UT Southwestern Medical Center could lose $100M annually if NIH cuts take effect: report
The University of Texas Southwestern Medical Center in Dallas could lose up to $100 million annually if a new rate cut proposed by the National Institutes of Health goes into effect, according to a report from Stat News.
The NIH on Friday announced changes to how it would reimburse research institutions for their indirect research costs. Effectively, the rule would limit how the NIH reimburses research institutions, like UT Southwestern, for indirect costs related to medical research, but not the cost of the medical research itself. Indirect research costs, also referred to as facilities and administrative costs, are those expenses that are not related to a specific research grant, but instead pay for the costs of keeping a large research lab up and running.
In a memo, the NIH wrote that it was important to “ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead.”
But leaders of research institutions said the funding for indirect costs was essential to the research work also being done.
Daniel Podolsky, the president of the University of Texas Southwestern Medical Center, said in an email to the UT Southwestern community that the rate change would likely cause a loss of $100 million annually for the institution, Stat News reported.
“We greatly appreciate the support we receive from the Texas Legislature and the Office of the Texas Governor. However, even these advantages cannot offset a reduction of this magnitude,” Podolsky wrote. “The most significant long-term impact will be on our patients who depend on the discoveries made in our institution and others.”
In a statement, leaders of the Association of American Medical Colleges said the rate cuts would slow scientific research and progress.
“Make no mistake. This announcement will mean less research,” the group’s President and CEO Dr. David Skorton and Chief Scientific Office Dr. Elena Fuentes-Afflick wrote in the statement. “Lights in labs nationwide will literally go out. Researchers and staff will lose their jobs.”
The rate cuts are scheduled to go into effect on Monday. Also Monday, a group of attorneys general representing 22 states filed a lawsuit to block the proposal.
This story was originally published February 10, 2025 at 12:59 PM.
