By Aliasger K. Salem
Biomedical research in the U.S. is world-class in part because of a long-standing partnership between universities and the federal government.
On Feb. 7, 2025, the U.S. National Institutes of Health issued a policy that could weaken the position of the United States as a global leader in scientific innovation by slashing funds to the infrastructure that allows universities and other institutions to conduct research in the first place.
Universities across the nation carry out research on behalf of the federal government. Central to this partnership is federal grant funding, which is awarded through a rigorous review process. These grants are the lifeblood of biomedical research in the U.S.
When you think of the costs of scientific research, you might picture the people who conduct the research, and the materials and lab equipment they use. But these don’t encompass all the essential components of research. Every scientific and medical breakthrough also depends on laboratory facilities; heating, air conditioning, ventilation and electricity; and personnel to ensure research is conducted securely and in accordance with federal regulations.
These critical indirect costs of research are both substantial and unavoidable, not least because it can be very expensive to build, maintain and equip space to conduct research at the frontiers of knowledge. The NIH stated that it spent more than US$35 billion on grants in the 2023 fiscal year, which went to more than 300,000 researchers at more than 2,500 universities, medical schools and other kinds of research institutions across the nation. Approximately $9 billion of this funding was allocated to indirect costs.
NIH grants have supported the direct costs of my own scientific research on developing treatments for conditions ranging from cancer to eye diseases. I would be unable to carry out my research without the support of the indirect costs the NIH plans to cut.
What are indirect costs?
Indirect costs, also known as facilities and administration costs, or overhead, are funds provided to institutions to cover expenses that are not directly tied to specific research projects but are essential for their execution. Unlike direct costs, which cover salaries, supplies and experiments, indirect costs support the overall research environment, ensuring that scientists have the necessary resources to conduct their work effectively.
Indirect costs include maintaining optimal laboratory spaces, specialized facilities providing services like imaging and gene analysis, high-speed computing, research security, patient and personnel safety, hazardous waste disposal, utilities, equipment maintenance, administrative support, regulatory compliance, information technology services, and maintenance staff to clean and supply labs and facilities.
Research institutions that receive federal grants must comply with the rules and regulations established by the U.S. Office of Management and Budget. These guidelines dictate the indirect cost rates of each institution.
Institutions submit proposals to federal agencies that outline the costs associated with maintaining research infrastructure. The cost allocation division of the Department of Health and Human Services reviews these proposals to ensure compliance with federal policies.
Indirect rates can range from 15% to 70%, with the specific level depending on the research and infrastructure needs of an institution.
Typically, institutions undergo an exacting process to renegotiate their indirect rates every four years, factoring in components such as general, departmental and program administration, building and equipment depreciation, interest, operations and maintenance, and library expenses. Universities need to carefully justify these cost components to ensure the sustainability of research infrastructure and compliance with federal requirements.
Notably, indirect costs from grants do not cover the full cost of carrying out research at universities. In 2023, colleges and universities contributed approximately $27 billion of their own funding, such as money from their endowments, to support research. This included $6.8 billion in indirect costs that the federal government did not reimburse.
Slashing vital research funding
In its February announcement, the National Institutes of Health declared that it would no longer determine indirect costs rates based on the needs of each institution. Instead, it would issue a standard indirect cost rate of 15% across all grants. The rationale given by the agency for the cap is to “ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead.”
It notably comes after the Trump administration and Elon Musk have sought to slash federal spending, with Musk criticizing indirect cost rates as “a ripoff.”
A standard 15% rate would significantly affect an institution’s ability to maintain its research infrastructure. For example, if a university had a 50% indirect cost rate in 2024, it would receive $150,000 for a $100,000 grant, with $50,000 allocated to indirect costs. With the new NIH cap, this would drop to $115,000, with only $15,000 for indirect costs.
The scale of this cut in research support becomes apparent at the state level, with harms to both red and blue states. For example, Texas institutions would face a reduction of over $310 million, and institutions in Iowa a reduction of nearly $37 million. California would lose more than $800 million, and Washington over $178 million.
David Ryder/Stringer via Getty Images News
The NIH compared the new 15% cap to the indirect cost rates that foundations typically set for institutions of higher education. It pointed to the 10% rate granted by the Bill & Melinda Gates Foundation and Smith Richardson Foundation, the 12% rate of the Gordon and Betty Moore Foundation and Robert Wood Johnson Foundation, and the 15% rate of the Carnegie Corporation of New York, Chan Zuckerberg Initiative, John Templeton Foundation, Packard Foundation, and Rockefeller Foundation.
However, many researchers and funders have criticized this claim as misleading. A spokesperson for the Gates Foundation has previously stated that the listed rate does not reflect how the organization allocates its funds. Universities have pointed out that they often accept foundation grants with low or zero overhead rates because these grants constitute a relatively small portion of their funding and are often spent on early-stage faculty whose careers need additional support.
In addition, it is only because NIH grants cover a significant portion of their overhead costs that research institutions are able to accept foundation grants with such low indirect rates.
Biomedical researchers respond
Scientists and researchers responded to the NIH announcement with deep concern about the negative effects these funding cuts would have on biomedical research in the United States.
The Council on Governmental Relations, which monitors federal policy for major universities and medical research centers, stated that “America’s competitors will relish this self-inflicted wound,” urging the NIH to “rescind this dangerous policy before its harms are felt by Americans.”
The president and CEO of the Association of American Medical Colleges stated that the NIH policy would “diminish the nation’s research capacity, slowing scientific progress and depriving patients, families, and communities across the country of new treatments, diagnostics and preventative interventions.”
Research institutions, scientific societies, advocacy groups and lawmakers from both major political parties have pushed back against the 15% cap on indirect costs, urging NIH leadership to reconsider its policy.
Soon after the attorneys general of 22 states filed lawsuits challenging the policy, a federal judge issued a temporary pause in those states until lifted by the court.
Scientists expect the long-term effects of these funding cuts to significantly damage U.S. biomedical research. As the debate over federal support to academic research institutions unfolds, how institutions adapt and whether the NIH reconsiders its approach will determine the future of scientific research in the United States.
Aliasger K. Salem is Bighley Chair and Professor of Pharmaceutical Sciences at the University of Iowa.
Matt says
Sacrificing our future is the price we have to pay in order to get the out of control debt/budget back in line. Keep that in mind the next time Democrats , want to spend your hard earned tax money on some wasteful idea.
Let’s not forget how Fauci gave billions of your tax dollars to china funding the Wuhan lab to release covid on the world, If you don’t learn from history it’s bound to repeat itself.
Jake from state farm says
As does giving money to other countries for useless projects or those who enter out country illegally. The real problem here that the media will not discuss is a useless congress (both sides), allocating billions and billions of our money to non elected bureaucrats to spend on useless projects. It is done without any oversight from those allocating the funds. They pass a bill with a great sounding name and then walk away.
Sherry says
For the uneducated: Economics 101. . .”The two main elements of the budget are receipts and expenditures.”
For governments the “Receipts” are essentially “taxes that are paid”. Understand?
Therefore, “ALL” citizens must not only have their income shown on a “Tax Table”, they MUST PAY “ALL” the taxes they owe. Are you following me? Those that are wealthy enough to hire highly specialized accountants to help them find the “loopholes” in the tax codes often DO NOT pay their “fair share” of taxes. For example:
Federal tax returns of some of America’s wealthiest people reported on by ProPublica June 8, 2021,
reveal that they pay no federal income taxes some years and often pay lower tax rates on their
investment income, including asset-value growth, than workers pay on their wages.
Overall:
● Some years billionaires pay no federal income taxes: Jeff Bezos paid zero in 2007 and 2011, Elon
Musk paid zero in 2018, Michael Bloomberg paid zero several times in “recent years”, and
George Soros paid zero three years in a row.
● The 25 top billionaires covered in ProPublica’s analysis saw their wealth rise by $401 billion from
2014 to 2018, yet they paid a federal income tax rate of just 3.4%. That’s far less than what most
middle-class workers like teachers, nurses and firefighters pay.
● ProPublica bases that tax rate on how much each billionaire paid in federal income taxes during
that period compared with how much their wealth grew. Because the wealthy make most of
their money from the rise in the value of their assets, ProPublica calls the share of that increase
paid in taxes the rich person’s “true tax rate”.
● In 2018, these 25 billionaires reported a combined $158 million to the IRS in wages, a mere 1.1%
of their total reported incomes for that year.
Therefore, lowering the “Receipts” will NEVER allow our government to balance the budget.
Sherry says
Instead of Wrecking Our Government by Cruelly Firing People Without Cause and Posing with a Chainsaw. . . elon musk should be “Paying His Fair Share of Taxes”:
ELON MUSK
Topline facts:
● Wealth growth, 2014-2018: $13.9 billion
● Total income reported for tax purposes: $1.52 billion (10.94% of his wealth growth)
● Total taxes paid: $455 million
● True tax rate: 3.27%
Additional information:
● Billionaire Musk paid zero federal income taxes in 2018.
● One reason for the big mismatch between Musk’s reported income and wealth growth is that he
makes sure the company he runs, Tesla, does not pay a dividend to shareholders. Such dividends
are taxed annually. Instead, Tesla shareholders–prominently including Musk–make their money
through the increase in the stock’s value, which under current tax law may never be taxed.
Edith Campins says
I had to laugh at the two coments above. They seem to forget it was trump who took our national debt to unprecedents levels. They must also have missed the recent articles on trump’s proposed budget, let me summarize for them, tax cuts for the rich, huge increase of national debt, cuts to all the social programs that benefit Americans to pay for it.
Tired of it says
Must have missed this: Republicans Reveal Trump Tax Plan Will Cost US $4.5 Trillion.
Ed P says
Is it actually biomedical or is it really bio pharmaceutical?
Big Pharma dominates.
Why would FDA subtlety shift toward the importance of drugs and obesity?
BillC says
From “Billionaire, Nerd, Savior, King”:
“Another of our most abiding myths, which feeds into the broader American narrative of the self-made individual, is that the founders of tech companies willed their creations into being simply with their brains and sweat… Silicon Valley’s early success was largely subsidized by Federal research funds that went to Stanford University that nurtured technologies, including [DARPA]” which everyone knows is now the internet.
As for Fauci, his advice was frequently contradicted by Trump (remember injecting bleach?), and Trump’s supporters alleged that Fauci was trying to politically undermine Trump’s run for reelection. For an informed discussion on the origins of Covid 19 see New England Journal of Medicine https://www.nejm.org/doi/full/10.1056/NEJMp2305081
The dude says
Yes yes… and how anyone possibly forget the balanced budget left to W… who started a wars of choice and ran the credit cards up faster than drunken floriduh frat boys running daddy’s credit cards up on spring break…
Then of course the orange shit stain in the oval office who himself ran the debt up by TRILLIONS and by the end his first term, we couldn’t even buy toilet paper or paper towels while he was sending out checks (paid for with borrowed money) to everybody.
But do go on blaming it all on dems… it makes total sense.
The dude says
No worries… all those useless projects will be shut down and those billions and billions will be handed to the companies of the man shutting all the projects down.
We can start with $400mil on “Armored Teslas”… clearly the current admin does not intend to be fighting a war anywhere where temps drop below freezing, and that doesn’t have a good power grid…
Ray W, says
I had to wait a few days to digest the astoundingly naive’ and misleading comment posted by Matt.
In the interim, I looked for information about his claim that Dr. Fauci had funneled billions of dollars to the Wuhan lab to unleash Sars-Cov-2 on the world.
I found a BBC article dating from August 2, 2021, about a Senate hearing that featured Senator Rand Paul displaying his own profound ignorance of different kinds of viral research methodology.
According to the BBC article, there once were two different types of virology research efforts funded by the National Institute of Allergy and Infectious Diseases (NIAID), the agency headed at that time by Dr. Fauci. Dr. Fauci headed neither the National Institute of Health nor the Center for Disease Control.
Reporters found that in 2014, the Fauci-led NIAID had indeed funded a grant to the US-based EcoHealth Alliance in the sum of $3.7 million over a five-year term for one of the two different types of virology research.
Of that sum, EcoHealth provided $600,000 to the Wuhan Lab. The purpose of the funds was to investigate the possible existence of coronaviruses in bats.
The five-year funding plan was renewed in the 2019 Trump budget, but it was canceled in 2020.
Some context is required here. Prior to 2014, SARS-Covid1 had erupted in China. No one had seen a virus quite like this one. The outbreak was quelled without it spreading beyond the Wuhan region; it has never been seen in humans since that time.
International studies of the virus began in 2014, with the U.S. funding but a portion of the research.
But researching the issue of whether bats can harbor a particular virus in the wild is different from attempting to manipulate the genetic code of a virus. This is the second type of virology research.
The harboring virus type of research examined “at the molecular level” the newly found bat virus and its spike proteins, but it did not affect “the environment or development or physiological state of the organism.”
In other words, the international effort studied the makeup of the virus at the molecular level, but it did not manipulate it.
The second type of viral research involves genetic code modification, which is called “gain of function” virology research. At one time, the U.S. funded this type of viral research.
In nature, “gain of function” can occur when an organism, perhaps in response to changing environmental factors, mutates its genetic code and acquires new abilities.
In the lab, “gain of function” can occur when an organism’s genetic code is manipulated by researchers.
In 2014, the US government halted the funding of all forms of “gain of function” research due to biosafety concerns. None of the EcoHealth money mentioned above was spent on this type of research at the Wuhan Lab.
Research teams affiliated with the Wuhan Lab and UNC-Chapel Hill did produce a research paper in 2015 focusing on the molecular study of viruses prior to and therefore different from the emergence of the novel Sars-Cov-2 virus, but the study did not involve “gain of function” genetic manipulation.
Another similar study was published in 2017. It, too, did not involve “gain of function” research.
Make of this what you will.
Me?
First, there exists a vast gulf between Matt’s claim of billions of dollars or the claim of less than a million dollars given to the Wuhan Lab. Matt chose billions. I don’t know why he chose to do this. Much more credible sources say the true amount was less than a million dollars.
This gross overestimation of funding suggests that Matt is innumerate, meaning he doesn’t understand numbers. I don’t mean innumerate in the meaning of concrete mathematical computations such as 5 times 5. I mean innumerate in the meaning of being unable to comprehend the enormity of billions of dollars and what it truly represents.
Don’t get me wrong. I cannot comprehend the enormity of a total federal debt of $37 trillion, nor can I comprehend Trump running up the federal debt by $8 trillion in his first term, nor can I comprehend Biden running up the federal debt by $8 trillion more in his term, nor can I comprehend the fact that one of the first actions by the new Republican-controlled House was to raise the debt ceiling by another $4.5 trillion, as if we are getting ready to add that much more debt and they don’t want it to be a part of the political discussion during the 2026 federal House campaigns. The sums are so vast that they lose any concrete character and take on an abstract meaning.
Second, research focused on determining whether a virus can exist in wild bats, as opposed to funding virology efforts to manipulate Covid genetics. Matt chooses manipulation of the genetic code of Covid viruses. Much more credible sources say study of wild bat viruses at the molecular level.
Over and over, Matt presents as a commenter who doesn’t know what he is talking about, but he types with such certainty.
Can it validly be argued that he doesn’t know what he is talking about because he doesn’t care to know? If this is so, is it possible that the more damning the disinformation, the more Matt likes it, factual truth be damned. Matt, for all intents and purposes, really does present as a disinformation launderer, as opposed to a zealous advocate for the truth.
About the only thing that a reasoning person can agree with in Matt’s comment is that if one doesn’t learn from history, it may repeat itself.
FlaglerLive readers should know by now that the easily fooled, i.e., gullible, Matt does not appear capable of looking up things before he comments on them.
History does tell us that if one puts garbage into a comment out of ignorance, he or she very likely will get garbage out of it.
Jake from state farm says
Ahhh that Tesla contract that was brought up during the previous dementia ridden administration. What ceases to amaze me is when people from the left won’t acknowledge the waste that both the left and right in congress approve, hand off to bureaucrats without any oversight. Do you even care about the waste or is your hate for the other side make you ignore it.
Joe D says
Reply to Matt:
What alternative universe are you living in where Dr Fauci gave ANY US research Money to the Wuhan lab!?!
Oh that’s right you don’t HAVE to back up your statements with ACTUAL FACTS (but I would like to see you TRY from LEGITIMATE NEWS SOURCES…Not conspiracy theory blogs).
As a Masters prepared Clinical Nurse Specialist and Certified Nurse Case Manager at an internationally recognized East Coast, University teaching hospital for 21 years. Our Hospital was one of the GROUND CENTRAL referral centers to whom outside hospitals sent their seriously ill Covid patients. I covered one of the 6 dedicated 22 bed ICU Covid units. I watched as I lost 1 patient every other day to Covid complications
I do have to APPLAUD Donald Trump for one thing…Operation Warp Speed. Researchers essentially PAUSED other research to focus on discovering a vaccine to combat Covid!
One thing we learned just in treating ICU vented Covid patients, in the early days, was it was not so much the VIRUS that was killing people as much as it was the BODY’S overwhelming IMMUNE response to the virus, that was resulting in the body shutting down. It triggered the body’s lungs to produce more congestion mucus, it gradually caused the kidneys to shut down…etc. so after a few months, we tried to SHUT OFF (“suppress”) the body’s over immune reaction to the virus, by using steroids. It worked, but you also had to be aware of dosing, and other medical conditions, since steroids have their own risk of side effects.
By that time the vaccines were coming online, and immunization programs slowed the spread of the virus, but STILL a million people died of the virus..many who listened to internet MISINFORMATION about vaccination dangers, and refused vaccination…and sadly spread or succumbed to the virus.
So how much or how many lives are you willing to RISK, by cutting back research funding to save money (currently CLOSELY REVIEWED FOR WASTE ALREADY through Federal site audits)?!?
Especially since these cost cutting measures are designed to pay for the tax cuts to the upper 1-3% of incomes (millionaires and billionaires, along with million dollar corporations)!
I PRAY on a daily basis that the current bird flu that is GRADUALLY MUTATING TO BE TRANSMITTED to other livestock/farm workers/veterinary workers…but not transmitted from human to human…. Yet (!!!)…doesn’t get ahead of current research (which by the way “accidentally” got cut when “President” MUSK (sarcasm INTENDED) fired the group of researchers who were working on bird flu prevention and vaccine development (first for flocks of birds to prevent the rapid spread of the disease resulting in millions of birds needing destruction …but possibly a vaccine for people). Musk fired people (again) with little to no KNOWLEDGE of what they actually DID!?!….OPPS!
Joe D says
Reply to Jake….
NO, the Biden administration DID NOT budget for “Armored Tesla Trucks.”
What the Biden admin DID budget for was about (sorry I don’t have the EXACT AMOUNT ) $85 million for ELECTRIC EV federal vehicles and approximately another $22 million to expand EV charging stations.
Then Trump…along with “President” Musk (again, SARCASM INTENDED), had the contract changed from Federal EV vehicles to TESLA ARMORED VEHICLES, and increased the budget exponentially to something like…I’m sure SOMEONE has the exact budget ($450 million)…so Jake, your information (as happens frequently),was about 25% correct.
Joe D says
Reply for Ed…
If you’ve paid attention to health advances in the last 10 years…OBESITY is going to become one of the US’s fastest growing diseases. Those who are OBESE…with a body mass index (BMI) over 25 are much more likely to develop Diabetes, Heart Disease. Degenerative joint disease (arthritis. ETC), and kidney disease.
The success of these new injections of glucose control medications, are contributing to a SIGNIFICANT EFFECT on weight loss…although the developing companies ( legal by law) are charging an almost IMMORAL price for these new medications (that’s a separate issue).
Recently, it’s been found that the use of some (not all ) of these new glucose control injectables, reduces the risk of certain heart diseases (independent of weight loss benefit).
The long term CLINICAL effectiveness of these new medications is still being studied, but you do have a point, that some of the original funding for these medications were paid for by Federal research grants…but the profit granted to these pharmaceutical companies is something that might need to be addressed… however many drug companies say that only a small portion of new meds make it from the lab to actual FDA approval, so the “OUT OF THIS WORLD PRICING” is to compensate for the 3 drugs that never met approval standards.
There has to be a REASONABLE BALANCE.
Ed P says
Wait till the law suits follow as peoples’ pancreas shut down during injections or slow down after coming off these diabetic treatments used for wait loss.
In our quest for easy solutions to obesity, are we causing long term health risks of another nature?
Joe D says
In Response to Ed P…
GOOD LORD…where are you getting “PANCREAS shut downs?”
There are clearly listed side effects of using these weight loss/diabetes injectable medications. One of the prominent side effects is gastrointestinal (digestion slow downs)…but I would like you to share where this information about Pancreatic shut down/slow down is coming from. Hopefully a credible Medical Resource, and not UNSUPPORTED theories from some Social Media post!?!
ALL MEDICATIONS have some side effects. I personally have had to have my MD cut med doses or change to alternative medications due to side effects I wasn’t willing to put up with. That’s why these medications should be prescribed under a medical team that KNOWS YOUR CARE…and not randomly off the internet.
But I DO agree with your comments about Pharmaceutical Companies price gouging on new meds…after large portions of their research have been funded by Federal Government grants.
Ed P says
Joe D ,
So a GLP-1 receptor agonist that mimics the hormone and stimulates the pancreas (stimulating insulin production) should be the new go to to loose weight.
Pop another pill, inject another drug instead of exercising , and eat healthy. That the message America hears, they don’t listen and are into easy instant gratification.
66% of all adults in US use prescription drugs. Should we be adding more?
I get it, some prescriptions are necessary and life sustaining. Common sense is needed.