The Wisconsin Technology Council released a statement on the National Institute of Health’s Feb. 7 cuts in payments for “indirect costs” for university research and development projects. Following are excerpts from that statement:
“The Feb. 7 decision to slash National Institutes of Health funding for so-called ‘indirect costs’ at universities, hospitals, and other institutions will cause immediate and likely lasting harm to biomedical research in Wisconsin and the United States.
“Indirect costs are broadly described as payments to help cover facilities, equipment, and personnel for thousands of projects. Effective immediately, a 15% indirect cost rate will apply to all new and existing NIH grants. Before this action, about 30% of an average NIH grant to an institution was earmarked for indirect costs but the rate was higher at some institutions such as the UW–Madison. This action should be opposed by Wisconsin’s members of Congress.
“From the standpoint of advancing medicine, such research has led to hundreds of breakthroughs. Here’s a specific Wisconsin story to illustrate the point.
“Sales of magnetic resonance imaging (MRI) machines made by GE Healthcare in Waukesha had flattened in the early 1990s, largely because use of such machines was confined to a few conditions. However, the university community worked alongside GE engineers to develop new software to expand the diagnostic use of MRIs. Examples of new indications were imaging of vascular systems; mapping local blood flow blockages (strokes); detecting tumors by becoming sensitive to cancer’s denser cell networks; imaging how head trauma and concussions upset how the brain coordinates itself; locating bile duct blockages; and mapping chronic liver diseases.
“All of this created the need for more MRI scanners. There are about 13,000 such machines in the United States today and perhaps 50,000 GE scanners worldwide; GE Healthcare can provide software upgrades to each. The continuous economic vitality GE has created in Waukesha over the past 40 years wouldn’t be possible without the federal investment in imaging science made over that period. Indirect cost allocations helped make it all happen.
“The NIH spent more than $35 billion in fiscal 2023 for nearly 50,000 competitive grants awarded to more than 300,000 researchers at 2,500 universities, medical schools, and other research institutions nationwide. Of that amount, about $26 billion went to direct costs for research, while $9 billion was allocated to overhead or ‘indirect costs.’ The change announced Feb. 7 means research institutions must quickly find billions of dollars from other sources to support laboratories, students, and staff — putting projects at risk.
“Here’s some perspective on what all federal R&D spending through universities means in relation to the larger federal budget:
“In fiscal year 2023, the federal government spent almost $60 billion on university R&D on topics ranging from defense to health to agriculture. That represented about 55% of total R&D spending at universities, meaning much of the rest was matched by private dollars. The total federal budget was about $6.2 trillion that year, meaning university R&D represented about 1% of total spending.
“A lot of money, yes; a poor investment, no, not given what it produces in terms of well-being, jobs, and economic growth. We urge members of Wisconsin’s congressional delegation to seek restoration of NIH indirect cost rates and to urge that similar restrictions are not enacted by agencies such as the NSF.”
