The National Institutes of Health is implementing a standardized 15% indirect cost rate across all federal research grants. However, a federal judge temporarily blocked the change nationwide with a restraining order issued Feb. 10. Credit: Courtesy of Lydia Polimeni and the National Institutes of Health
Ohio State may lose approximately $47 to $49 million in federal research funding due to grant cuts made by the National Institutes of Health.
All NIH grants allocate a portion of their funding to “indirect costs,” which are used to pay research staff and maintain research facilities. Previously, the NIH negotiated these indirect cost rates on an individual basis, usually granting a higher rate to a larger institution. However, on Feb. 7, The NIH Office of the Director announced these indirect cost rates would be capped at a standardized 15% across all grants.
As a result, many large research institutions like Ohio State — which has been operating with a negotiated indirect cost rate of 57.5%, according to the university’s webpage — are expected to face significant funding losses. On the other hand, smaller institutions with lower negotiated rates stand to gain additional funding.
The university is unable to confirm the exact amount of funding it will lose from the NIH, university spokesperson Ben Johnson said in an email. However, The Chronicle of Higher Education’s analysis of data from NIH Reporter — which “reflects estimated indirect and direct costs of individual grants,” according to The Chronicle’s website — found Ohio State could stand to lose roughly $49 million.
A separate analysis by researcher James Murphy — director of career pathways and postsecondary policy for Education Reform Now — found Ohio State may lose closer to $47 million.
Though Johnson could not verify either of these figures, he said indirect costs are necessary for funding essential research support staff, maintaining research facilities and ensuring compliance with federal research regulations.
“Facilities and Administrative costs provide crucial funding for Ohio State’s research infrastructure to support lifesaving research and innovation across a spectrum of diseases including cancer, heart disease, Alzheimer’s and Parkinson’s disease, and diabetes,” Johnson said.
Judge Angel Kelley of the U.S. District Court for the District of Massachusetts granted the American Association of Medical Colleges’s request for a temporary, nationwide restraining order against the funding cuts during its Feb. 10 hearing. Kelley has scheduled a follow-up hearing for Friday to further review the matter, according to Forbes.
Following the court’s intervention, efforts to sustain medical research funding at Ohio State are ongoing.
“Ohio State is working diligently with peer universities, legislative and industry leaders, and state and national associations to educate our partners on the importance of maintaining funding for critical medical research,” Johnson said.
Though these indirect costs may be imperative for Ohio State’s research, as well as for research efforts at other public universities nationwide, they can prove to be a challenge for the NIH at large. In its Feb. 7 statement, the NIH Office of the Director said this is because, unlike direct costs, indirect costs do not directly contribute to one precise objective — meaning they are difficult for the NIH to keep track of.
“Indirect costs are, by their very nature, ‘not readily assignable to the cost objectives specifically benefited’ and are therefore difficult for NIH to oversee,” according to the Office of the Director of the NIH’s statement.
The agency emphasized oversight is necessary “to ensure taxpayer dollars are used in ways that benefit the American people and improve their quality of life.”
“The United States should have the best medical research in the world,” the Office of the Director of the NIH stated. “It is accordingly vital to ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead.”
According to a Feb. 7 X post from the NIH, the cap on indirect cost rates “will save more than $4 billion a year effective immediately.”
Though the reduction will not be applied retroactively, the policy will be applied to all current grants’ “go forward expenses” starting Feb. 10, as well as for all new grants issued, according to the Office of the Director’s Feb. 7 statement.
The effects of the indirect cost rate reduction are currently being assessed by the university, Johnson said.
“The impact of the reduction in rates announced by NIH on [Feb. 7] is currently being reviewed by leadership,” Johnson said. “But lifesaving medical and health research and clinical trials continue in labs and clinics across our campus and medical center.”
In a Feb. 9 email sent to students, faculty and staff in Ohio State’s research community, the university said it plans to communicate with different colleges and departments about how the new rate may impact their specific research initiatives.
“The Enterprise for Research, Innovation and Knowledge (ERIK) and its Sponsored Programs team will work with the Office of Academic Affairs and Wexner Medical Center to share additional guidance with colleges and administrators,” the email states. “We understand that this may impact college financial planning, and the Office of Business and Finance along with the Office of Academic Affairs will work with individual units to plan accordingly.”
The Lantern contacted several university researchers in an effort to gain their perspectives but did not receive responses by the time of publication. One researcher declined to comment, citing concerns about potential university retaliation.
Across the nation, other universities and higher education associations have objected to the NIH notice.
In a Feb. 8 press release, Dr. David J. Skorton — CEO and president of the AAMC — and Dr. Elena Fuentes-Afflick — chief scientific officer of the AAMC — said medical research relies on the government’s support of facilities and administrative costs.
“Make no mistake,” Skorton and Fuentes-Afflick said in the release. “This announcement will mean less research. Lights in labs nationwide will literally go out. Researchers and staff will lose their jobs.”
Skorton and Fuentes-Afflick also said indirect cost rate reductions mean Americans will have to wait longer for medical cures, and the U.S. will likely cede scientific breakthroughs to foreign competitors.
“These are real consequences — slower scientific progress, longer waits for cures, fewer jobs,” Skorton and Fuentes-Afflick said. “We strongly urge the administration to rescind this harmful and counterproductive decision and allow researchers across the country to continue their work toward improving the health of the American people.”
The Association of Public and Land-Grant Universities echoed this sentiment in a Feb. 10 release, stating cuts to NIH funding would damage the U.S. economy, American science and innovation, patients’ well-being and the U.S.’ global leadership in medical research.
“It would be, quite simply, a self-inflicted wound,” the APLU stated in the release.
The APLU, the Association of American Universities, the American Council on Education — of which Ohio State is a member — and 13 other universities jointly filed a lawsuit challenging the new NIH policy, according to a statement from the APLU, AAU and ACE.
The AAMC, American Association of Colleges of Pharmacy and Association for Schools and Programs of Public Health — all of which Ohio State is a member — alongside the Conference of Boston Teaching Hospitals and Greater New York Hospital Association, said the notice from the NIH is “unlawful and would result in irreparable harm,” according to a statement from the AAMC.
