Yale University research with the potential to save the lives of infants with heart defects, prevent and slow Alzheimer’s disease, improve the quality of life as we age, address mental health, and extend cancer patients’ lives are among the projects in danger of being slowed or stopped due to National Institutes of Health (NIH) plans to cut indirect cost reimbursements.
A federal judge in Boston on Feb. 10 issued a temporary order blocking the cuts to indirect cost reimbursements from taking effect in 22 states, including Connecticut. But the prospect of those cuts remains a major concern for research universities, including Yale, which supported the lawsuit that led to the court action.
The NIH, a federal government agency, is the world’s single biggest public funder of biomedical and behavioral research. It announced Feb. 7 that it would reduce to 15% the rate paid to universities for facilities and administrative (F&A) costs related to new and existing research grants. This rate is lower than standard for — and in some cases much lower than already negotiated with — many universities, including Yale.
In a message Feb. 10 to the Yale community, issued before the judge’s ruling, Yale President Maurie McInnis said that NIH’s decision to cut the rate “poses a considerable threat to Yale’s research endeavors, which lead to medical breakthroughs, support patients in clinical trials, and drive economic growth.”
Michael Crair, Yale’s vice provost for research, said separately that the cuts would “severely damage our nation’s ability to develop new lifesaving treatments for people across the country.” And he emphasized that the cuts could cause the United States to lose its global standing for biomedical innovation and allow other nations to “catch up and surpass us.”
As part of Yale’s initial response to the NIH’s plans, the university provided a public declaration in support of legal action filed against the agency on Feb. 10 by 22 state attorneys general, including Attorney General William Tong of Connecticut. That case quickly led to the order temporarily blocking the cuts from taking effect in those states.
Separately on Feb. 10, the Association of American Universities (AAU), of which Yale is a member, and partners also sued to block the cuts nationwide. It is the first time in AAU history that the group, which represents 71 major research universities, has sued the government. McInnis sits on its board.
Most science and health research conducted by Yale is performed by the university on behalf of the federal government. The government determines which research projects it will fund from among proposals submitted by faculty, and the government provides the university with reimbursements to cover the costs of conducting research on its behalf.
The federal government’s partnership with universities advances national interests
Yale leaders explained that federal agencies work in partnership with research universities to conduct research that advances national interests in better health, quality of life, and economic growth. This relationship is critical to the United States’ research enterprise, especially because non-profit research institutions such as Yale do not serve shareholders and are not driven by profit margins.
Said Crair: “Our singular goal is to develop research breakthroughs that positively impact humanity.”
Federal indirect cost reimbursements cover the actual expenses incurred in supporting federally funded research.
“Simply put,” Crair said, “work funded by F&A cost reimbursements supports every aspect of research that helps Yale create lifesaving medical advances and develop cutting-edge technology that bolsters national competitiveness and economic prosperity.”
At Yale this year alone, F&A costs have kept equipment running, paid for utilities, and provided other supportive services in 2,275 clinical trials involving more than 38,000 patients, according to Dr. Nancy J. Brown, the Jean and David W. Wallace Dean at the Yale School of Medicine.
Just as there can be no research enterprise in the absence of researchers and properly functioning laboratories, Yale leaders emphasized, there can be no research in the absence of F&A cost coverage to ensure safety and provide an environment in which to conduct the work.
Yale’s endowment and research costs
In her Feb. 10 message, McInnis underscored that Yale’s “commitment to research is unwavering, demonstrated by significant financial contributions from our own institutional funds.”
In fiscal year 2024, she noted, Yale invested $432 million in research — more than double the amount received in indirect cost reimbursements from the NIH.
“While our endowment provides critical support for research,” McInnis added, “it is not a limitless resource. Most of the endowment is legally restricted to specific uses, and the rest supports core priorities, such as financial aid and long-term investments in research infrastructure.”
Reallocating a greater portion of endowment revenue to fund the federal government’s “fair share” of the costs of federally sponsored research would require the university to reduce funding for other priorities and would reduce the amount of research the university conducts, said Yale Provost Scott Strobel.
These priorities include $230 million in endowment revenue spent on undergraduate scholarships, enabling Yale to be the least expensive four-year school in Connecticut for families earning less than $110,000. This is on top of $325 million in endowment revenue spent on financial aid and support of graduate and professional students.
Beyond Yale, Crair pointed out that lessening research capacity in the United States will also lead to many other negative outcomes. It will:
- impede progress on U.S. medical, scientific, technical, and economic priorities;
- result in fewer jobs and slower economic growth;
- cede U.S. companies’ competitive advantage to other nations as a catalyst of new industries; and
- threaten the U.S.’s long-term competitiveness, particularly as countries like China continue to boost their research funding and research infrastructure at a pace already surpassing that of the United States.
McInnis reinforced this in her message.
“Reducing indirect cost recovery jeopardizes the symbiotic relationship between universities and the federal government that advances national interests,” the president said. “For decades, this partnership has been instrumental in achieving better health, enhanced quality of life, and economic growth. Curtailing funding threatens not just academic and research communities but also the well-being of our nation. It could impede progress on U.S. medical priorities that introduce improved treatments; slow scientific progress; result in fewer jobs; hinder economic growth; and diminish our global competitiveness.”
In concluding, she underscored Yale’s perennial mission.
“Our work realizing Yale’s mission of education, research, preservation, and practice is essential,” she said. “Every day, we contribute to the creation of knowledge and the application of that knowledge to benefit humanity.”
