Exploring Disparities in Indirect Cost Rates Among Institutions

Professor Jeffrey Flier is a distinguished service professor and Higginson Professor of Physiology and Medicine at Harvard Medical School. He is the former dean of Harvard Medical School.

We talked about the recent (and sudden) change in NIH funding. First a note on Professor Flier. He is not a normal medical school dean. He is active online. He speaks candidly, often critically. He and Vinay wrote together in STAT news during the pandemic.

It was a great honor to talk with him for 47 minutes about the NIH news.

Here is the Tweet that went crazy viral Friday afternoon.

I had only a superficial understanding of grant funding. It turns out that every time a scientist earns an award, the institution receives extra funding known as indirect costs. The extra funds are given to support the infrastructure of the research center. Weirdly, as you will hear, some of the biggest research centers earn the highest percentages of indirect funds.

The controversy stems from the sudden and massive cut in these indirect costs.

It is an understatement to call the online reaction polarized. It was totally utterly hyper-polarized.

Here is Elon Musk.

Richard Ebright

There is absolutely no defensible basis for non-uniform indirect cost rates and absolutely no defensible basis for >=60% indirect costs. The previous system was a colossal fraud.

Micheal Eisen

It’s like saying you’re going to save money on a football team by cutting all the linemen.

Anil Makam

Whoa. Better accountability was needed where these expenses went, but this is draconian cut. Many institutions will struggle to support scientific infrastructure.

C. Michael Gibson

Woah…The government used to pay academic institutions 60% + on top of the costs of research grant to cover “Indirect costs.” That number just dropped to 15%. The viability of US academic medical centers & research is at risk.

And of course Vinay Prasad, who also wrote Ten Things to Know about the NIH change.

Good! This was the greatest slush fund ever created. It made researchers with NIH dollars invincible. Universities shielding them at all costs, even when research was fraudulent. This money was used to support initiatives, which Americans rejected, like DEI training & admin bloat.

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Here are some quotes I received via email from unnamed NIH funded researchers:

A lot of the indirects go to admins who are increasingly important for grant submission process because it is unnecessarily cumbersome. I've been on 3 NIH funded grants. All from the same team. Each one was sillier than the prior.

Another person—from the Southern US

I submitted an R01 a few months ago and it’s difficult to navigate everything alone without admin support. The process for grant submission could be improved a lot And there should be more focus on important questions and more clinical trials.

Another—from the Midwest

Unless I wanted to study goofy BS, I realized my chances were hopeless. So the only other option was to stay and truly advance in the academy was to align with industry.

And yet another from the Midwest

This overhead reduction is long overdue. Universities have been eating at the free buffet for a long time. They will, however, quickly figure out ways to take money away from researchers. I expect that lab space rent, personnel fees, and supply costs that the universities charge the investigators will become much higher in the coming year.

Lastly, the US government wants to keep the additional indirect costs, I get that. Universities will find ways to bridge the gap by taking more money from investigators. The initial pain will be at the administrator level, but early investigators will bear the brunt of this in the coming 1-2 years. It's not a great time to be in academic medicine, esp as an investigator reliant on grants.

Thank you for your support. Thank you Professor Flier. JMM

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