Indirect costs and the business of biomedical research funding
Indirect costs on research grants represent charges to cover the administration of grant funds; heating, cooling, water, gas, fume hoods and other centralized infrastructure; building and grounds security; facility maintenance and custodial services. Historically, these have been negotiated every two years between each institution and the NIH depending on the proportion of infrastructure devoted to NIH-funded research. My medical school, for example, had a negotiated IC rate of around 50%.
The NIH just announced a new policy whereby all NIH funded institutions will be held to an IC rate of 15%. This is far too little to support NIH-funded biomedical research at any medical school. Most universities cannot subsidize the NIH research mission on this scale. Talented researchers will leave in droves for industry or for other countries. If this decision is not overturned, it marks the end of an era in which the US was the premier nation for biomedical research.
NIH slashes indirect cost rates for biomedical research
The NIH just announced a new policy whereby all NIH funded institutions will be held to an IC rate of 15%. This is far too little to support NIH-funded biomedical research at any medical school. Most universities cannot subsidize the NIH research mission on this scale. Talented researchers will leave in droves for industry or for other countries. If this decision is not overturned, it marks the end of an era in which the US was the premier nation for biomedical research.
NIH slashes indirect cost rates for biomedical research
Joel:
It appears to me, they are attempting to assign a cost which never changes for dynamic research which always requires a change in infrastructure and variables. Of course, there would be changes in costs to meet a new dynamic (project) and there are also costs for the usage of equipment so as to have funding to replace old with new besides advanced technology. Someone thinks they know something to which they do not.
So I open this and see Cloudflare, which seems to work. But if I select “Reply” to Bill’s comment, Cloudfare disappears and no way to reply. Tried a few times and it repeats every time.
My intended reply to Bill was simply that with years of sales experience, it feels like a typical “demand” of a large customer: lower your prices. NIH wants bettter prices. They might not get them, but research “suppliers” will move in the intended direction.
@Eric,
You may have “sales experience” but you know nothing about biomedical research funding and costs. And it shows.
Research universities *already* subsidize research costs. Research is always and everywhere a cost center for the university (with the possible exception of some clinical trials). Huge cuts like this won’t generate “better prices,” they will shut down research at most universities that can’t afford the cost.
The comparison of NIH funding to foundation and society grants is specious. The latter represent a tiny fraction of the research portfolios of research universities, and many (though not all) universities will put up with the lower overhead because these grants typically function as seed grants for future NIH-funded projects.
All this will do is kill the goose that’s been laying the golden egg for decades. US biomedical research will decline, taking with it the discoveries that have been driving US Pharma research and a generation of US trainees. Many folks who will lose their jobs because of this will move overseas and our foreign competitors will get the patents and profits that used to come from NIH-funded research.
Read what wrote please and resist the temptation to add to it in your mind. I make no claims at all about whether what NIH says they want is a good idea. You are correct I don’t know, and I limit my comment to things I do know about. NIH wants a better deal. You feel that getting that better deal would be bad and you know way more than I do about this. Nonetheless, they want that better deal. Do you have any ideas about why they want that if the consequences of getting it are so negative?
@Eric,
Read what I wrote please, and resist the temptation to add to it in your mind. If you limited your comments to things you do know about, you wouldn’t be posting at all on this comment thread.
“Do you have any ideas about why they want that if the consequences of getting it are so negative?”
Yes, I do. They want it because the Trump Administration wants the savings to fund tax cuts for the wealthy and corporations. Shutting down federally funded biomedical research would be a “better deal” for that aim in the sense that burning down corn fields would be a “better deal” for farming expenses.
Hope that helps.
Having now read the NIH announcement, it seems exactly like a customer complaint about how come those other guys that buy less are getting a better deal? All these other guys are 10% to 15% and we are 28/29% and sometimes 50% and even 60%! Are you kidding us here? No more!
Eric, you miss some important points. First, the amount of research funded by those “other guys” is minimal compared to the volume funded by NIH, so the institutions can take the loss with only minor disruption.
Second, NIH funded research is done on a “cost reimbursement” basis at universities, with zero markup or profit. So, unlike the for-profit world where a business might elect to eat part of some cost like a tariff to mollify customers, any reduction of NIH funding results in an immediate loss to the university.
Greg:
Thank you for adding to the comments. I agree with the loss argument you make.
Sure, I see that, or rather, can easily believe it. But it doesn’t change that NIH wants a better deal. Pretty sure that the intent at some level is exactly to stress the research community and see what happens. And they’ll get a better deal, even if it settles somewhere above 15%, which seems likely. But the researchers used to 50% will be making some adjustments.