NIH cuts could deal a blow to the Triangle and North Carolina's economy
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The Old Well at UNC-Chapel Hill. Photo: Sean Rayford/Getty Images
Potential changes to how the National Institutes of Health funds medical research could sap hundreds of millions of dollars from the Triangle's economy, prompting widespread concern from leaders in the area.
- But so far, the changes have been stopped by a U.S. District Court judge after 22 states — including North Carolina — sued.
Why it matters: Last Friday, the NIH issued a memo that said the agency would begin capping how much it grants for "indirect costs" at 15%, down from an average of 28%, as part of an effort to cut government spending, CBS News reported.
- A cut that deep could lead to significant funding reductions for some of the region's largest employers, like UNC-Chapel Hill and Duke University.
Zoom in: Indirect costs — which come in addition to the direct payments for research — include expenses like paying for facility maintenance, administration costs and shared lab staffing.
- UNC's negotiated indirect cost rate was 55% for example, and UNC ($531 million in 2024), Duke ($580 million) and RTI International ($397 million) receive hundreds of millions of dollars in NIH funding every year.
Driving the news: The temporary restraining order on the changes initially only applied to research institutions in states that joined the lawsuit, which included the top five states for NIH funding: Massachusetts, California, New York, Maryland and North Carolina.
- The pause has since been expanded to the rest of the country, per the NYT.
- "This attempt to slash funding for research awards that have already been granted violates the law and would cost North Carolina's public universities hundreds of millions of dollars every year going forward," N.C. Attorney General Jeff Jackson said in a statement.
- That win comes as a bill filed in the N.C. General Assembly last week would bar Jackson from challenging any executive orders from the President, WRAL reported.
What they're saying: Penny Gordon-Larsen, UNC's vice chancellor for research, wrote in a letter to university researchers last Friday that the NIH's potential change would have "a significant and negative impact" on UNC-Chapel Hill.
- "[A] change of this nature would yield significant negative impacts to Carolina — and all NIH grant-funded organizations — as [indirect costs] supports the federally required regulatory and compliance functions, the costs to administer grants, and costs of the facilities and infrastructure required to support research," Gordon-Larsen wrote.
- Holden Thorp, a former chancellor at UNC-Chapel Hill, told The News & Observer the funding cut would cause "massive layoffs across the Triangle if this (rule) holds."
- Dr. Robert Lefkowitz, a Nobel laureate in chemistry and a Duke University professor of medicine, told The New York Times that the indirect funds are critical to maintaining labs and buying equipment.
- "I think the American people need to understand how devastating it would be if this goes through," Lefkowitz said. "A lot of research would just have to stop; I can't imagine that the shortfall could be met from other sources."
The other side: The U.S. should have the best medical research in the world, the NIH said in a memo. It is therefore "vital to ensure that as many funds as possible go towards direct scientific research costs" rather than administrative overhead costs, the memo continued.
What's next: A court hearing on the NIH's potential cuts is set for Feb. 21.
- UNC System President Hans said in a statement in response that federal investments contribute significantly to the state's economy and quality of life.
- "I'm hopeful this will ultimately produce a healthy conversation about the benefits of university research to America's competitiveness while ensuring accountability to the taxpayers," he said.
Editor's note: We've updated this story with details about the nationwide expansion of the funding freeze pause.