NIH's 15% Funding Cap Criticized as Harmful

The U.S. National Institutes of Health's recent decision to impose a 15% cap on facilities and administrative (F&A) cost reimbursements threatens to undermine the quality and sustainability of university research by slashing indirect funding by $4 billion. In a Policy Forum, Jeongwon Choi and colleagues argue that this policy is fundamentally flawed, as it disregards the essential role of indirect costs, such as infrastructure, utilities, and administrative support, in enabling scientific research. The current system, governed by rigorous federal oversight and audits, ensures that F&A reimbursements are fair and necessary, varying across institutions based on actual costs. NIH's argument that reducing F&A costs will redirect more funds to direct research is misleading, as indirect and direct costs are interdependent. Cutting F&A funding will ultimately weaken research capacity rather than enhance it. In response to several lawsuits disputing this decision, U.S. District Judge Angel Kelly issued a temporary restraining order on the policy. According to Choi et al., Judge Kelly's skepticism of NIH's justification underscores that this policy is not a cost-saving measure for efficiency but rather a funding reduction in disguise, with potentially detrimental consequences for the U.S. research ecosystem. Cutting F&A funding will ultimately weaken research capacity, stifle scientific competitiveness, and impose increased financial strain on institutions. "The scientific community, firms that depend on university research, members of Congress and their constituents, and Judge Kelly in particular, should consider these implications of the proposed plan," write the authors. "The consequences of failing to do so […] are simply too dire to ignore."