Cutting NIH Indirects is Sensible Medicine
Is 15% the right number? What other reforms should occur concurrently?
There is a societal obligation to use taxpayer money wisely. Some cite data suggesting that each dollar we spend at the NIH generates 2-3 dollars in return. Obviously, it is difficult, if not impossible, to estimate this accurately, and the cited study is not high quality science (it is also NIH funded, #noconflict), but let me say right off the bat: I have no doubt that investments in science generate massive return. And yet, I am also sure: there is colossal waste in the system.
If we eliminate waste, by the same contrived statistic, we might generate 5 to 10 dollars in return, and we owe it to the American people to do that. Cutting NIH indirects is a sensible place to start, as long as it occurs alongside other reforms.
Last week, the Trump administration stated it is cutting NIH indirects from currently negotiated rates to a flat 15%. A judge has stopped this action for now, but with some persistence, and perhaps running it through OMB, I suspect it can be accomplished.
Some academics have been up in arms. I was forwarded many internal emails from Deans and Presidents lamenting this change, including some from Johns Hopkins university. They say any cuts to indirects will be devastating for science. You can kiss cures goodbye, was the message.
Let me outline a set of facts I think we can all agree on.
For years, researchers have complained that NIH indirects mean the university is taking a large portion of money that could be used for their research and it is unclear what they are doing with it.
Some universities have ridiculous indirect rates. Scripps and Salk are ~90%. Pitt and NYU are 50-70%.
These sweetheart deals are negotiated without public transparency and accountability.
For some training grants, it is sizable. For example, consider a grant to fund a single student researcher. The student may receive 40,000 dollars in NIH funds for their meager salary, 35,000 dollars in NIH funds will be used to pay their fringe benefits (according to lord university), and another 45,000 dollars will go to the university as indirect funds. In other words, only a third of NIH dollars goes to the scientist. (40k/ 120k)
Some labs require bench space and central animal care (note: these can be budgeted as direct expenses, but sometimes count as indirects), but other labs are 100% virtual. They do computational work, and may take up, at most, 2 cubicles. Yet, all often have the same indirects in the current system.
I found it rich to see that Johns Hopkins President and Dean are complaining that we can’t afford budget cuts to indirects when their salaries are upwards of 4 million dollars combined. How do we justify such high executive compensation which is, in part, driven by taxpayer money?
Gates foundation, Chan Zuckerberg and many non-profits cap indirects at 10-15%. Universities never decline this money.
There is massive amounts of administrative red tape to submit NIH grants and to conduct research that help no one.
Researchers who commit abuse and harassment to their staff are often tolerated by universities if they bring lots of money in. NIH indirects have prevented important disciplinary action.
Tens of thousands of scientists leave the academy each year under the status quo and many are bitter.
Here is my approach to fix these issues.
NIH should cap indirects at 15%.
Lower indirects will mean higher pay-lines. Instead of giving out 100 grants, with the savings, we can give out 125 grants. Since the money is already appropriated to NIH.
Current NIH RO1 grants are 20 pages of science and 80 pages of fluff. Many academic centers have teams of staff to help prepare them. NIH should eliminate these paper requirements and universities should lay off these staff. NIH can eliminate people who read this paperwork. We don’t need to pay someone to dig a hole, and pay someone else to fill it back in.
Wet lab researchers should budget more of their costs as direct expenses.
Computational research might look more favorable given its lower costs. NIH mandated data sharing can further engender it.
Executive pay must fall.
Academic medical centers must eliminate all unnecessary administration.
IRBs need to be wiser. Less restrictions on retrospective research, and smarter policing of clinical trials, which are often unethical (bad controls/ bad crossover/ etc).
We should randomize investigators to an RO1 cap at 2 vs not and study the effects.
We should run a randomized trial of grant giving to learn if the costly, time-consuming method of study sections leads to the best outcomes.
We can have a debate about how fast change can take place, and whether 15% or 20% is the right number, but I favor acting fast.
Ironically, universities did this to themselves. The Trump administration has wisely seized a moment when confidence in the expert class is at rock bottom to enact reforms that are long overdue. The public will be open to these reforms because the public has lost trust in medicine. That loss of trust is due to the academy’s poor conduct over the last 5 years.
For instance, universities never had debates on school closure. Stanford famously censured Scott Atlas (serious disciplinary action) for saying the truth — that there is no data to support community masking of kids nor lockdowns. Universities set draconian visitor restrictions without data. Universities went all in on woke medicine, alienating much of the public on issues of diversity, mandatory DEI training, and gender medicine. Universities and the medical profession became increasingly political. Nature and NEJM endorsed Biden for president. CDC and AAP endorsed cloth masking 2 year olds. Universities pushed vaccine mandates that were unethical. The list goes on and on.
Because universities took strident positions and became the academic wing of the Democrat party, they increasingly forfeited trust. They were not balanced, and did not promote the timeless values of academic freedom, and informed skepticism. As such, more than half the country has lost confidence in them. And in this moment, reform is at last possible.
NIH indirects have needed to be reformed for years. Any honest observer would agree. We can argue about the number. I will give you 20%. And perhaps we can phase it in over a year.
There is plenty of time to analyze your program. But what is not negotiable is that the public is owed reform. The status quo is untenable.
As someone who went through the whole funding rat-race and opted to be a science educator rather than a bench scientist, I can testify to the hours and hours and evenings away from family and friends to prepare grants that had little to no chance of getting funded because what I worked on was not sexy enough or benefited the right social class enough. That world was not for me. The people who were successful had wrecked marriages and were strangers to their children. I could not, in good conscience, continue down that road. Writing the grant was bad enough. The paperwork that went with it was soul sucking and a waste of time.
I think most scientists, including R01 funded researchers, would agree with many of your critiques of the grants process. Particularly those doing less lab-intensive work, whose grants subsidize basic science and clinical trial infrastructure.
However, the administration's attempts to do this with no phase-in were anything but sensible. It was reckless. If it goes through, it will cause unnecessary chaos, job loss, and interruption. Chaos is not sensible.
Likewise, while I emphatically share the concerns about lack of transparency into the negotiated rates and what happens to the indirect funding after receipt, to claim it's all waste -- as many polemics have -- is disingenuous. It is in fact true that money pays for a lot of physical infrastructure and labor that is not line-itemed in each grant. And it is true that those facilities are required for research to continue. And it is true that in certain parts of the country providing those resources is more expensive.
The problem to me is that it's not at all clear that every dollar is required. We are asked to trust that the negotiation process is fair. I'm inclined to believe it mostly is. But the whole process is confusing to outsiders and often to insiders and now proves to be a massive liability. I think it's largely been an effective system, but even effective systems can be improved, and overall-effective systems can still produce perverse incentives that cause inefficiency, pain, and sometimes fraud.
15% seems to me a reasonable number, but only if time is allowed to reorganize the grant process. This can't be done in months or a year, but it could be done over the life cycle of current awards and perhaps faster.
To me, the obvious big picture answer is to make the indirects direct, but not on individual grants. We don't want scientists wasting time learning about refrigerator acquisition and maintenance costs, and we don't want a massive bureaucracy to arise where people figure out what share of the indirects they need to lobby for on their grant. There's a real risk in trading one bureaucratic mess for another.
Rather, universities and hospital systems should lay out their facilities and maintenance costs to support NIH-funded research in a direct and transparent way, and the federal government should be obliged to pay those costs. This should include every dollar needed to support active grants. Then you can save the 15% for discretionary spending to build capacity for future work. Moreover, non-NIH funded researchers at the institution will benefit from these facilities. 15% on billions of dollars of grants is still a lot of money for capacity building and should incentivize organizations to continue participating in the competitive process. But you can't do 15% without making sure the ability to truly keep up with facilities and maintenance is sustained. Making sure this goes smoothly is going to take good faith, transparent negotiations.
I am, to say the least, skeptical of the current administration's willingness to engage in this process in good faith. It is evident that many right-wing polemicists and culture warriors do not care about these details. They want to inflict pain on the universities, who they see as part of the cultural left to be destroyed, even if it means damaging valuable research along with DEI policies and cultural studies departments they despise. And similar critiques go to those in the universities who, under siege, refuse to look inward and blindly defend systems that do in fact need reform, and do in fact generate fraud and waste in a small but non-trivial amount of cases. (See the the Alzheimers debacle.) No part of this back and forth is sensible.