Science in the Service of Health
Protecting the Future of Biomedical Research
The NIH’s proposed cap on indirect costs threatens the foundation of scientific progress, putting research institutions, scientists, and public health at risk.
Below, explore key perspectives on this issue, including letters from David A. Brenner, MD, President and CEO of Sanford Burnham Prebys, infographics explaining direct vs. indirect costs, funding statistics that highlight the impact of biomedical research and a list of government representatives engaged in this critical fight. Together, we must advocate for sustainable funding to ensure continued innovation and discovery.

Letters
Letters from David A. Brenner, MD, President and CEO of Sanford Burnham Prebys
Shot Sighted: NIH Backs Away from mRNA Vaccine Technology
A letter from David A. Brenner, MD, President and CEO of Sanford Burnham Prebys
In a 2020 speech at the height of the pandemic, President Trump celebrated his administration’s Operation Warp Speed for its rapid development and deployment of COVID-19 vaccines. He called it “an incredible success.” And rightly so.
The two most widely deployed COVID vaccines came from the biopharmaceutical companies Moderna and Pfizer. They were administered billions of times worldwide during and after the pandemic. It is estimated these vaccines (with a handful of others) prevented at least 14.4 million deaths worldwide, including more than 3 million in the United States alone.
Three years later, the two scientists whose groundbreaking work led to the COVID-19 vaccines, would win the 2023 Nobel Prize in Physiology or Medicine.
What made the Moderna and Pfizer vaccines particularly notable was how quickly they were created—just 10 months from when the virus got its official name. The speed of development was due to the technology used, which is based on messenger RNA (mRNA), a single-strand molecule that instructs cells how to build specific proteins.
In the case of COVID-19 vaccines, the mRNA contains the blueprint to create the characteristic protein spikes on the virus’ surface which then primes the body’s immune system to respond quickly and effectively when exposed to the actual virus.
Traditional vaccines use bits of weakened, inactive or synthetic virus, which requires growing massive amounts of cultured live virus or cells, an extremely time-consuming and costly endeavor. In contrast, once a vaccine target mRNA is designed and synthesized, it can be quickly mass-produced.

Now, in its latest inexplicable and counter-productive order, the National Institutes of Health is reportedly urging scientists to remove all references to mRNA vaccine technology from their grant applications. It has already terminated at least one grant. It has offered no explanation.
The move, say observers, may signal the agency’s abandonment of mRNA technology, which has huge therapeutic potential, not just for treating or preventing infectious diseases, but also immunological and cardiovascular conditions, tissue damage and cancer. Some cancer mRNA vaccines are already in clinical trials.
The NIH’s apparent opposition to mRNA research is not surprising. It is a continuation of a series of actions based on misinformation, lack of knowledge or, in this case, a particular antipathy for vaccines, which conspiracy theorists claim without any scientific evidence are dangerous and health threatening.
Robert F. Kennedy, Jr., the Health and Human Services Secretary in the second Trump administration, has a long history of making false and misleading claims about vaccines and COVID-19. In 2021, he unsuccessfully petitioned government regulators to rescind approval of mRNA COVID-19 vaccines, falsely declaring them to be “the deadliest vaccine ever made,” based on unverified claims of side effects.
Kennedy has long opposed vaccines of all sorts. He has wrongly alleged that the childhood vaccine for measles, mumps and rubella (MMR) is linked to autism and other neurological disorders. That specious allegation was rebutted by hard science long ago.
Under Kennedy’s watch, the NIH has terminated at least 33 research grants for projects to better understand why some people are hesitant to receive vaccines or to evaluate strategies that encourage key vaccinations.
“It is the policy of NIH not to prioritize research activities that focuses [sic] gaining scientific knowledge on why individuals are hesitant to be vaccinated and/or explore ways to improve vaccine interest and commitment,” the termination letters said.
As a result, less critical science is being done, less knowledge is being learned and more health catastrophes are the offing.
Measles is an example. It is a highly contagious disease that was officially declared eliminated in the U.S., thanks in large part to the MMR vaccine, which was introduced in 1971. With larger numbers of Americans deciding to forego MMR vaccinations of their children, herd immunity has declined and the disease has returned.
An outbreak in Texas is growing with no end in sight. It has already killed an unvaccinated 6-year-old child in Gaines County, Texas, the center of the outbreak. It is also the suspected cause of death of an unvaccinated adult in New Mexico.

A measles outbreak, to quote an infectious disease epidemiologist, is “like a forest fire throwing out sparks.” The outbreak will burn past state lines.
The Centers for Disease Control is keeping tabs, but federal health authorities have been mostly silent on the measles outbreak. Kennedy has promoted alternative treatments, such as steroids, antibiotics and cod liver oil.
None are known to be effective against measles, but cod liver oil has been proven effective as an antidepressant. That might be needed.
Sincerely,David A. Brenner, MD
President and Chief Executive Officer
Donald Bren Chief Executive Chair
Science Starts Here: Research Institutions and Academia
A letter from David A. Brenner, MD, President and CEO of Sanford Burnham Prebys
The biotechnology market in the United States is gargantuan, exceeding $553 billion in 2023 and projected to grow to almost $1.8 trillion by 2033. The current U.S. pharmaceutical market is even bigger at $639 billion last year, projected to reach more than $1 trillion by 2030.
Both are global leaders in size and output. In a study published a few years ago, researchers found that of 252 new drugs approved by the U.S. Food and Drug Administration (FDA) between 1998-2007, 118 originated in the U.S. Japan, the United Kingdom and Germany were next, but all in the low 20s.
More than half of new drugs are first launched in the United States each year. The FDA approved 50 new therapeutic compounds in 2024. It may not sound like a lot, but no other country comes close.
It takes a lot of time and money to conceive, develop and successfully get a new drug to market. The estimated mean cost from start to finish is $172 million. Add in capital costs and the inevitable failures along the way (90 percent of new drugs fail clinical trials) and that estimate rises to nearly $880 million per new drug. The average time required to develop a drug and get FDA approval, if it happens at all, is 10-15 years.
These are daunting numbers, and so it’s no surprise that the biotechnology and pharmaceutical industries are always keen to minimize financial exposure and risk. They are, after all, for-profit enterprises. They pursue every possible angle to ensure their drug investments yield maximal results.
They can do this in large part because of a long and lucrative arrangement with academia and independent, non-profit biomedical research institutes like Sanford Burnham Prebys, who have historically done the initial heavy lifting, from basic discovery through the early stages of clinical trials.
Universities and research institutes typically pay out of their own pockets to fund research in its earliest stages when ideas are too unproven to secure government funding. Big Biotech and Big Pharma prefer to take promising drugs over the finish line, but not necessarily get the process started.
Original thinking and innovation most often happen where the pursuit of new knowledge is the primary mission. That’s in the DNA of universities and independent research institutes. Universities and independent research institutes exist to ask and answer the hard, basic, necessary questions of science that may or may not lead to new drugs, treatments and improved human health.
Academic and non-profit scientists can do this kind of work because the institutions where they work are structured to support their research, and those institutions are supported by the National Institutes of Health (NIH) and its enduring, highly successful partnership with universities and research institutions to advance American science.
“We cannot be a strong nation unless we are a healthy nation. And so, we must recruit not only men and materials, but also knowledge and science in the service of national strength,” said President Franklin D. Roosevelt in 1940 at the dedication of the first buildings that would headquarter the newly created NIH.
That vision—and the promise of future achievement—is now severely threatened by the NIH’s announced efforts to cap indirect costs (IDC) and other related acts of obstruction (see earlier letters).

In recent years, there has been a push to create new and more collaborations between biotech/pharma and academia/non-profit research. These are welcome and vital, given the extraordinary costs and complexities of biomedical research.
For example, the Conrad Prebys Center for Chemical Genomics at Sanford Burnham Prebys is the largest nonprofit drug discovery center in the United States. Its researchers work with biotech, pharma and other institutions to translate promising ideas into new drugs by assessing and testing thousands of potential therapeutic compounds each year to determine which might meet the strict criteria for clinical trials.
But this kind of partnership comprises only a fraction of total research. It cannot compensate for the diminishing and dismemberment of the current NIH-supported system, which contributed to published research associated with every one of 210 new drugs approved by the FDA from 2010 to 2016.
Certainly, the system can be improved, but it has worked remarkably well for more than 75 years.
Biotech and Big Pharma are the beneficiaries of basic science conducted in academia and at independent research institutions. They often have limited ability to do basic research, or the desire. The return on investment (ROI) is just too low: In 2023, the projected ROI in pharmaceutical research and development spending was 4.1 percent, which represents an upswing. In 2022, it was 1.2 percent.
Advocates for the IDC cap and other related measures do not recognize this reality or the real costs of doing science. Implausibly and without evidence, they propose cuts, reversals and retrenched thinking at a time when public health threats are urgent (think measles) and experts say U.S. research is in decline.
IDC caps and similar misguided notions will only weaken science, our health and the nation.
Sincerely,David A. Brenner, MD
President and Chief Executive Officer
Donald Bren Chief Executive Chair
Science Goes “Dry,” Funding Cannot
A letter from David A. Brenner, MD, President and CEO of Sanford Burnham Prebys
The current and continuing crisis in biomedical research funding, spawned by recent actions by the federal government, is impairing how laboratories function and, consequentially, the promise of new drugs and treatments.
For many, scenes of scientists laboring in semi-isolation in the lab, surrounded by the tools of their trade, from microscopes to Bunsen burners, are stereotypical. But times and technologies have changed.
There are still plenty of old-school “wet labs” where scientists work with tissue cultures, organic chemicals and liquid substances. Wet labs remain the backbone of life sciences. But more and more, there are “dry labs” in which experiments and studies are performed using computational or mathematical applications. Life in silico.
Both types of laboratory house laboratory information management systems, known as LIMS, that employ advanced software programs capable of organizing, managing, validating and storing enormous amounts of data, then feed it back into a world increasingly awash in information.
In 2024, roughly 402 million terabytes of data were created, captured, copied or consumed each day, adding up to 149 zettabytes of data per year. A terabyte is 1 trillion bytes or units of information—the equivalent of 1,000 copies of the Encyclopedia Britannica. A zettabyte is one sextillion bytes or a 10 followed by 21 zeros. It is enough data to fill more than 25 billion 32GB Apple iPads, enough iPads to build a Great iPad Wall of China.
We generate more information in a couple of days than has been captured from the dawn of human civilization to the 21st century. By 2028, it’s estimated the annual volume of information will be almost 400 zettabytes.
Much of this data explosion comes from science.
One example: In July 2021, the technology company DeepMind announced it had used artificial intelligence (AI) to predict the shape of almost every protein in the human body, as well as hundreds of thousands of proteins in other organisms. Although the accuracy varied, they were able to share some 350,000 totally new predicted protein structures.
Such breadth and depth of new knowledge advances biomedical research, from better understanding protein functions in cells to defining diseases more precisely and thus potential remedies.
Indeed, researchers at Sanford Burnham Prebys have leveraged the power of machine learning to systematically predict patient responses to cancer drugs at single-cell resolution.

Source: Semrush/Exploding Topics
These capabilities are not inexpensive. A sophisticated LIMS with necessary computing power, specialized software and sufficient data storage can cost tens to hundreds of thousands of dollars per year. Like much else in life, prices tend only to rise, including more prosaic examples of indirect costs, such as utilities and insurance. They are all essential to functional, effective science.
Modern labs have embraced this transformative shift in the pursuit of knowledge. A scientist using tools like AI, robotics and next generation DNA sequencing can gather more data in a single experiment or in a weekend of work than they could in a career just a few years ago.
Effective research today demands collaboration and coordination across laboratories and disciplines. It involves diverse types of experts and expertise who work across the hall and around the world. They must be nimble and adaptable because what constitutes “current thinking” may rapidly become incomplete or outdated.

The pronouncements by the National Institutes of Health to cap indirect costs and related actions like stopping study sections necessary to review and fund new research projects slow, and perhaps reverse, progress toward new discoveries and cures in biomedical research. Ignorance is this.
Technologies in modern labs are not simply an “indirect cost” of research. They are essential to actually conducting research, from the costs of utilities, required regulatory compliance and safety measures to administrative support. Indirect costs are not a tax on science. They do not detract or subtract from research. They support the institution’s ability to support the science.
“Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less,” two-time Nobel laureate Marie Curie once said.
The current and continuing crisis compels scientists to do less. Without remedy, the consequences will be fearful.
Sincerely,David A. Brenner, MD
President and Chief Executive Officer
Donald Bren Chief Executive Chair
Frozen Sections: A Study in Science Stopped Cold
A letter from David A. Brenner, MD, President and CEO of Sanford Burnham Prebys
Since the end of World War II, when the federal government first determined that it would become the primary driver of American science, the National Institutes of Health, the largest funder of biomedical research in the world, has relied on a two-pronged process to fund biomedical research:
First, “study sections” would assess the quality and viability of proposed research grants.
Second, there would be a final review by an NIH advisory council and funding would be approved for worthy proposals.
After inauguration, the Trump administration initially froze all federal funding, including for biomedical research.
When a court issued a restraining order requiring them to backtrack, the administration decided to take an end-run around the court order. The NIH stopped the standard required practice of posting public meeting notifications in the Federal Register, the official daily publication of the U.S. government. As a result, dozens of long-scheduled study sections and advisory councils were canceled, effectively suspending the review process and stopping all new grant funding.
No notice, no meetings.
No meetings, no grants.
No grants, no science.

Top: the first NIH study section in 1946
and a study section today.
Study sections are gatherings of independent scientists deemed among the best and most experienced in their field(s). They possess the knowledge and expertise to effectively judge the merits of a grant application: Is the research topic and goal worthy of investigation?
Does the applying researcher possess the credentials and abilities to effectively conduct the science proposed? Is there compelling data to support the proposal? Will the money be well-spent?
Study sections are grueling. They are not for the weak of heart or data. Proposals are frequently rejected, sent back with requests for more information, more research or greater refinement. Proposals that make it to the second and final stage have been scored on a 9-point scale (from 1 for exceptional to 9 for poor) for both overall impact and individual review criteria. These proposals compete against other scored proposals for actual funding.
Only the best of the best prevail, and not very many of them. Each year, the National Institutes of Health receives more than 50,000 grant proposals, a number that is steadily increasing. Less than one in five of these proposals is funded, a number that is steadily decreasing.
Study sections are the engines of science. They move research from idea to action. If they aren’t working, neither is science.
Study sections aren’t the only part of the research machine that has stalled. Required notices of meetings by advisory councils have also largely stopped. The meetings provide additional review and make final funding recommendations.
Each of the 27 NIH institutes has its own advisory council and they typically meet in January, May and September. None of these councils has met since the communications freeze was ordered in late-January, effectively cutting off the means to award new grants.
The result: New science has effectively stopped. Researchers at institutions, large and small, who have labored for months, perhaps years, to develop new proposals cannot obtain required feedback, let alone funding. The study section halt has already held up an estimated $1.5 billion in new funding for everything from Alzheimer’s disease and cancer to allergies, addiction and antibiotic-resistant bacteria.
The harm is real. Scientists who cannot get their research reviewed and funded in timely fashion face the prospect of cutting back their work, including laying off staff and support personnel. Some universities and medical schools have already enacted hiring freezes or paused graduate admissions.
The veteran scientists who participate as reviewers in study sections are usually unpaid. They do it as a service to each other and to keep science moving forward. With study sections suspended, nothing is moving, including progress toward improved health.
Sincerely,David A. Brenner, MD
President and Chief Executive Officer
Donald Bren Chief Executive Chair
Building a Stronger Foundation for Science
A letter from David A. Brenner, MD, President and CEO of Sanford Burnham Prebys
The National Institutes of Health’s (NIH) proposed cap on Facilities and Administrative (F&A) costs, now paused pending the outcome of several lawsuits, remains ill-conceived and disregards the long, productive relationship between the federal government and the scientific community, one that has made the U.S. research enterprise unparalleled in the world.
In response to my first letter, I received several questions about the NIH’s rationale for their decision to cap F&A at 15 percent and, in particular, the role of private foundations in supporting research.
The NIH explained its dramatic reduction by noting that foundations typically pay even lower F&A rates than the government. The rationale is misleading.
Private foundations play an indisputably valuable role in the discovery of new drugs and therapies. Their support is often the boost that jumpstarts experiments, closes a critical funding gap, drives a fundamental systems change or simply accelerates progress toward a targeted goal, whether that’s a promising new drug to treat Alzheimer’s disease or a cure for a rare congenital condition in children.
Every year, foundations and other sources of philanthropy give billions of dollars to specific purposes and causes.
But comparisons between the type of research funded by the federal government and research funded by foundations is apples and oranges. If science is fundable by foundations, it is often precisely because it is not fundable by the NIH.
This is by design. The NIH historically emphasizes support of traditional lab-based biomedical research. Foundations, on the other hand, often specifically target research that NIH does not support because they want to fill gaps in the scientific enterprise to get the most impact from their investments.
They may be involved in global issues like reducing hunger or eliminating diseases endemic in distant parts of the world. They may focus on a specific health issue, such as a rare childhood disease. Or they may focus on early-stage investigators, translational research or high-risk, high-reward research that the NIH doesn’t fund.
If scientists want to pursue these projects, foundations are frequently the only source of support. Research institutions often have no choice but to pursue foundation money to support these promising areas of research.
And so they do, even with foundations’ lower F&A rates. But the practice does not represent the true cost of science and research institutions must use other sources of money, often philanthropic, to cover the shortfall.
This is possible only because foundation funding comprises a small percentage of support at research institutions. Foundation funding accounts for roughly 6 percent of biomedical research in the United States, according to a Council on Governmental Relations study. If foundations made up a larger portion of the funding pie, then research institutions would not be able to fill the shortfall or accept their money.
The NIH is the largest funder of biomedical research in the world. Last year, it devoted nearly 83 percent of its $48 billion budget to medical research conducted at universities and research institutions like Sanford Burnham Prebys. That translated to more than $35 billion spent supporting almost 50,000 research grants to 300,000 researchers at more than 2,500 universities, medical schools and research institutions in the U.S. Roughly $9 billion was allocated for F&A expenses.
If neither the NIH nor foundations adequately cover F&A expenses, institutions like Sanford Burnham Prebys must make up the difference themselves, reduce their scientific activity or even abandon aspects of it altogether. The result: Biomedical research slows down and cures are delayed.
A robust analysis of the role of foundations in the research enterprise would have led the NIH to issue a much different notice: One that called for non-federal funders to begin supporting the true cost of research. Instead, they misrepresented how foundations fund research to falsely rationalize their proposed budget cuts to lifesaving biomedical research.
This is a moment of crisis. The NIH F&A cap represents an unwarranted threat to the health of biomedical research—and by extension, our own health. It is an existential threat to some institutions. We must respond together to achieve our goal: Better, longer lives for all.
The scientific community stands ready to help, to explain why these costs are necessary, and to offer guidance and advocacy.
Sincerely,David A. Brenner, MD
President and Chief Executive Officer
Donald Bren Chief Executive Chair
The Unacceptable Cost of Capping Indirect Costs
A letter from David A. Brenner, MD, President and CEO of Sanford Burnham Prebys
Recently, the National Institutes of Health (NIH) announced it would immediately cut the indirect cost rate to an across-the-board 15% cap on all biomedical research funding, current and future. The action is abrupt, arbitrary and ill-conceived—and it represents a profound and unacceptable threat to universities, hospitals and research institutions like Sanford Burnham Prebys.
We stand adamantly opposed to the NIH policy change and, in alliance with scientific institutions and organizations on the Mesa and across the country, we are working to have the policy change revoked, and the future of good science assured.
There is always room for reasoned discussion, reforms and remedies to all issues, but the NIH’s decision creates a real and perhaps existential threat to the foundation, quality and prestige of U.S. science, now and in the years to come.
Since 1947, the federal government and thousands of research institutes, universities and hospitals across the country have benefitted from a strong and unshakeable partnership dedicated to advancing biomedical discovery in the search for and the development of new drugs, treatments and therapies for the common good.
This powerful collaboration has made U.S. science and medicine a global exemplar, from basic research that lays the foundations of knowledge and inspiration to translational and transformational science that results in the development and introduction of new and better treatments for everything from cancer to Alzheimer’s to infectious diseases to the ubiquitous metabolic disorders of obesity, diabetes and fatty liver disease.
Biomedical research is our bulwark against and the remedy for current and future threats to our health, both as individuals and as a society.
There are only two categories of funding in biomedical research. The first is “direct costs,” which are those easily ascribed to a specific research project, such as chemicals necessary for experiments and the salaries of those doing them.
Indirect costs cover the ways, means and tools necessary for scientists to do their work. They are the critical and unavoidable expenses related to the infrastructure of biomedical research, such as keeping the lights and heat on in laboratories, administering payrolls, purchasing specialized instruments, maintaining data cybersecurity and ensuring the safety of human participants.
A 15% cap on indirect costs support recklessly slashes biomedical research, negatively affecting almost every research institute, university and hospital, along with the biotechnology and pharmaceutical industries that rely upon our original and innovative efforts.
The ripple effect is immediate and long-term. The cap would measurably slow the pace of discovery and progress as scientists revised their goals, retrenched efforts, reduced investigations and, in some cases, just stopped doing or pursuing promising avenues of inquiry.
The cap poses particular impact in a place like San Diego, which has long been a hub for biomedical research. The region is home to nearly 2,000 leading universities, research institutes, hospitals, biotechnology companies and other life science enterprises that, according to Biocom. In 2023, these entities directly employed nearly 76,000 people (average annual salary: $163,177), supported more than 178,000 related jobs and generated more than $56 billion in total economic output.
The NIH and the National Science Foundation are major contributors to the region’s scientific success. In 2023, they provided $2.2 billion in overall funding.
CA-50 is the U.S. congressional district represented by Rep. Scott Peters. The district encompasses a large swath of coastal San Diego County, from Carlsbad to the U.S.-Mexico border, including La Jolla and Sanford Burnham Prebys. In 2023, according to FASEB, NIH research funding in the district exceeded $1.3 billion to 61 research sites. This year, Sanford Burnham Prebys researchers will receive more than $72 million in NIH funding.
These numbers are even greater and more impressive statewide: 466,888 Californians directly employed in life sciences and 1.24 million jobs supported for a total economic output of more than $414 billion in 2023.
No plausible or viable alternatives can match federal scientific support. Foundations and philanthropy provide only a relative fraction and their funding often comes with restrictions and little or no support for indirect costs.
Our response to the NIH action has been multi-pronged and evolving. As an institute, we are in communication with local, state and national officials to provide context, information and help them leverage their specific abilities to reverse course.
We are collaborating with our Mesa partners and with organizations like the Council on Governmental Relations, the Association of Independent Research Institutes (AIRI) and the Association of American Universities (AAU) to multiply the power of our message and influence.
We encourage those who share our commitment to scientific research to stay informed about this issue and engage with policymakers or organizations that advocate for sustained research funding.
Internally, we are assessing immediate and future effects of a 15% cut on programs and projects at Sanford Burnham Prebys, and developing plans and policies to mitigate adverse effects. This is an ongoing process that involves administration, faculty and staff.
The NIH’s policy change imperils the future of science in California and across the country, not only the continued development of life-saving therapeutics and treatments, but the training and prospering of new generations of scientists.
With a cap of 15%, fewer scientists will embrace the mission because they will lack sufficient means to do so. New generations of scientists will not have the same opportunities. The nation’s global leadership in life sciences will wither; the pipeline of new drugs, treatments and therapies will become a trickle.
No one advocates for such a future. The emergence of new tools like artificial intelligence, computational biology, machine learning and the rapid, maturing application of disciplines like epigenomics, transcriptomics and metabolomics have propelled biomedical research into a new era of unprecedented promise and potential.Our mission and vision at Sanford Burnham Prebys embraces these opportunities and possibilities to excel—and we are determined to do so.
Sincerely,David A. Brenner, MD
President and Chief Executive Officer
Donald Bren Chief Executive Chair
Costs of Federally Sponsored Research

Cumulative Growth of Federal Research Regulations Since 1991
Science is complex, and doing it well requires rigorous adherence to high standards of conduct and methodology. These standards include important regulations governing safety, security, financial transparency and accountability.
Over the years, these requirements have steadily grown in the aggregate, especially in the last 10 years. Complying with them can be a challenge for scientists, especially when federal funding to support research (including related indirect costs) is declining or at risk.

Regulations & Policies Adopted or Substantially Modified & Changes in Interpretation Affecting Federal Research with GDP overlay. Cumulative Since 1991. Source: COGR
Download COGR Graphics Word Doc

Institute Indirect Costs
Direct Costs
- Salary support and benefits for faculty, research staff and postdocs working on the project
- Stipends for graduate students assigned to the project
- Laboratory supplies, chemicals, and glassware purchased for a project
- Travel to a conference to present results of the project
- Certain research equipment, including computers
- Publication costs
Indirect Costs
- Building, maintaining, operating, and renewing research buildings and equipment
- Salary of a departmental administrator
- Library costs
- Depreciation of research equipment and buildings
- Laboratory utilities (light, heating/cooling, power)
- Hazardous chemical and biological agent management
- Internet
- Data transmission and storage
- Radiation safety
- Insurance
- Administrative systems and services
- Compliance with federal, state, and local regulations (e.g., Institutional Review Boards (IRBs) for human subject or animal research)
Below are frequently asked questions about facilities and administrative costs (F&A), relevant to the recent National Institutes of Health’s announcement to cap these “indirect costs” at 15% across-the-board in biomedical research. The information is provided by the Association of Independent Research Institutes.
- What are Facilities and Administrative costs?
Commonly called F&A costs or “indirect costs,” these are essential costs of conducting research. The federal government’s longstanding recognition and payment of its share of these costs has helped U.S. colleges and research institutions build and support the required research infrastructure that has made the American research enterprise the best in the world.
When the government provides a grant to a research institution for a project, a portion (typically 67-75%) of the budget is available directly to the research team. These are known as “direct costs,” the portion of the grant that supports researcher salaries, graduate students, equipment and related supplies. Another portion (typically 25-33%) covers necessary research infrastructure and operating expenses that the institute provides to support the research.
These “indirect costs” include state-of-the art research laboratories; high-speed data processing; national security protections (e.g., export controls); patient safety (e.g., human subjects protections); radiation safety and hazardous waste disposal; personnel required to support essential administrative and regulatory compliance work, maintenance staff and other activities necessary for supporting research.
- Why does the federal government provide support for F&A costs of research?
F&A costs are research costs. Research institutions and the federal government have a long-standing and successful partnership that grew out of World War II. The federal government relies on institutions to conduct research in the national interest. This includes research aimed at meeting specific national goals, such as health and welfare, economic growth and national defense.
Performing research on behalf of federal agencies incurs a variety of expenses that would not otherwise exist for institutions. Research institutions—not the federal government—assume the risk of building the necessary infrastructure to support this research in anticipation that their research faculty will successfully compete for federal research grants and thus the institutions will be reimbursed for a part of the associated infrastructure costs.
- Do research institutions contribute any of their own funds towards research?
Yes. Behind the federal government, research institutions are the second leading sponsor of the academic research and development (R&D) that takes place on their campuses. Federal data show that colleges and research institutions pay one-quarter of total academic R&D expenditures from their own funds. In FY23, for example, research institution contributions for R&D amounted to $27.7 billion, including $6.8 billion in unreimbursed F&A costs.
These commitments to academic R&D by research institutions themselves significantly exceed the combined total of all other non-federal sources of support for academic R&D. In FY 22, those other sources were state and local government (5%), industry (6%) and foundations (6%).
Federal spending on higher education R&D was almost $60 billion in FY23, or 55% of all funding for academic R&D. While research institutions contribute significantly to the costs of research, their available resources continue to be stretched thin. State support for public research institutions has declined greatly over the past 20 years and, in many cases, research institutions are educating more students. The notion that research institutions should cover even more of the expense of conducting research for the federal government is not realistic.
- Do research institutions “profit” from the F&A cost reimbursements they receive associated with federal research grants?
No, research institutions absolutely do not. There is no financial gain from F&A recovery. As defined by the federal government, these are reimbursements for costs incurred by institutions in conducting research on behalf of the government. It is impossible for the reimbursements to result in a profit.
In fact, research institutions are not even fully reimbursed for the expenses they incur to provide the necessary infrastructure and support to conduct federal research. According to data collected by the National Science Foundation, in FY23 research institutions contributed approximately $6.8 billion in facilities and administrative expenditures not reimbursed by the government.
$6,800,000,000
F&A paid by research institutions to cover the full cost of research
- Have institutional contributions to research been increasing or decreasing?
Increasing. Since 2010, the amount of support in real dollars that colleges and research institutions provide for research conducted by their faculty has grown 65%, faster than any other sector, including the federal government which has seen only 13% growth in the same time period.
The increase in research institutions’ support for the R&D they conduct is due in part to the rising compliance costs associated with increased federal research regulations in areas like human subject protection, export control compliance, and ensuring research security and integrity. Unlike other sectors that conduct government research, research institutions must subsidize compliance costs from their own financial resources.
- Has the percentage of federal funding for F&A cost reimbursements changed over time?
No. F&A costs recovered by research institutions have remained flat for more than 20 years. For example, the National Institutes of Health’s percent of total funding going towards F&A cost reimbursements has remained unchanged at approximately 27-28% of total funding since 2002. - How much does the federal government pay for research institutions’ F&A expenses compared to what it pays other government research performers, such as the national laboratories and industrial contractors?
Past studies suggest that proportionately, F&A expenses for research institutions are slightly less than those for other research performers. A study in 2000 by the RAND Corporation found research institutions had the lowest percentage total research costs classified as F&A (31%).
Federal laboratories were somewhat higher at 33% and industrial laboratories were higher still at 36%. This demonstrates that research institutions are efficient performers of research. Unfortunately, a study comparable to the RAND study has not been undertaken in recent years. Such a study would be welcomed by the research community.
And recall that the federal government’s payment to research institutions for its share of F&A costs does not reimburse their full expenses. This is unlike other sectors that receive full compensation for all their expenses.
The federal government has smartly invested in research
- F&A costs at research institutions are lower than other sectors
- The government does not pay a profit to research institutions like it must for industry research performers
- There is a specific cap on the amount the government will cover for administrative expenses
- Can research institutions itemize F&A expenses for each research project grant?
No. F&A expenses cannot be itemized for each research project because, by definition, they are costs incurred for common or joint purposes, benefit more than one activity and are not easy to allocate directly to their benefiting activities.
F&A costs are aggregated, with each institution totaling its costs incurred for hundreds or thousands of individual awards that faculty and institutions annually receive. Total F&A costs are then divided by a subset of direct research costs to arrive at an F&A cost rate, which is then reviewed and approved by the government and applied to the same subset of direct research costs, on a project-by-project basis.
This reimbursement methodology is widely accepted by the federal oversight and audit community, and it provides a much more efficient and rational approach to reimbursing research institutions for these costs than attempting to allocate them to individual projects or negotiating and determining an F&A rate for each individual research award.
The sheer volume of grants, contracts, and other awards received by research institutions from various federal agencies, many of which are small in size, means having an established F&A rate makes the grant process more efficient.
- Since foundations pay less for F&A costs reimbursements than the federal government, is the federal government subsidizing the infrastructure required to do foundation-sponsored research?
No. To the extent that a foundation does not pay for certain F&A expenses, these costs must be covered by the institution. OMB rules specifically require research institutions to ensure the federal government does not subsidize non-federally sponsored research activity, including research and associated infrastructure costs performed by institutions for private foundations.
However, foundations categorize and pay grant-related expenses very differently than the federal government. For example, foundations often categorize some items as direct expenses that federal rules require classification as F&A expenses. Many foundations do not have strict rules regarding consistent classification of costs. This further underscores that direct and F&A costs are all part of total research costs.
A core tenant of the partnership between the federal government and research institutions is that the government shares in the costs of research by providing institutions with competitively awarded grants to support the people, tools, and infrastructure necessary to conduct high-quality research for the nation.
Historically, most foundations view their grants as supplementing research that scientists are already conducting. To this day, most foundation research funding is viewed as supplementing existing federal and non-federal research.
Finally, foundation funding for research institutions remains a small proportion of total academic R&D funding (6%) compared to federal funding (55%) and the funding provided to support academic R&D by colleges and universities themselves (25%).
- Are federal F&A cost reimbursements used to subsidize other campus accounts, such as athletics or student housing construction?
No. OMB rules require that F&A cost reimbursement rates be based only on research facilities, operations and support used by federally funded research, not education or other university facilities or activities.
- Is it true that research institutions with F&A rates over 50% spend more than half the grant funds they receive from the federal government to pay for F&A expenses?
No. A research institution’s F&A cost rate is not a percent of the total grant, but rather a percentage of a subset of the research project’s direct costs. Currently, the average amount paid to research institutions for F&A expenses is approximately 25-33% of the total amount of a grant.
- How does the F&A rate determine how much research institution receives for F&A costs on a grant?
To determine the level of F&A expenses the federal government will cover, every two to four years, the agency responsible for setting a research institution’s F&A cost rate (either the Department of Defense Office of Naval Research or the Department of Health and Human Services) will comprehensively audit and/or assess these shared costs to determine the appropriate federal reimbursement rate based upon specific costs that have been deemed allowable expenses by the OMB.
The reimbursement rate is a percentage of a subset of direct research costs (not a percentage of total award). Some direct research costs (like equipment, capital expenditures, charges for patient care, rental costs, tuition remission and scholarships and fellowships) are excluded from the direct cost for F&A cost calculation purposes. This remaining amount is known as modified total direct cost (MTDC).
- Why do F&A cost reimbursement rates vary between institutions?
Federal agency officials and research institution administrators predetermine an overall percentage of allowed F&A cost reimbursements to be paid based on documented historical costs and cost analysis studies.
The final rates are based on a rigorous review and audit of the actual funds previously spent for such costs. F&A cost reimbursement rates vary from institution to institution because construction, maintenance, utilities, and administration costs vary by institution and by region.
Additionally, F&A rates depend upon other factors, such as the age and condition of facilities and buildings and the amount of renovation and construction needed to house certain types of research projects. For example, the F&A costs for a biomedical research facility built in an urban area that experiences earthquakes are different than an engineering research facility built in a rural area.
Science statistics by state
- NIH In Your State/United for Medical Research
- Federation of American Societies of Experimental Biology (funding data)
Life sciences for San Diego and California (Biocom)
2023 San Diego Life Science Economic Impact
- $56.6B total economic output
- $2.2B overall funding from the NIH and NSF
- 178,143 total jobs supported
- $17.6B total labor income
- 75,816 directly employed life science workers
- 1,966 life science establishments
- $163,177 average yearly salary
2023 California Life Science Economic Impact
- $414.2B total economic output
- $6.02B overall funding from the NIH and NSF
- 1.24M total jobs supported
- $64.3B total labor income
- 466,888 directly employed life science workers
- 16,576 life science establishments
- $146,088 average yearly salary
- 10,900 NIH and NSF awards
- $59.6B private investment
- $34.1B venture capital raised
- 7,343 patents filed
NIH Funding by U.S. Congressional District in San Diego Region
- CA-50 (Peters): 1,864 projects, totaling $1,321,469,689
- CA-48 (Issa): 6 projects, totaling $3,169,642
- CA-49 (Levin): 32 projects, totaling $28,626,860
- CA-51 (Jacobs): 196 projects, totaling $103,194,224
- CA-52 (Varga): 0 projects
Sanford Burnham Prebys
- 49: Current number of students in the Graduate School of Biomedical Sciences
- 65: Current number of postdoctoral trainees
- $72,523,957 in active NIH funding
Sanford Burnham Prebys government representatives highlighted.
Federal Representatives
Find your federal senator and representative
Federal | Senate
- Adam Schiff, Democrat
- DC Office: (202) 224-3841
- Alex Padilla, Democrat
- DC Office: (202) 224-3553
- San Diego Office: (619) 239-3884
Federal | House of Representatives
- Darrell Issa, Republican, District 48
- DC Office: (202) 225-5672
- San Marcos: (760) 304-7575
- Sara Jacobs, Democrat, District 5
- DC Office: (202) 225-2040
- San Diego: (619) 280-5353
- Mike Levin, Democrat, District 49
- DC Office: (202) 225-3906
- Oceanside: (760) 599-5000
- Scott Peters, Democrat, District 50
- DC Office: (202) 225-0508
- San Diego: (858) 455-5550
- Juan Vargas, Democrat, District 52
- DC Office: (202) 225-8045
- Chula Vista: (619) 422-5963
State Legislators
Find you state senator and assembly member
Senate
- Steve Padilla, Democrat, District 18
- Sacramento Office: (916) 651-4039
- Chula Vista: (619) 409-7690
- Brian Jones, Republican, District 40
- Sacramento Office: (916) 651-4038
- Escondido, (760) 796-4655
- San Diego, (858) 547-3818
- Akilah Weber Pierson, Democrat, District 39
- Sacramento Office: (916) 651-4039
- San Diego: (619) 688-6700
- Catherine Blakespear, Democrat, District 38
- Sacramento Office: (916) 651-4038
- Encinitas: (760) 642-0809
Assembly
- Laurie Davies, Republican, District 74
- Sacramento Office: (916) 319-2074
- Oceanside: (760) 433-7400
- Carl DeMaio, Republican, District 75
- Sacramento Office: (916) 319-2075
- San Diego: (858) 566-7538
- Darshana Patel, Democrat, District 76
- Sacramento Office: (916) 319-2076
- San Diego: (858) 675-0760
- Tasha Boerner, Democrat, District 77
- Sacramento Office: (916) 319-2077
- Carlsbad: (760) 434-7605
- Christopher Ward, Democrat, District 78
- Sacramento Office: (916) 319-2078
- San Diego: (619) 280-7801
- LaShae Collins, Democrat, District 79
- Sacramento Office: (916) 319-2079
- La Mesa: (619) 465-7903
- David Alvarez, Democrat, District 80
- Sacramento Office: (916) 319-2080
- Chula Vista: (619) 498-8580
- Association of Independent Research Institutes AIRI Statement on Recent Disruptions to Scientific Research
- American Association of Medical Colleges AAMC Statement on Drastic Cuts to NIH-Funded Research
- Association of American Universities Statement of AAU on Cuts to NIH Facilities and Administrative (F&A) Research Costs
- Association of Public & Land-Grant Universities APLU Statement on Cuts to Reimbursement of NIH Facilities & Administrative Costs
- National Bureau of Economic Research Indirect Cost Recovery in U.S. Innovation Policy: History, Evidence, and Avenues for Reform—A Working Paper
- ‘What’s Going to Happen to Science?’ The US university-federal partnership is a miracle for scientific progress | Inside Higher Ed
- Safeguarding the future of biomedical science in the United States NIH’s abrupt decision to cap indirect costs threatens the critical infrastructure supporting research | Cell
- Defend the NIH Today, the National Institutes of Health — biomedical science itself — is under attack | Timmerman Report
- Cutting funding for science can have consequences for the economy, US technological competitiveness America has already lost its global competitive edge in science, and funding cuts may further a precipitous decline. | The Conversation
- ‘America can’t be great without great science. That is where the Academies can help.’ Actions by the federal government affecting agencies that fund science have sent shock waves through the research community | NASEM
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