The National Institutes of Health’s (NIH) decision to cap indirect research costs at 15% may disrupt medical studies. Previously, institutions negotiated reimbursement rates individually, with indirect costs averaging 27%-28% but sometimes exceeding 60%. The NIH aims to allocate more funds to direct research rather than administrative overhead. In 2023, $9 billion of the $35 billion NIH allocated to researchers covered indirect costs.
Critics argue the change could severely impact research. On Monday, 22 state attorneys general sued to block the policy, warning of immediate negative effects. A federal judge issued a temporary restraining order, preventing the NIH from enforcing the cap in those states. A hearing is scheduled for February 21.
Medical schools, universities, and research institutions had already budgeted based on previously agreed indirect cost rates. The lawsuit claims the cap would cause layoffs, trial suspensions, research disruptions, and laboratory shutdowns. Another federal judge also mandated continued funding to affected institutions and agencies, including the NIH.
Dr. Elena Fuentes-Afflick, the Association of American Medical Colleges’ chief scientific officer, emphasizes indirect funding’s essential role. Many assume research grants cover all expenses, but indirect costs support crucial infrastructure. Without them, researchers may struggle to enroll patients in clinical trials or develop new treatments.
She explains indirect costs—also called facilities and administrative expenses—fund critical infrastructure. They cover utilities, hazardous waste disposal, personnel for regulatory compliance, and maintenance staff. These costs differ from direct research funds but remain vital.
Each research project requires significant institutional support beyond its direct expenses. Cutting indirect funding could limit institutions’ ability to conduct research effectively. Fuentes-Afflick stresses that indirect funding is as necessary as direct funding for scientific progress.
If implemented, the NIH’s policy could severely restrict researchers’ capacity to conduct studies, hindering medical advancements.
