I’m a Former HMS Dean. Here’s What Trump’s NIH Cuts Will Actually Do.

Last week, the National Institutes of Health announced a significant cut in funding for the so-called “indirect costs” of biomedical research. Indirect costs may sound like euphemism for waste — but that couldn’t be further from the truth.

Indirect costs like the costs of research facilities are no less real than direct ones. Although funding cuts were temporarily paused by a judge, Harvard and its affiliated hospitals stand to lose hundreds of millions of dollars that now fund their research programs — and other U.S. research institutions stand to lose billions more. This is especially troubling as large scale and technologically sophisticated infrastructure has become more and more vital to modern biomedical research.

NIH funding has made the U.S. the unquestioned world leader in biomedical research. The NIH began funding biomedical research at hospitals and universities in 1938, and in 1947, it began helping pay for the equally critical indirect costs of research as well. This public-private partnership grew rapidly since the 1950’s and has reaped enormous rewards, including countless insights into disease pathogenesis and innumerable therapeutic advances.

The NIH grant process begins with individual scientists submitting proposals for NIH peer review, with budgets for salaries, supplies and equipment. Those that survive this process receive a grant for “direct costs.”

Meanwhile, the NIH provides additional funds to the host institution to cover part of those costs of institutional research that are not project-specific. These indirect costs parallel similar arrangements in many other business and cooperative agreements within and outside academia.

These funds cover the costs of research facilities and their maintenance, specialized cores and equipment, computing, hazardous waste management, compliance including for clinical trials and animal studies, and countless other very real and necessary costs of research. Those claiming that indirect cost funds support “slush funds,” business class travel, and bloated administration are living in a fantasyland of their own making.

Who decides how much indirect costs the NIH pays for? Indirect cost rates are set by an office in the Department of Health and Human Services distinct from the NIH. Institutions provide data on prior years’ spending in predefined categories and are required to provide written assurances that the data are accurate. As dean of Harvard Medical School, I signed and attested to the veracity of these documents before they were sent to D.C. The HHS office reviews these data and establishes a rate — today, 69 percent for HMS — explicitly calculated to cover the costs for the specific component of institutional research funded by the NIH.

These funds then supplement the allocation for direct costs — so a $100,000 NIH grant at HMS would provide $100,000 for direct costs and would be accompanied by a $69,000 allowance for indirect costs. The new Trump administration measure would cap that rate at 15 percent — yielding an indirect costs supplement of just $15,000 in this example — which is far from sufficient in a world where research inevitably requires the use of expensive, communal University services.

In 2024, 73 percent of HMS external research support was from the federal government. Of HMS’s $234 million in federal research funding, $74 million was for indirect costs, representing 31.6 percent of total federal funding. Should the NIH plan take effect, almost $60 million per year would vanish, and several fold that amount would be lost at the HMS affiliated institutions whose NIH funding is much higher than HMS.

Importantly, these IDC funds don’t cover all institutional research-related expenses. Other sources like endowment payouts must be and are used. Much has been made of the fact that some grants from private foundations specify just 10 to 15 percent indirect costs. But those numbers are misleading. First, these grants typically put elements found in NIH indirect costs into their direct cost budgets, so their effective indirect costs rate is often much higher. Second, NIH grants are not permitted to fill shortfalls in indirect cost allocations for non-NIH grants — to avoid cross-subsidies, these must be covered by the institution.

Of course, despite all these points, NIH funding mechanisms are far from perfect. As with any bureaucracy, there are inefficiencies, and there would be nothing wrong with the new administration taking advantage of this transitional moment to streamline the process.

But instead of making a legitimate effort to increase the efficiency of federal research dollars, the Trump administration simply announced an immediate multi-billion-dollar cut of funding that institutions had already agreed upon and budgeted. Worse, the move was supported by a false narrative that these funds were largely administrative bloat, unrelated to the costs of research — a view reflecting ignorance, malevolence or an unhealthy combination of both. Moreover, while the cost of compliance to federal regulations has certainly increased — and should be addressed in any reform — this spending is currently required by law. It is hardly fair to blame private institutions for complying with federal law.

If these cuts do come to pass, their consequences for biomedical research will be severe. Of course the effects will vary across research institutions, as institutions differ markedly in their operating models and financial situations. Jobs will be lost, including faculty, trainees, and support staff. Ongoing and planned research studies will be canceled, and the advancement of life-saving science will suffer.

Of course, like many natural disasters, after the damage is cleaned up and the casualties counted, it is sometimes possible to build back a more resilient community for the survivors. In this case, it would be far better to avoid a fully man-made disaster altogether. Instead, we should work with intensity and commitment to improve the excellent system that we have, thinking out of the box where necessary, to the benefit of the research community, and the health of the U.S. and the world.

Jeffrey S. Flier is the Higginson Professor of Physiology and Medicine and was the dean of Harvard Medical School from 2007 to 2016. He is a co-president of the Council on Academic Freedom at Harvard.