants at the same direct costs but lower indirect costs. As you say, likely some combination of direct costs going up to be more expansive and universities requesting fewer grants will happen.
So, John Hopkins would be forced to eat $200M/annually? Can you explain to me why an institution that has a $13.1B endowment needs supplemental funding from the government and they can't pick this cost of themselves? Is an endowment of $12.9 BILLION too little? Harvard has $53.2B endowment. Yale has $41.4B. This will also force universities to prioritize what grants they will do, so all these goofy research projects will get cut long before anything important is touched. Seems like the private foundations can start picking up their fair share of indirect costs as well. This also sounds like a rich institution problem only being ridiculously rich instead of insanely rich like the use to be. I have a feeling this will turn out just fine.
The taxpayer is represented by DFAS, which negotiates the indirect costs and has every incentive to negotiate a lower percentage because the money saved accrues to the overall NIH mandate, which is to support as much peer reviewed health related research as possible within congressional appropriations. Your unwarranted cynicism, demonstrated by no data or reference to fiscal abuse regarding the "NIH person" is a sad commentary on our current culture and exemplary of the forces that will cripple medical research if this mandate is allowed to proceed. Increasing government efficiency is a call that all can support but it is not likely to be achieved by a small group of uninformed 19-20 year olds calling for whole scale elimination of agencies or Draconian budget cuts.
When it comes to government spending, cynicism is always warranted. There are exceptions of course, but the notion that all the players are selflessly striving for the greater good of the citizenry is laughable. The players are people, not saints. Counter my cynicism by showing us a detailed breakdown of where the indirect cost money goes across a dozen or so large, medium, and small institutions. We've always done it this way is not a slam-dunk justification to keep doing it this way.
I get the skepticism, but indirect cost rates aren’t a backroom deal, every dollar is scrutinized by DHHS during negotiations, with detailed audits and tedious federal oversight. All federal grants at universities are highly scrutinized. And yes, one can track where the overhead funds go after they get collected. They pay for the items that universities already provide that in cost proposals when the rate was negotiated. It is known and traceable
The taxpayer is represented by DFAS, which negotiates the indirect costs and has every incentive to negotiate a higher percentage because the money saved accrues to the overall NIH mandate, which is to support as much peer reviewed health related research as possible within congressional appropriations. Your unwarranted cynicism, demonstrated by no data or reference to fiscal abuse regarding the "NIH person" is a sad commentary on our current culture and exemplary of the forces that will cripple medical research if this mandate is allowed to proceed. Increasing government efficiency is a call that all can support but it is not likely to be achieved by a small group of uninformed 19-20 year olds calling for whole scale elimination of agencies or Draconian budget cuts.
The US Fed Govt spends $6.75T a year. The NIH's entire budget is $48B. This directive will massively hurt all universities (not just well-endowed ones), research institutions, and push back medical and scientific research decades to save what, $4B at most. That's <0.1% of the entire budget. This has nothing to do with living beyond our means. This is like giving away your kidney for a tootsie pop roll.
is it the NIH budget being cut or is it the percent that goes into the university slush fund?
Though your question sounds disingenuous, the so called "university slush fund" is used for all activities not directly linked to the objectives of a specific grant. It pays for facilities, shared research equipment, shared computational resources, utilities, shared staff, etc. Any institution that gets over $750K from federal grants has to have an annual audit. And if you want to take higher than the 10% indirect rate, you have to justify the amounts and open up your books to the NIH to get a higher rate. If you want to cut the waste the right way, the federal government needs to better police these annual justifications of the indirect rate rather than do lazy and knee-jerk policies. But of course, no one wants to solve problems the correct way. They just like to use buzz words and rile people up.
i see. so i guess what could happen is that the grantees can allocate their funds to the university / indirect costs?
i do think these universities are deeply sclerotic (been there for 10 years). slush fund is definitely pejorative, but not disingenuous and imo not inaccurate. the more funds you have to cover basic operating expenses the more you can use unrestricted funds to do whatever.
what is the concern with the indirect costs being covered willingly by grantees? is it that there’s some inefficiency related to getting the grant money out of the PI? genuinely curious. i agree it would be a lot better governance strategy to say reduce the allowable maximum by 10% a for 4 years until it’s 30%, rather than this slash and burn approach that appears to be the MO of Trump / Elon
i hear professors griping all the time about the take rate of the university. what would the solution be if not some form of this?
I agree that there prob is bloating of these funds in universities and some measures to take control of it is not a bad thing. I think the real number is higher than 15% though. The reason they picked 15% as their number to cut to is because private funders (Gates Foundation, MJFF, etc.) typically provide 15% and universities willingly take it. However, universities take 15% because they know that the 60% they are getting from the NIH will compensate. So the real number is in between, where who knows and is different from university to university (indirect in NYC or CA is going to have to be higher than rural universities due to higher salaries and property costs).
To answer your question, there are things that a grantee cannot cover in an individual grant and the accounting of it would be crazy. If 25 labs are in one building, how are they gonna split up the utility bill for the building? And if one lab has multiple grants, how do you split across grants? Does one grant use more electricity than another? That's just one small example, but now think of everything little thing (janitors, support staff, building lease/costs, shipping/receiving, god knows what else).
The current system is that at the end of the year, you add all those numbers up and send it to NIH and they give you a % based on that. Of course, universities are padding those numbers and creating the "slush funds". So what they need to do is have a closer monitoring of what is included in that annual indirect % calculation.
i agree the 15% seemed to be arbitrarily set by the logic of “well that’s what private does”. perhaps it is closer to 30 in hcol areas.
even granting that, don’t you think the system could be overhauled to a simpler model, say “charging rent for lab space”. there’s dozens of biotech incubators operating with pretty transparent usage based pricing that appear to function as well as or better than University labs i’ve been in.
to me the indirect costs thing seems more like: you go to dinner with an extremely rude person who orders and bunch of stuff you don’t need or want and then expects to split the bill at the end of the night.
that’s mostly how professors i know discuss it as well, although lord knows they are on balance terrible at navigating fiscal decisions
i think the “science is in danger” rhetoric is completely unhelpful and inaccurate here, not that you’re doing it but many are
The professors are technically employees of the university. If the university hired them, they have to provide them space/resources for them to be successful. It would be weird to be an employee yet have to rent your lab space. New faculty members (that have no grants) often get labs started by "slush funds". Professors that are on "hard times" and haven't had a grant in a while often tap into these funds as well.
I did my PhD at a top research university and entire new departments / buildings w/state of the art equipment were created with these indirect funds, which ultimately led to more faculty, research, ideas, etc. So though I haven't said "science is in danger", I do think this will have bigger ramifications than firing a whole bunch of useless admin staff (which very much exist). It will definitely slow down and limit science. Now will a 75% cut (60 to 15% indirect) cut science by 75%, no. But it will have ramifications, especially if you do a slash and burn.
I live in a blue state. I don't wear a MAGA hat. The spouse of one of my children is the PI for an NIH grant (I don't know what the indirect cost % is.) Good people may lose their jobs, or not get grants, or not publish enough to get tenure. It may well be painful. I spent my working life in the private sector, where layoffs and budget cutbacks and project cancellations are part of the deal. Reality is here for the academic world. We're out of money. Don't spend your time responding to insensitive idiots like me. Spend your time coming up with a well-reasoned counter proposal with numbers that responds to the need to make do with less, and doesn't rely upon "people will die if grants don't cover our overhead" arguments.
“Out of money” for science research that is…I highly doubt they’re making any cuts to military spending. And they’re cutting taxes for corporations which is why they want to decimate everything else. The reality is that we will lose a generation of scientists as they leave the sector. You know who isn’t cutting science spending? China. Because they know that supporting medical research and innovation lead to growth, improved living standards, and global influence.
I get it. Trump and company are the personification of evil and have values and priorities that are abhorrent to you and any rational, intelligent human being. Could you explain something to someone who is neither? I'm not sure how the math works out in practice, but assume after the 15% limit comes in we can only do 2/3rds of the science we do today. Aren't scientists (or at least their managers/grant-providers) capable of prioritizing and distinguishing between the essential-to-learn and the simply interesting-to-learn? (Yes I know that the interesting to learn thing might be something that revolutionizes the field, but that's not the way to bet.) You can never win the "everything we do is essential" argument.
We already are prioritizing. Only about 20% of NIH grants that scientists apply for are funded. Progress in science usually comes from slow iteration and building on other people’s work. A lot of the biggest leaps forward in research came from esoteric basic science studies.
I am an NIH funded PI at Harvard. The idea that scientists competing at the highest levels for funding to pursue their ideas are not prioritizing what in their research is essential-to-learn, is specious and ill-informed.
Within the academia, the "everything we do is essential" argument still holds it ground. Not because every research is equally important, but rather you can hardly tell where they lead to until they are actually done. That's why the funding score and research outcome hardly align with each other. Every bit of selection in the funding stage comes with some potential collateral damage, and beyond some threshold it becomes like a lottery ticket.
Also it is quite obvious that the 15% limit cut will cause some kinetic issues beyond reducing the science we do. You can't choke someone for 5 min and then assume that they are livable with only 0.2% less daily oxygen uptake right?
I understand the concern that a change like this will be disruptive. That said, as a country, we’re living beyond our means and things have to change. I have essentially no sympathy for some well-endowed R1 university not reaching into their own pockets or economizing on overhead. Also I note with interest that ChatGPT-4o seems to have a boilerplate response to any question about historical indirect cost rates. ChatGPT-o1-mini does a little better (but not much) if explicitly told to provide details and ignore any preprogrammed boilerplate
When labs can't keep their lights on, refrigerators working, and postdocs paid, it will grind medical research to a halt. That will mean no new antibiotics when antibiotic resistance is on the rise, no new cancer drugs, and a halt of public research into everything, including AI. Ken -- you and your family will pay the price when you can't get lifesaving treatments and all medical care is prohibitively expensive because research and discovery have been privatized. I just hope your loved ones don't get cancer.
My wife died from ALL leukemia 27 years ago, so I understand how important research and such is. But I would be pleasantly surprised to learn that there is absolutely no unnecessary cost in the overhead spending. Is 15% the right number? Beats me. Is business as usual the right number? No it is not.
Each rate is negotiated based on the region, current pricing for infrastructure and labor in the specific state, the types of research projects, etc. The rate setting process is well vetted and designed to meet the infrastructure needs of the institution. The infrastructure provided by the overheads also help offset the amount that each state needs to give to maintain the institution. Universities and their overhead ADD billions to their local and regional economies, and for as much as people scream about tuition costs, these funds provide things like labs and libraries that benefit undergraduate students and help to offset the cost of their tuition. Like many government entities, there is room for tightening budgets, but think about what it would be like to be told that your pay was going to be slashed by 70% or more TOMORROW! That’s untenable.
I’m all for reviewing the rates for fiscal responsibility, but like Cinderella’s sisters…if the foot is too big for the shoe, do you chop off the toes and the heel??
No…that’s ridiculous…and so is this.
If we want to do it, let’s do it right. Let’s do it responsibly and reasonably. Let’s use our brains…for a change. Republicans have control of it all right now…I want them to show us they can lead. I want to see that they can govern. I don’t want dictators, I want statesmen and women. Prove to all of us that these changes can be done in a rational manner, and that they are the ones to do it. They’ve said that they are…but I have yet to see anything but a ridiculous version of Smash Bros for the last two weeks. That’s not responsible governance. That’s not American. Prove us all wrong! Make us actually believe in the promise of democracy and the republic again…otherwise, it’s business as usual…and usual is crap on both sides of the aisle.
Note me not holding my breath…
As I noted elsewhere, I worked in the private sector, where your pay can be slashed to zero and a security guard watches you pack up your stuff some Friday afternoon for a variety of reasons, from bad management to project cancellation. It sucks, even if it is just the guy in the next cubicle who gets the axe.
If the goal is to boost the local and regional economies, wouldn't it be better to just give the money to those economies? Eliminate the middleman.
You don't have to like Trump and company. But they now have your full attention. Every institution should make the case in detail for whatever their negotiated rate is. In detail means show me the numbers and where each dollar goes. Is the 15% number the right number? Probably not. So make your case for what the right number is. No handwaving allowed.
Critiquing something you know nothing about seems the norm.The process of setting indirect costs is individually determined by the feds per institution. What aspect of that process is unfair or inefficient or not the right number? Arbitrarily asserting that 15% is sufficient is absurdly irrational.
You're correct I know next to nothing about the indirect cost setting process. Perhaps you know it in detail. Who is "in the room" when the rates are set besides the university, etc. person, who wants as much as they can get, and the NIH person who is probably not inclined/motivated to question every item paid for via the indirect cost budget? Who is looking out for the taxpayer?
All of the groundbreaking medicines for ALL leukemia have been developed at academic research centers. I’m sure there’s waste in the system, just like there always is. However, the answer is not just to break it entirely before you have done some discovery about what the right IDC funding levels are. This administration just wants to break everything with seemingly no plans for fixing things.I would think that you would want those cancer medicines for other people who might be able to be treated from that terrible disease. Precipitously cutting this funding will absolutely drive research to a halt. And by the way, it’s the big research universities in the red state that are going to be the most vulnerable at the outset.
Ok, friend…today is my birthday and Super Bowl Sunday and I have better things to do than piss into the wind talking to someone who has to use ChatGTP to learn about what leishmaniasis is. I guess I did at least get you “science” today. Toodles, dear!
I also worked in the private sector. I’ve worked in both. We are not the “middleman” as you say. We are the educators and without us, you can absolutely be assured that immigration will occur. Because those private sector companies are still going to need engineers. We’re still going to need doctors…but if you’d prefer all foreign H1B visa holders to be in those jobs…fine by me! Enjoy
I'm not sure how this will all settle out. Maybe the institutions can make a case that is stronger than "trust me, I'm a doctor" for a higher number. Maybe a judge will declare that lowering the rate to 15% is unconstitutional. Or maybe NIH won't be able to fund sandflies-eating-beagle-faces research, or won't be able to outsource gain-of-function research to China. But the sun will still come up tomorrow however this plays out. The same creativity that researchers apply in their day-to-day work can be applied to doing more with less. You are the best of the best, and we expect nothing less.
And I for one have no problem with qualified FMGs practicing medicine here. My significant other is one such person, and I'm rather fond of her.
Just so we’re clear…sand flies (fleas) carry leishmaniasis. They funded that to find new treatments for our soldiers in the Middle East.
And just to be clearer, per ChatGPT 4o
Q:Have the NIH sandflies experiments on beagles yielded any advances in the treatment of leishmanaisis?
AThe National Institutes of Health (NIH) has conducted studies involving beagles and sand flies to better understand leishmaniasis, a disease caused by Leishmania parasites transmitted through sand fly bites. These studies have primarily focused on the disease’s transmission dynamics, pathogenesis, and potential preventive measures.
Key Findings from NIH-Funded Research:
1. Transmission Dynamics:
• Research demonstrated that Leishmania infantum can persist at sand fly bite sites on dogs for up to six months. These localized lesions are highly infectious to sand flies, suggesting that the skin at bite sites plays a significant role in disease transmission. 
2. Host Attraction:
• Studies found that dogs infected with L. infantum emit odors that make them more attractive to sand flies. This increased attraction could enhance the parasite’s transmission efficiency. 
3. Vaccine Development:
• An NIH-supported study involved immunizing beagles with an experimental vaccine and exposing them to natural sand fly populations in a hyper-endemic area. The goal was to assess the vaccine’s efficacy in preventing infection under natural conditions. 
Advancements in Treatment:
While these studies have deepened the understanding of leishmaniasis transmission and potential prevention strategies, they have not directly led to new treatments for the disease. The primary contributions have been in identifying factors that influence transmission dynamics and exploring vaccine candidates.
In summary, NIH-funded experiments involving beagles have provided valuable insights into leishmaniasis transmission and prevention. However, these studies have not directly resulted in new treatments for the disease.
It does not quite work that way.
The full rates never apply to the total direct costs, they apply to a modified base. So the actual rate ends up a lot lower. For this reason some of the estimates in the article are not correct. The items that get excluded from the base for the indirect rate: Capital equipment,
Participant support costs, Patient care charges, Rental of space, Scholarships and fellowships
The portion of subcontract in excess of $25,000, Tuition remission.
Gates' or other non-profits' 10%-15% applies to the full amount of direct costs. It is unclear if the new NIH 15% will apply to total direct costs or MTDC
China is already outpacing the US in areas of research ranging from battery technology to neutrino physics to artificial intelligence. The next world war will be a more subtle one, not fought with guns and bombs, but instead with technology and information control. China is investing massively in their "double first class" universities -- creating state of the art laboratories that no R1 public research university in the US can match. Trump is working as hard as he can to diminish the technological power of our country, which further helps China in its efforts to dominate us. Musk doesn't care -- half of the Teslas he sells are made in China. He's probably already planning to move his corporate headquarters to Shanghai.
Solid assessment. Thanks for putting this together. Even though i think likely that this will have court challenge, etc., there seem to be short term disruptions, e.g. to clinical trials that get put on hold, til sorted out. Many trials have protocols like “collect samples each day…”, and the data gap may make prior work less/not useful. In the end these disruptions even if fixed cost us money, time.
Correct. And China spends on the direct costs, including bidding whatever it takes to get the top global talent who actually lead the most innovative work. Not on ever-growing F&A and especially the "A" part to support more Associate Deans and Assistant Dept Chairs for research and their staff, and the proliferating research "compliance" offices and personnel of all flavors (DEI, Title 9, ADA, IRB, ESH, etc) which actually subtract from progress by wasting the researchers' time in order to create and justify own jobs.
Great article. One comment. In your section on Shifting Costs to Grant you wrote.
"But the DOGE-y NIH may scrutinize such budget moves, and there’s a zero-sum problem: if every grant’s direct budget swells to include quasi-overhead items, fewer grants will be funded overall (since the total NIH budget is still finite)."
I question this. The NIH budget is finite, but the money that would go to indirect costs would go to direct costs (hopefully). So that money is available to give more grants at the same direct costs but lower indirect costs. As you say, likely some combination of direct costs going up to be more expansive and universities requesting fewer grants will happen.
So, John Hopkins would be forced to eat $200M/annually? Can you explain to me why an institution that has a $13.1B endowment needs supplemental funding from the government and they can't pick this cost of themselves? Is an endowment of $12.9 BILLION too little? Harvard has $53.2B endowment. Yale has $41.4B. This will also force universities to prioritize what grants they will do, so all these goofy research projects will get cut long before anything important is touched. Seems like the private foundations can start picking up their fair share of indirect costs as well. This also sounds like a rich institution problem only being ridiculously rich instead of insanely rich like the use to be. I have a feeling this will turn out just fine.