This post reflects my personal views but is informed by my professional experience as a biomedical researcher and administrative leader. Last Friday the National Institute of Health (NIH) announced a new cap on the indirect rates that can be applied to sponsored research. The announced cap was 15% while many biomedical research organizations (Universities, Hospitals, Cancer Centers) currently have agreements with the NIH for rates between 50-60%. The justification for this cut has been represented as “finding billions of dollars in waste”. While many others have addressed the severe impact this would have, I would like to provide some considerations for those who believe that the current level of indirects are “waste”. My hope is to provide insights into the realities of performing federally funded research that benefits our country, our communities and our families.
- First, I hope we can all agree that biomedical research fuels improvements in healthcare – cancer, mental health, heart disease, stroke, chronic conditions like diabetes, asthma, Alzheimer’s, Parkinson’s and so many others. I’ll conclude with a personal reflection on this.
- There is a lot of communication about “finding” billions of dollars of “waste” in indirect spending. I would like to offer some background about “direct” vs “indirect” costs. When researchers write an NIH grant proposal, they include direct costs to cover salaries and benefits for the people who will do the research, consumables (think chemicals), software licenses, reasonable travel to scientific conferences and other items in our “direct” expenses.
- Many factors that limit what we, as researchers, can include in our “direct” costs. First, most requests for proposals have a maximum total amount that can be provided in the award. Successful grant writers seek to maximize how much of the funding they can apply to doing their research. Second, there are specific limitations stated by the NIH about what categories of expenses can be included in direct costs. For allowed categories, there are often caps – for example, there is a maximum recoverable salary set by NIH and there are maximum per diem rates for travel based on the location. The last but equally important category – avoiding direct expenses that might not resonate well with expert peer reviewers.
- As a reviewer, if I see a proposal that seeks to use direct funds to cover administrative or compliance costs, I would flag that as a concern, expecting those costs to be covered by the indirect funding received by the grant recipient’s organization. I view it favorably when an applicant already has the equipment or other resources needed to do the work.
- Stringent financial accountability measures are applied after a grant is issued.
- Performing biomedical research requires a facility (think lab and offices) with water, power, and heat but facility expenses are not allowed as direct expenses in most federal awards. Expensive laboratory equipment that is used and shared by researchers is difficult to fund through direct costs. There is considerable EFFICIENCY in sharing complex equipment across research grants and that equipment is often purchased, in part, with pooled indirect funds.
- Research also requires administrative support for managing the complex financial reporting associated with conducting research. Protecting the safety of human subjects requires compliance professionals who are also supported, in part, by indirect funding. None of these resources or activities are “waste”. Reducing the indirect rate at all will reduce the ability to conduct lifesaving and life-improving research that is safe and effective.
- The messaging about the new indirect cap draws a false comparison between federal and foundation indirects. Most organizations receiving foundation support offset the lower indirect amounts (10-15% of directs) provided by those organizations with the higher indirect rates received from federal awards. I would be curious to know if the foundations cited in the NIH announcement would want their rates used to justify this measure.
- There is already a shortage of young professionals choosing to pursue a career in biomedical research. Likewise, there is a limited pool of administrative support to surround the people doing research with the guidance and assistance they need. Adding this level of uncertainty to funding and support for biomedical research will discourage top talent from pursuing a career doing work that helps our country remain competitive and contributes to improving health. Calling the work of both researchers and the administrative professionals supporting them “waste” does not help with this workforce shortage nor with the retention of current scientific experts. There is not an untapped pool of qualified researchers standing by to replace the current research workforce. Becoming proficient in research requires a drive to make a difference, years of training and more years of mentored on-the-job learning.
As somebody who works with federal funding, I know there are ample opportunities for improvement. And yes, there is some waste, but it is not rampant or widespread. Rather than across the board cuts, let’s identify and address specific inefficiencies. Let’s apply the technical know-how that is currently being used to hack federal systems toward updating legacy systems and automating some processes. Before making changes to the indirect rates, ensure that adjustments are made to allowable expenses in direct fees and raise the total award amounts.
My concluding reflection takes me to the pictures above. My late grandmother was diagnosed with breast cancer in the late 1980s. She experienced a brutal chemotherapy regimen. She was the first person who was close to me to die of cancer. Shortly after her death, I selected my Ph.D. project in no small part because it had a cancer-relevant aspect. Today, while breast cancer remains a high-risk condition, many more women are survivors, though treatment is still very difficult. This increase in survivorship is because of research. Likewise, my sister, young cousin and others survived leukemia through a combination of courage and the benefits of research. Others in my life experienced health conditions that they could not survive, including my late father and his brother (above), two aunts who died in their fifties of complications from myotonic muscular dystrophy, and too many young people; there is much yet to accomplish. Before attributing an important part of federal research funding to “waste”, please keep these people in mind.
