Jennifer W. Pegher, MA, MBA
Emily E. Stimmel, MA
Ongoing efforts to rein in government spending have been described as a “chainsaw for bureaucracy.” It’s an apt metaphor for the haphazard budget cuts that many federal agencies are still experiencing.
On February 7, 2025, the chainsaw made its way to facilities and administrative (F&A) costs, with the announcement that F&A—or “indirect”—cost rates would be cut and capped at 15% for all grants awarded by the National Institutes of Health (NIH). Alone, the cap on F&A cost rates would deal a major blow to our country’s cancer research infrastructure. Combined with ongoing layoffs and grant terminations across the NIH and National Cancer Institute (NCI), it could mean the end of cancer research as we know it.
In determining grant awards, the NIH covers both the direct costs of research, such as salaries for principal investigators and stipends for clinical study participants, and indirect costs. These indirect costs cover everything from rent, electricity, and Internet service to specialized laboratory equipment, temperature-controlled environments, and tissue banks. The grants also pay the salaries of key administrative, security, information technology, and custodial staff, who ensure regulatory compliance, protect patient privacy, and keep labs clean and safe. F&A costs are not wasteful, budgetary “fat” to trim; they are essential to driving research forward.
‘No Two Cancer Centers Are the Same’
Each year, the NIH awards more than 60,000 grants that directly support more than 300,000 researchers at over 2,500 different institutions. Contrary to stated goals, the proposed F&A changes would actually make cancer research less efficient and more expensive, due to the increased administrative burden of tracking indirect expenses for every grant, researcher, and institution. This is why F&A cost rates are negotiated between the NIH and individual institutions and are reevaluated periodically to account for inflation.
The late pediatric oncologist Joseph V. Simone, MD, famously quipped: “If you’ve seen one cancer center, you’ve seen one cancer center.” The U.S. cancer center program comprises institutions in red and blue states, rural and urban areas, with faculty and staff representing a broad range of specialties. Since no two cancer centers are the same, indirect cost rates vary by institution. For instance, a cancer center in New York City may require a higher indirect cost rate than one located in a rural midwestern community, simply because of differences in cost-of-living indicators, such as rent.
Based on the existing formula, indirect cost rates may represent anywhere from 10% to 80% of a grant. If a researcher working at a cancer center with a 50% indirect cost rate received a $100,000 grant from the NIH, the cancer center would receive an additional $50,000 to pay for indirect costs, for a total of $150,000. By contrast, with a 15% cap in place, that same grant would bring in $115,000, resulting in a $35,000 shortfall.
Incalculable Losses
Capping the F&A cost rate at 15% indicates a fundamental misunderstanding of how biomedical research is conducted. The actual costs of doing research won’t change. Instead, institutions will be forced to compensate for these losses in other areas of their budgets. We’re already seeing some of these changes play out in hiring freezes and layoffs at research universities and other institutions across the country.
A 15% cap would require cancer centers to divert resources from critical, life-saving research to day-to-day operations, ultimately reducing the overall volume of research output. Further, the cap applies to both new and existing grants, meaning the results of research that American taxpayers have already invested in may never see the light of day. No one can predict whether a terminated research grant or canceled clinical trial could have led to a major breakthrough or how many lives it could have saved. This incalculable loss is not worth the risk.
“Capping the F&A cost rate at 15% indicates a fundamental misunderstanding of how biomedical research is conducted.”— JENNIFER W. PEGHER, MA, MBA, AND EMILY E. STIMMEL, MA
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The NIH is the largest funder of medical research worldwide, described widely as the “crown jewel” of American biomedical research and by former NIH Director Francis S. Collins, MD, PhD, as “the main piston of a biomedical discovery engine that is the envy of the globe.” Shortsighted cuts to indirect cost rates threaten our long-standing position as a global leader in medical research and diminish our country’s ability to outpace foreign competitors in innovation and discovery. In the United States, sustained investments in the NIH and its 27 institutes—including the NCI—are a driving force behind positive outcomes in health and economic growth.
Advances supported by federal investments in the NIH and NCI have led to a 34% increase in cancer survival from 1991 to 2022.1 Furthermore, NIH- and NCI-supported screening and prevention efforts averted 4.75 million deaths from breast, cervical, colorectal, lung, and prostate cancers between 1975 and 2020.2
Despite decades of progress, cancer remains a formidable challenge. Half of all men and one-third of all women in the United States will be diagnosed with cancer in their lifetime—and more than 2 million Americans will receive a cancer diagnosis this year. Disruptions and cuts to cancer research funding waste precious time. For patients with cancer, these delays could mean the difference between life and death.
The Value of Investing in Biomedical Research
Recent data from United For Medical Research showed that every dollar invested in NIH research generates $2.56 in local and regional economic activity, supporting more than 400,000 jobs and contributing nearly $95 billion to the U.S. economy.3 Further, advances in prevention and early detection actually save money, as cancer diagnosed at later stages is two to four times more expensive to treat than the same cancer detected at an earlier stage.
“Disruptions and cuts to cancer research funding waste precious time. For patients with cancer, these delays could mean the difference between life and death.”— JENNIFER W. PEGHER, MA, MBA, AND EMILY E. STIMMEL, MA
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The value of investing in biomedical research has been recognized for decades, across party lines. Since President Richard Nixon and Congress passed the National Cancer Act in 1971, the federal government has played an integral role in the American cancer research ecosystem. Although strong bipartisan support of stable, predictable funding for the NIH and NCI has fortified the cancer center program for more than 50 years, indiscriminate funding cuts are decimating America’s cancer research infrastructure and stifling innovation.
The Silver Lining
But there is some good news. On March 5, 2025, U.S. District Court Judge Angel Kelley filed an injunction to block the 15% cap, highlighting the “risk to human life” resulting from suspended clinical trials and “the life, careers, and advancement that will be lost as these budgets are indiscriminately slashed.” There have been no attempts to appeal the injunction.
Additionally, Congress inserted language protecting the NIH’s funding levels, programmatic guidance, and existing F&A rates in the year-long continuing resolution bill that passed on March 15.
The Association of American Cancer Institutes (AACI) continues to monitor cuts to NIH and NCI funding and shares regular updates with our cancer center members. We appreciate all efforts to block the F&A costs cap and will continue to advocate for robust investments in the NIH and NCI.
Budget cuts must be made with care and consideration for how they will impact patients whose lives are depending on cancer research. This requires a steady hand and surgical precision—with a scalpel not a chainsaw.
DISCLOSURE: Ms. Pegher and Ms. Stimmel reported no conflicts of interest.
REFERENCES
1. American Cancer Society: Cancer Facts & Figures: 2025. Available at https://www.cancer.org/content/dam/cancer-org/research/cancer-facts-and-statistics/annual-cancer-facts-and-figures/2025/2025-cancer-facts-and-figures-acs.pdf. Accessed April 21, 2025.
2. Goodard KAB, Feuer EJ, Mandelblatt JS, et al: Estimation of cancer deaths averted from prevention, screening, and treatment efforts, 1975–2020. JAMA Oncol 11:162-167, 2025.
3. United for Medical Research: 2025 update: NIH’s Role in sustaining the U.S. economy. Available at https://www.unitedformedicalresearch.org/annual-economic-report/. Accessed April 21, 2025.
Ms. Pegher is Executive Director of the Association of American Cancer Institutes. Ms. Stimmel is Communications and External Relations Manager of the Association of American Cancer Institutes.
