NIH Funding Reduction Could Have ‘Devastating Impact’

A recently announced move by the National Institutes of Health to reduce federal grant funding for indirect costs related to biomedical research threatens to put a stop to some programs and could have “a devastating impact,” according to the chief scientific officer for the Association of American Medical Colleges, which has sued to stop the cuts.

In a notification from the NIH’s Office of the Director on Friday, the agency stated it will implement an across the board flat rate of 15% for reimbursement of indirect costs connected to research. Previously, the rate was negotiated for each project.

In its statement, the NIH said the move, which was scheduled to go into effect on Monday, was to ensure more of its funding goes directly toward research. The NIH said that $9 billion of the $35 billion researchers received in funding for fiscal year 2023 went toward indirect costs. And, according to the agency, the average rate of overhead expenses reported by NIH was 27% to 28%, with some institutions reporting rates of more than 60% in indirect costs.

“The United States should have the best medical research in the world,” the NIH said in its announcement. “It is accordingly vital to ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead.”