Philly universities say jobs and research projects are imperiled by potential NIH cuts

At Jacqueline Barker’s lab at Drexel University, combined federal grants totaling $1.25 million funds her work studying addiction, HIV, and how infectious diseases impact the brain.

About $292,000 of the National Institutes of Health grants cover so-called “indirect costs” — in her lab, paying for everything from security guards to the administrative staff.

Now, President Donald Trump’s administration has threatened to dramatically slash those funds, which add up to tens of millions of dollars this year alone for Philadelphia-area institutions receiving more than $1.5 billion in NIH funding. Legal challenges are pending to the directive rolled out last week with only a few days’ notice.

And while a federal judge has paused the funding cuts, the uncertainty fueled by the political targeting of billions in research funding has Barker and other researchers concerned about the future of scientific research at academic institutions around the country.

Indirect funds cover wide-ranging expenses considered crucial to running research projects. For example, clinical trials that enroll thousands of patients to research new drugs or treatments rely on indirect costs to pay the salaries of staffers who protect patients’ confidentiality and monitor their care.

“A patient’s experience and their comfort is funded through indirect costs,” said Barker, an associate professor of pharmacology and physiology at Drexel, whose work currently does not include a clinical trial. “They are essential to do what we want to do on a daily basis.”

Like other researchers interviewed by The Inquirer, she spoke about her personal concerns about the cuts, and not on behalf of her university, sharing fears that the funding pullback could affect ongoing studies, interfere with clinical trials, and keep young scientists from pursuing careers in the field.

Local researchers say they’re rattled by the chaotic nature of the proposed cuts, announced by the NIH late on a Friday night and set to take effect the next business day, until the judge’s restraining orders blocked them.

The administration says its plan will curb what it calls wasteful government spending. A spokesperson for the Department of Health and Human Services, which oversees the NIH, wrote in an email that the government has “increased funding available for cutting edge science and research by over $4 [billion] a year by taking dramatic action to reduce funding for administrative overhead,” but did not provide details on how or when that money could be spent.

The office did not immediately respond to a request for comment on the lawsuits.

Barker and her peers worry about long-term effects in their field as they navigate their own universities’ responses to the directive and await a final court decision.

“I work with a ton of really talented, really smart, resilient trainees who have the capacity to be leaders in addiction research, cognition, and cancer research,” Barker said. “Now they’re all under stress, wondering if there’s a future available to them in the field they’re working so hard for.”

At stake is millions of dollars for Philadelphia-area medical institutions and universities — money that supports everything from building construction and maintenance to data security and utilities. Salaries for staffers who support research efforts, such as people who oversee regulatory compliance, project managers, and administrative workers, are often paid for by indirect research funding from NIH.

The region’s top recipient of NIH funding, Penn, said the move would cost it $170.9 million during the remainder of this year. For the fiscal year starting July 1, Penn estimated that the change would cost it $240 million, if the cuts go through.

About 350 of 529 Penn staffers who support research and compliance could lose their jobs if the Trump administration cuts indirect funding, according to court filings. Another 2,296 facilities jobs and 1,742 administration jobs are supported by indirect funding, though it’s unclear if any of those staffers could also be laid off.

Penn is a co-plaintiff in a lawsuit brought by the Association of American Universities and other higher education organizations. The Association of American Medical Colleges is also suing. And the attorneys general in New Jersey and Delaware are part of a coalition of 22 states suing over the change.

Each institution negotiates with the federal government an “indirect cost” reimbursement rate based on a review of audited financial statements and expenses for running research programs. The NIH change would set a flat cap on the reimbursement rate at 15% — meaning for every dollar in research funding, an institution could get an additional 15 cents to cover “indirect costs.”

Most Philadelphia-area research institutions have contracts for much higher rates. The negotiated “indirect cost” reimbursement rate at Penn is 62.5%. Rutgers’ “indirect cost” reimbursement rate is 57%; it’s 58% at Temple. At Pennsylvania State University, indirect costs at the University Park campus are reimbursed at 58.4% and at 66.8% at its medical school.

“[The indirect fund system] is a weird patchwork — God knows why there isn’t one rate that applies to everyone,” said Nora Newcombe, a psychology professor at Temple University.

But 50% to 60% reimbursement rates are generally what’s needed to cover the cost of overhead expenses for research at most universities, she said. And the federal government has already negotiated the current rates and signed contracts with universities to fund them.

Drexel’s Barker said that indirect reimbursement rates are applied to specific line items in grant budgets, not a grant as a whole, and some line items are not associated with indirect costs. So while a university may have negotiated a high reimbursement rate, individual researchers might receive fewer indirect funds, depending on their grant’s budget.

In Barker’s grants, for example, indirect costs make up approximately 23% of the total grant because not all of the line items in the grant have indirect costs.

In the lawsuit filed by 22 state attorneys general, they noted that in 2018, Congress passed a law prohibiting NIH from deviating from negotiated rates that remains in effect.

The NIH has highlighted some universities’ multibillion dollar endowments, like those at Harvard University and Penn, in an apparent suggestion that those funds could cover the cuts. And some universities’ research has resulted in lucrative technologies: Penn has earned $1.6 billion in royalties from the Pfizer-BioNTech COVID-19 vaccine, made with mRNA technology developed by Penn scientists who at one point struggled to get federal funding for a concept that seemed like a dead end.

Other universities that receive research funding, especially smaller ones, do not have such large endowments.

Researchers say they’re worried that if the caps are upheld, federally funded research at the area’s major universities will grind to a halt. And, scientists say, research conducted in the private sector may not make up for losses at universities.

While many scientists enter academia to conduct long-term research without focusing on immediate profit, private corporations often rely on the basic research conducted at universities to develop profitable drugs and medical therapies, said David Vanness, a Penn State professor of health policy and administration.

“Research costs money, and it doesn’t always yield results right away. The industry does not want to take those risks,” he said. “Universities have done basic research because they have a public-facing mission: Their goal is to make the world a better place by increasing knowledge. We all share in that burden of paying for it because we all benefit from it.”

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Pennsylvania institutions are taking different approaches to responding to the potential cuts. Drexel has asked researchers to continue to budget indirect cost rates into forthcoming NIH grant proposals at the rate the university originally negotiated, according to an email obtained by The Inquirer.

Staff were asked to say in grant proposals that the university “requests our current federally negotiated rate, but we will accept the NIH approved rate at the time of the award.”

At Pennsylvania State University, researchers in the university’s College of Health and Human Development were initially told to stop submitting NIH grant proposals. After a judge temporarily blocked the cuts, the school is submitting grants again at its previously negotiated rates.

Several scientists who spoke to The Inquirer said they were particularly concerned about the effect the uncertainty around NIH funding, and a number of other Trump administration policies targeting health research, is having on early-career researchers. The swiftness of the proposed changes from the administration has been alarming, many say.

Nicole Rust, a Penn psychology professor and biomedical researcher, receives NIH funding to study therapies for memory loss. She also serves as director of graduate studies for Penn’s psychology program, which is in the process of interviewing its latest class of Ph.D. students.

“This introduces a lot of uncertainty — we can only admit individuals we know we can support, but if we don’t know what the future landscape of federal funding looks like, it’s very difficult to make decisions about who we can admit,” Rust said. “The threats alone are inhibiting science.”

Staff writer Harold Brubaker contributed.