An executive order that briefly went into effect Monday capped National Institutes of Health awards at 15% for indirect costs would have meant a loss of more than $3.1 million to local institutions of higher education if that order had been in place last year.
A federal judge temporarily blocked the change for universities in 22 states a few hours after it took effect, but the order doesn’t include Texas because it did not join the other states in the legal challenge. Universities and researchers have expressed grave concerns about its possible impact on important biomedical research.
The University of Texas at El Paso told El Paso Matters that its researchers would continue to work on its NIH grants as it monitors the situation. Ahmad Itani, vice president for Research & Innovation, provided more information in a message to UTEP colleagues.
He said that the research landscape will continue to evolve between executive orders and court rulings and uncertainties will continue in the near future. He understands the anxiety of faculty researchers about how these changes could affect them and their research teams.
“Unless we receive specific instruction to halt work or modify the scope of an award, it remains both your responsibility and UTEP’s to meet our commitments,” Itani wrote in the email, which was shared with El Paso Matters by a person who asked not to be identified.
He wrote that his office was ready to offer guidance and support as needed in regard to changes to their grants, and is developing strategies to ensure the university can support its researchers “should other funding agencies implement similar policies.”
According to data from the NIH RePorter, UTEP had direct costs of $11.7 million for grant projects in fiscal year 2024, and $4.4 million in indirect costs, which involve facilities and administration. That would be about 37% of the direct costs, which would go for the likes of personnel, supplies, travel and equipment.
If the 15% cap was in place, the indirect costs would have been about $1.8 million. That would have been $2.6 million less for UTEP.
As for Texas Tech Health El Paso, in fiscal year 2024, it had NIH grants with direct costs of $1.6 million and indirect costs of almost $760,000. If the proposed NIH policy had been in effect last year, TTHEP would have received about $522,000 less. TTHEP did not respond to requests for comment.
El Paso Community College had a project in the last fiscal year with direct costs of about $248,000 and indirect costs of more than $14,000, or less than 6%. That means that project would not have been affected.
As of now, the NIH has 73 active grants in the Paso del Norte region worth $33 million over several years, mostly at UTEP and TTHEP. The amount includes about $10 million in indirect costs. If the cap had been in place, the region could have lost as much as $6 million.
The TTHEP projects include a new tuberculosis vaccine, research on blood cell development and a nasal spray flu vaccine for children. Among the UTEP projects were ones that involved the studies of dementia, drug addiction and efforts to address Hispanic health disparities.
The NIH released its directive Friday, Feb. 7. The order’s goal is to spend more of its funds on research and not administrative costs. The agency reported that $9 billion of the $35 billion granted for research was used for administrative overhead.
The 15% is still above what many major private foundations, such as the Gates Foundation (10%) and the Robert Wood Johnson Foundation (12%) allow and much lower than the 60% that some institutions negotiate with the government. The NIH believes that this change could save more than $4 billion annually.
UTEP and TTHEP representatives did not respond to a question about why there would be such a big discrepancy between allowable indirect costs between government and private philanthropic grants.
The attorneys general of 22 states — all Democrats — filed a lawsuit in Massachusetts federal court to block the change, saying it would cause harm to institution budgets, jeopardize basic operations and certain medical research. The judge’s order late Monday temporarily blocked the change in indirect costs in the states who were party to the suit.
It wasn’t clear Monday if NIH would created different indirect cost policies for states who are party to the lawsuit and those that weren’t while the judge’s order is in effect.
In their lawsuit, which was filed against the NIH and its parent agency, the Department of Health and Human Services, the attorneys general asked the court to declare the policy illegal, and issue a temporary restraining order and preliminary injunction to prevent federal agencies from executing the policy in their states, which include Nevada, New Mexico, Arizona, Colorado and California.
If the new indirect costs cap becomes law, an analysis of 2024 NIH funding data shows that Texas would lose a little more than $310 million.
6:55 p.m. Monday, Feb. 10. This story was updated to clarify that a judge’s order temporarily blocking a change in indirect support costs for National Institutes of Health grantees applies only in the 22 states that challenged the action.
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