S.D. clinical research staffer: Examining the direct costs of cutting NIH indirect payments that fuel medical research

With a swing of an ax, or perhaps more accurately stated a peck of the digital keyboard on X, government cuts continue to be doled out to various U.S. government departments and agencies.

It has now been a month since the National Institutes of Health (NIH) was directed to slash payments for “indirect” costs to research grant recipients. Indirect costs are generally referred to as the costs that are incidentally associated with conducting research, such as facilities, equipment, operations, maintenance, and administration. Indirect payments are now being capped at 15% of the “direct” payment, on the premise that anything more than this amounts to unnecessary administrative bloat.

With many organizations receiving indirect payments far above this 15% threshold, cuts to these potentially bloated payments appear to be sound on the surface. However, the issue with cuts to indirect payments is that the payments have been around long enough to become ingrained into the culture of NIH-funded research and thus have become incorporated into the budgeting of grant applicants and recipients. They are essentially a known “known.”

So, while direct and indirect payments are theoretically two different entities, they functionally act much closer to one. With this reality, while the intent of the budget cuts very well could be to slash funding that is not directly allocated to a research project, this is an impossibility since recipient organizations and institutions conducting NIH-funded research already consider these indirect payments into their overall research budget.

Thus, simply stated, the overall net effect of cutting “indirect” payments is a financial cut to research-related projects as a whole. 

Rational arguments can certainly be made that the NIH payment model needs to be reformed, that efficiencies in biomedical research need to be further identified and incentivized, or that quite simply the country has greater priorities that need to be addressed at the expense of biomedical advancements.

However, the abrupt nature of the cuts has been problematic and unnecessarily disruptive to the field of grant-funded research. Many ongoing projects have already been placed on hold and other approved projects are being aborted altogether. The NIH has a long history of being the worldwide leader in biomedical research and innovation in large part due to the substantial financial investments they have made through allocations of their resources.

Countless discoveries have been made through NIH-backed grants and the funding it has provided has been contributory to most new drug approvals. For now, a federal judge has placed the cuts on hold, with the legality of the budget cuts currently in doubt. 

While the courts utilize taxpayer money to sort through the legality of the cuts, many questions persist as to whether the slash-and-burn approach to government-funded research will be the method that holds, or if a more moderate approach to research reform is born from the chaos. If the cuts do persist, there will still be many questions that remain unanswered such as if the .06% (6/100th of 1%) savings to the federal budget made by the cuts will offset the positive economic activity that has historically been generated by the research-related activities and findings of the NIH grants.

Prior economic research has indicated that NIH-funded research has generated $2.46 in economic activity for every $1 spent. These are the unknown “unknowns” that would be nice to have better data on prior to making abrupt changes to NIH funding and would be prime targets for further scrutiny.

If the cuts do ultimately hold up in higher federal courts, there will need to be a transparent process in place to prioritize the remaining funds to research considered to be of high impact. While another study on the net benefit or harm of coffee consumption may novelly pique the public interest, this kind of research has little impact on public health compared to that being conducted towards combating cancer, bacterial resistance, or preparing for the next pandemic.

Transparency, efficiency and prioritization of research funds is a noble goal to pursue. However, the abrupt process in which DOGE-related cuts are taking place, absent of a clear plan on how remaining funds will be allocated, is undermining this vision. For now, these unprecedented cuts have had at a minimum short-term disruptive effects on biomedical advancements with the long-term effects remaining unknown. 

As a counterproposal, I would argue that there would be broad support to conduct further study on research funding policy in of itself, to further determine both the scientific and economic impacts of various differing funding policies on overall scientific and economic advancements within the biomedical field. Blanket allegations of fraud, waste and abuse without a publicly stated clear understanding of the ramifications of the cuts only adds to further politicization of how our government dollars are spent. 

Matt Gross was born and raised in Rapid City and continues to reside there. He attended Rapid City Central High School, graduating at the turn of the millennia. Following this he went on to earn a bachelor's of science in nursing in 2006 at SDSU followed by a master’s degree at Clarkson College in Omaha in 2017. He currently works right where he was born at Monument Health in Rapid City as a nurse practitioner in clinical research. 

Photo: biomedical research lab at the University of Pittsburgh, public domain, wikimedia commons