Nih Cuts Medical Research Budgets, With Billions At Stake

The National Institutes of Health today will begin implementing sweeping cuts to overhead funding for research grants. The cuts, announced Friday, will save taxpayers more than $4 billion, according to the NIH. Scientists have pushed back forcefully, saying that slashing the budget will halt progress on lifesaving medical innovations and imperil jobs, medical research institutions, and regional economies that depend on NIH funding.

The NIH is an economic force

It’s the leading funder of biomedical research in the world and supports 412,000 jobs, according to United for Medical Research, a biomedical research advocacy organization.

Overhead costs at the center of budget cuts: When the NIH awards a grant to a scientist, an additional percentage of that award is provided to the scientist’s institution to pay for infrastructure that supports the research—lab equipment, utilities, hazardous waste disposal, and more. Of the $35 billion awarded to grants in FY 2023, $9 billion (26%) went to “indirect costs,” per the NIH.

That will now be capped at 15%: Under the new Trump administration, the NIH announced that it would cap its funding of indirect costs to 15%, pointing to high indirect rates of 69%, 67.5%, and 63.7%, which have been awarded to ultrawealthy institutions Harvard, Yale, and Johns Hopkins, respectively. The NIH said it was targeting wasteful spending: It is “vital to ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead.”

Scientists denounced the cuts

They responded that overhead costs such as cutting-edge microscopes and HVAC are vital to research, and a 15% cap would threaten the development of treatments for diseases like cancer, the top category for NIH funding.

It could also ripple across the economy. For every $1 of research funding, the NIH generated $2.46 in economic activity, according to United for Medical Research. And the cuts would disproportionately impact cities and regions that are hubs for biomedical research, like Birmingham, AL, and the Research Triangle in NC. Pittsburgh, for instance, has built a thriving “meds and eds”-based economy in Western PA. Under the new policy, the University of Pittsburgh would receive $183 million less in government research funding, a 25% reduction.

Looking ahead…university lawyers nationwide are likely prepping a legal challenge.—NF