Public support of science is an investment in the future health, well-being, and security of our nation, in addition to being a driver of U.S. economic development and innovation. The new Supplemental Guidance from the administration of President Trump via the National Institutes of Health (NIH) aims to severely reduce the Indirect Cost Rate for research in our nation’s universities and research institutes. It has abruptly lowered the Indirect Cost Rate to 15%—a huge reduction in support of research. This will have a major negative impact on Cold Spring Harbor Laboratory (CSHL), but even more profound is the overall detrimental impact this Guidance will have on the entire infrastructure of bioscience, impeding future medical breakthroughs and slowing economic growth and affecting thousands of jobs in bioscience.
The impact to Cold Spring Harbor Laboratory and other academic scientific research institutions is unsustainable. CSHL is a 501(c)(3) nonprofit research and education institution that has shaped contemporary biomedical research and education with programs in cancer, neuroscience, plant biology, and quantitative biology for 134 years. Our researchers work on diseases from Alzheimer’s and autism to rare childhood cancers and cancers that impact millions worldwide. Discoveries at CSHL have resulted in the development of one of the most impactful treatments for breast cancer and a lifesaving treatment for spinal muscular atrophy (SMA), a neurodegenerative disease, which was the leading genetic cause of infant death. These are just a couple of the many incredible scientific advancements researchers are making here.
CSHL received roughly $21 million of NIH indirect cost reimbursement last year. Had the 15% Indirect Cost Rate been in effect it would have resulted in a loss of approximately $16 million of NIH funding toward our critical research infrastructure. To understand the true impact of the NIH Supplemental Guidance, it is important to identify the full scope of what is included in the NIH definition of indirect costs (also known as Facilities and Administration/F&A costs). This useful infographic (pdf), developed by a variety of bioscience associations, explains the breakout.
Direct and indirect costs are both necessary expenditures for conducting cutting-edge scientific research. Direct costs cover expenses such as researchers’ salaries and benefits and project-specific supplies and equipment. On the other hand, indirect costs, as defined by the NIH, support the true costs of research operations. While indirect costs cover a portion of general administrative expenses, such as human resources, finance, etc. (commonly referred to as business overhead), the vast majority of indirect costs are comprised of research operations costs, including expenditures on scientific computing resources, research journal access, grant reporting, medical and chemical waste management, maintenance of laboratories and special laboratory mechanical, electrical and plumbing systems, growing regulatory compliance with federal and state regulatory guidelines, and much more. Research requires an incredible amount of supplemental support that is simply not captured in direct research costs.
The U.S. has long been the leader in scientific research. If this NIH guidance stands, the country will see a loss of discovery, innovation, and competitiveness, and ultimately a loss of well-being in the nation’s health and economy. To preserve and strengthen the United States’ competitive research advantage, we should be looking for ways to provide more, not less, public support for scientific research.
—Bruce Stillman, Ph.D.
President & CEO