The Trump administration’s order to limit National Institutes of Health payments to research institutes to help cover administrative costs could cost Oregon Health & Science University tens of millions of dollars in government funding.
The NIH said on Friday that it would immediately cap indirect funding received by institutions through research grants at 15%. Many universities and research institutions formerly received indirect funding at a rate above 50%, and these funds include building maintenance, supplies, support staff, and other administrative costs related to performing research.
In response to a lawsuit filed by Oregon and 21 other states, a court temporarily stopped the funding cuts Monday, giving the states and the public research institutes they represent more time to present their case.
However, OHSU, the biggest beneficiary of NIH funding in Oregon, would suffer a significant setback if the shift were permitted to go forward. According to federal records, OHSU received $277 million from the NIH in fiscal year 2024, with $73.6 million going toward indirect expenditures.
OHSU’s indirect cost reimbursement rate is 56%, according to an email sent to workers on Saturday by interim president Steven Stadum. Usually, each institution bargains with the government for a different reimbursement rate, which is a fixed percentage added to each grant payment. According to him, actual research expenses are already not covered by the university’s present agreed rate.
Stadum’s email was initially brought to light by Willamette Week.
According to Stadum, OHSU research results in life-saving treatments and technology and supports international efforts to enhance human health and wellbeing. We must take every precaution to safeguard research, which is a fundamental component of what makes us an academic health institution.
Oregon State University received $21 million, with $5 million in indirect money, and the University of Oregon won almost $40 million in NIH support, of which $10.4 million would be indirect monies subject to the new cap.
“A reduction of this magnitude should it take effect would be devastating to OHSU and other universities, hospitals, and research institutes across the U.S. engaged in scientific research,” Stadum wrote, despite the fact that there is grounds to suspect that this conduct is illegal.
On Monday, the funding cap was scheduled to go into force. However, a federal court temporarily delayed the rate drop when the attorneys general of Oregon and twenty-one other states filed a lawsuit against the Trump administration on Monday morning.
OHSU filed a declaration in support of the lawsuit on Monday, according to OHSU spokesman Sara Hottman.
One of the biggest funding sources for American colleges and research institutes is the NIH. In addition to the $9.25 billion spent on indirect costs, the government spent around $25 billion on direct research expenses last year.
The state lawsuit contended that a significant cutback in indirect financing would lead to laboratory closures, clinical trial suspensions, layoffs, and disruptions of ongoing research initiatives.
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The lawsuit claims that OHSU will lose $80 million, which may have an instant effect on the university’s capacity to pay for vital buildings, research compliance, and animal care. (How the lawsuit’s amount was calculated is unclear.)
The lawsuit also stated that it might have an immediate and direct effect on patient care and jeopardize OHSU’s capacity to conduct ongoing clinical trials.
Citing a portion of a 2018 appropriations statute that forbids changes to NIH’s indirect cost financing, the states’ lawsuit contended that the agency’s decision to restrict payments for overhead costs was illegal under federal law.
On Friday, the NIH referenced federal rules that were passed almost ten years ago and provide it the power to depart from agreed-upon indirect cost rates. The NIH said in the release that the adjustment will align its indirect cost rates with the benchmarks that private sector foundations employ.
According to the NIH, colleges are willing to take donations from private organizations because they offer far cheaper indirect expenses than the federal government. Grantees will be allowed to recover indirect costs at a fair and practical rate.
A federal judge blocked the NIH instruction with a temporary restraining order just hours after states filed their complaint. The hearing is set for February 21.
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