A threat to research for the public good

Update: A temporary restraining order was granted in the case of 22 states, including Wisconsin, filing suit against the NIH and its 15% funding cap on indirect costs. The court action blocks the changes. A hearing has been scheduled for Feb. 21.

The following message was shared with all employees, graduate students and postdoctoral researchers on Monday, Feb. 10.

Dear members of the UW–Madison community,

As you are likely aware, there have been a series of directives coming from the federal government in recent weeks, several that have significant impact on our campus.

Last Friday, the National Institutes of Health (NIH) announced a dramatic and immediate reduction in how it would provide funding to schools like UW–Madison for the expenses associated with doing grant-funded scientific and medical research. This announcement – which came Friday evening – is set to go into effect this afternoon.

For decades, the federal government and research universities have had a deep and extremely successful partnership to produce important research for the good of the nation. UW–Madison has long been a research powerhouse, and this effort is central to our purpose.

Work done here saves lives with innovations like cell therapies to treat cancer and heart attacks, improvements in medical imaging, and new treatments for diabetes. Our research enterprise is at the heart of the Wisconsin Idea, our commitment to innovating for the public good and doing work that makes a difference for Wisconsin and the world.

Federal funding has contributed to a wide variety of critical innovations and discoveries at UW–Madison, from weather satellites that save lives during natural disasters to the “UW Solution” that advanced the practice of organ transplantation by extending the viability of human organs. Today, campus researchers are leading a major national NIH grant to unlock the mysteries surrounding Alzheimer’s disease in a quest for better treatments, and ultimately, a cure.

As part of how the government provides funding, and how it has done so for decades, federal agencies like the NIH – most typically through highly competitive grant processes – allocate funding to individual projects and institutions. This funding supports direct expenses like staff salaries, graduate student stipends, and supplies. It also supports indirect costs, which include everything from large, shared scientific equipment, to laboratory and facility construction costs, data infrastructure costs, utilities, the costs of administering grants appropriately and the often-considerable expense of complying with federal rules and regulations surrounding research.

These so-called “indirect costs” aren’t optional expenses. They are both substantial and an absolutely fundamental part of innovative science. As is the case while running your household, you need both money to buy groceries (direct) and the financial resources to keep a working refrigerator and electricity (indirect) to store your milk and eggs.

The NIH proposed change is a dramatic reduction of the indirect cost recovery rate to 15 percent, for both new and existing grants. Previous rates – which can vary by university – are determined through a process where an institution demonstrates its actual expenses for doing science. Rates are revised every few years by the federal government based on a careful accounting and audit of expense data, as well as federal guidelines and policies. UW–Madison’s negotiated federal indirect rates for fiscal years 2024-2025 and 2025-2026 range from 26 to 55.5 percent depending on the nature and location of the work.

Impact of a rate cap

If the 15 percent rate goes into effect, it will in essence amount to a very significant cut to UW–Madison’s scientific research budget. It will harm our ability to conduct our vital research activity and to afford the necessary equipment and facilities. It will impact our ability to train the next generation of scientists and health care professionals, from undergraduate and doctoral students, to nurses, pharmacists, veterinarians and doctors. It will delay or even prevent the discovery of lifesaving treatments and cures.

Many treatments such as drugs and medical devices in use today originated through academic research that was later brought to market by companies that licensed the technologies. Reducing university research activity will impact commercialization and the so-called bench-to-bedside process.

The United States’ health research enterprise – and our scientific research enterprise more generally – has long been the envy of the globe. It is not an understatement to say that cuts of this magnitude will dramatically harm both our nation’s global stature and our economic competitiveness.

Legal action to challenge the NIH directive

A collection of state attorneys general, including Wisconsin’s attorney general, filed a lawsuit a short while ago in Massachusetts federal district court challenging Friday’s NIH directive. This legal action seeks a temporary restraining order to prevent the NIH directive from taking effect while the lawsuit proceeds to challenge the overall action taken by the federal government. As part of this legal challenge, UW–Madison provided information that describes some of the potential impacts on our campus.

We are hopeful that this challenge, as well as others that may be forthcoming, will be successful, as NIH’s proposed change would pose tremendous harm to our educational institutions and, even more critically, to the public who benefit from our research.

For updates as these legal cases proceed, please visit the Federal Relations website. You can also submit your feedback and questions at universityrelations@mailplus.wisc.edu.

We do not know how these legal actions will turn out, nor do we know what other threats will emerge to our research, teaching and public service missions. We recognize the importance of listening carefully to those who have concerns related to how universities operate, but we strongly reject the idea that a significant and sudden cut to our research funding serves our state, our nation, our university or the public good.

As we navigate this challenge and whatever may be to come, we commit to working tirelessly and collaboratively to make the best decisions we can to preserve our missions of research, teaching and public service.

Sincerely,

Chancellor Jennifer L. Mnookin

Provost Charles L. Isbell, Jr.

Vice Chancellor for Medical Affairs Robert N. Golden

Vice Chancellor for Research Dorota A. Grejner-Brzezinska