The Value of Academic Health Research

In the past month, the academic health research community in the US has been rocked by the new administration’s efforts to curtail health research expenditures. In the form of “Supplemental Guidance to the 2024 NIH Grants Policy Statement” (NOT-OD-25-068), the administration proposed reducing indirect costs (ICs)—the monies attached to any federally funded grant that serve to support infrastructure, including laboratory costs, space, and administrative costs. The newly proposed fixed IC rate of 15% represents a dramatic decrease compared to the existing IC rates agreed upon with most research-intensive schools that are at least 3 times that rate. The consequent cost to any given research-intensive schools of such a move would be more than $100 million a year, and the federal government would reduce its National Institutes of Health (NIH) costs by several billion dollars. This IC change would also apply to a range of other science research funders including the National Science Foundation. The federal government’s ostensible claim for the IC reductions is that it would reduce unnecessary administrative costs. Leaving aside the arguments on the necessity of ICs at their current—or higher—rates, which have been made elsewhere by others, this move by the federal government would amount, essentially, to a dramatic reduction in federal spending on health (and other) research in this country. Soon after NOT-OD-25-068 was issued, a federal judge issued an injunctive hold, and the case is currently making its way through the courts, with much uncertainty remaining.