Administration Considers Capping NIH Indirect Costs

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Seeking to reduce federal government expenditures on the National Institutes of Health (NIH), President Donald Trump reportedly is considering imposing a 10% cap on the NIH’s indirect costs, money it gives grantees to support administration, equipment, IT, lighting, heating, electricity, and other overhead. An NIH source who was briefed on the budget request and spoke to The Atlantic on condition of anonymity said the change “is going to make every single university president across the country call their representative.”

White House officials told the magazine that a final decision had not been made on any cap and “it would be premature for us to comment, or anyone to report, on any aspect of this ever-changing, internal discussion before the publication of the [budget] document,” expected next week.

HHS secretary Tom Price has already been quoted as arguing that indirect costs represent “inefficiencies” and money that is going towards something other than research. Science reported that NIH spent $6.4 billion in indirect costs in Fiscal Year 2016, 38% of the $16.9 billion it spent directly on research. Had a 10% cap been in place, it would have been held to $1.7 billion, for a savings of $4.7 billion.

Critics say indirect costs incentivize institutions to spend unchecked amounts on administration and lavish purchases instead of research, The Atlantic says, while defenders say the costs are not optional and even the generous amounts received from the NIH aren’t enough to cover the cost of running a research lab.

An anonymous NIH source told the magazine that “instead of having an informed process where they get people together and talk about how to build efficiencies, they’re just backing into the numbers that the president put forward. They’re trying to pretend they’ll cut something without actually cutting science.”

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