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One Sunday in January, biologist Mark Peifer, a professor at the University of North Carolina’s medical school, got a call from campus police. Rising temperatures in a malfunctioning cold room at his lab had tripped an alarm. Materials he needed for his work—which has furthered the understanding and treatment of colorectal cancer—were in danger of being compromised.
He was able to get the cold room repaired that same day, and had the funding to do so, so the disruption was minimized. But now Peifer is concerned about the stability of that funding, which comes from the National Institutes of Health. His grants cover equipment and supplies directly related to his research. But the work takes place in shared research buildings and requires other, shared equipment and staff efforts—which is why, for every dollar he gets from the NIH, his institution gets an additional 55 cents in “indirect funding.”
That money is what paid to fix the cold room. It also goes toward his building’s HVAC, electricity, and sanitation, and pays for Peifer’s research assistants and the accountants who keep track of his grants.
“It’s incredible to me that we would give up this thing that has such obvious societal benefits.”
At least, it used to. On February 7, the NIH announced a 15 percent cap on indirect costs—an allowance that previously has averaged about 30 percent across the nation. For UNC, it meant a 40 percent research funding cut. The indirect rate, negotiated between the government and a given institution, is based on local and regional costs and various other factors.
Peifer and other researchers I interviewed say cuts of this magnitude will be devastating. “If my lab closes down, it will mean 10 people no longer have a job,” he says, and these are people “who live in my community, pay rent, go to the grocery store.” If they stand, the reductions will create roadblocks for fledgling scientists, he says, because in many cases undergraduates will “no longer have an opportunity to engage in research.”
“It will end biomedical research in the county. That that’s what it really comes down,” Peifer says, noting that even facilities doing private biomedical and pharmaceutical research depend on public funding and the discoveries that result from it.
On February 10, almost two dozen Democratic state attorneys general sued the Trump administration over the NIH directive, citing “immediate and devastating” effects. A federal judge quickly granted a temporary restraining order covering the 22 states in question.
“A lawsuit like this about grant funding is unusual,” says Don Kettl, a professor emeritus and former dean at the University of Maryland School of Public Policy. “But it’s become increasingly common for state attorneys general to join together to challenge policies.”
Kettl argues that the NIH directive, which upends decades of federal science policy, violates federal law: “Assertion of an Executive Branch power to cut or eliminate grants runs right into the teeth of the Impoundment Control Act.”
The directive noted that private funders of biomedical research, such as the Chan Zuckerberg Initiative and the Packard Foundation, offer grantee institutions 15 percent or less for indirect costs, and said the federal government should not exceed those rates. But the government is by far the largest funder of such work, and its citizens benefit broadly, economically and in terms of medical innovations, from a thriving, publicly funded research infrastructure.
The NIH has existed for more than a century in the form of national labs and institutes, and to characterize the work it funds as “lifesaving” is not hyperbole, Peifer explains. Although cancer now vies with heart disease as America’s leading cause of death, “we have cancer death rates down 30 percent in the last 30 years,” he says, and “we’ve gotten even better at treating heart disease.”
The NIH cuts are part of a ham-fisted effort by the Trump administration to gut federal spending while rooting out “wokeness.” Capping indirect costs will save the $4 billion, the administration claims, but it’s easy to read between the lines. The NIH announcement cites a Heritage Foundation report titled, “Indirect Costs: How Taxpayers Subsidize University Nonsense,” which asserts that every 1 percent increase in indirect costs leads to two more “DEI employees.”
“The economics…would be dramatically different. New facilities would go unbuilt, private industries would suffer, and scientific support staff would be laid off. “
Indeed, the impetus for the cap may have come from Heritage staffer Lindsey Burke, who, in her chapter of the Project 2025 manifesto, writes that “these [indirect] reimbursements cross-subsidize leftist agendas and the research of billion-dollar organizations such as Google and the Ford Foundation. Universities also use this influx of cash to pay for Diversity, Equity, and Inclusion (DEI) efforts.”
The cost-saving claims don’t hold up, in any case. Every dollar in NIH research grants generates $2.46 in economic activity, research shows—a total of $93 billion in 2023 alone. “It’s incredible to me that we would give up this thing that has such obvious societal benefits,” Peifer says.
The research is a key driver of private sector innovation. The $1.7 trillion US biotech industry was built on a century of government-funded discoveries at universities and research institutes. “Those developments that biotech firms and pharma put into practice come from NIH and NSF research,” Peifer says. And NIH-funded academic and private labs fuel the roughly $57 billion US market for sophisticated scientific tools and equipment.
Peifer lives in North Carolina’s Research Triangle, which is home to Duke, North Carolina State, and UNC-Chapel Hill. Because the area is a biomedical research hub, biotech, pharma, and equipment firms have a strong presence in the area—an estimated 4,000 tech companies and 600 life science companies. “They will be devastated,” Peifer predicts.
Peifer is eager to dispel the myth that slashing NIH funding is merely a matter of concern for academic scientist in their ivory towers. “There are so many working class jobs on the line: millions employed in the support industries,” he says.
Peifer himself was raised in working-class family, he told me. His dad often worked two jobs, including driving a forklift for General Motors. He wouldn’t be where he is today, he says, if not for publicly funded science. “We’re giving kids an opportunity to do something that their parents maybe didn’t have an opportunity to do. Do we really want to throw that away?”
Peifer and Kettl concede that there’s room for differing views on how research funding should be allocated. “There is a legitimate question about just how indirect costs should be calculated, but the costs are never the same between two institutions,” Kettl says. Notes Peifer: “If you want to build a building in Boston, it’s a whole lot more expensive than if you want to build a building in Birmingham, Alabama.”
The problem is that the administration’s blunt-force tactics, Kettle says, amount to “a clumsy effort to cut federal spending” that “is sure to stifle research and undermine the economy, with untold consequences down the line.”
On Wednesday, after nearly two weeks of ignoring two court orders instructing federal agencies to unfreeze any funds they were withholding, NIH officials finally relented. The online news outlet Popular Information reported that an internal NIH memo had authorized staff to resume payments, including indirect funds in excess of the 15 percent cap. The memo confirmed that the NIH had been aware of the court orders. One of its authors, Michael Lauer, has since left the NIH.
The administration is weakening science in other ways, too. On Friday, senior administrators at the NIH and CDC were informed that more than 5,000 probationary employees, those employed for less than two years, are set to be fired as part of widespread reductions across the government. “It’s an irreversible blow to the one of the most important engines of American science and an indication that this is a war to destroy biomedical research,” Peifer said in an e-mail after the news dropped. “I am not sure how I’ll be able to sleep tonight.”
For now, if his cold room breaks, Peifer will follow UNC’s directives and use indirect funds to fix, noting in the work order that he is adhering to previously negotiated agreements. But if the 15 percent cap is allowed to go forward, everything changes.
“The economics of research would be dramatically different,” Kettl says. “New facilities would go unbuilt, private industries would suffer, and scientific support staff would be laid off. “The inevitable result,” he says, “would be less research.”
Already, Peifer’s undergraduates applying to PhD programs can’t be sure those programs will continue to exist in their present state, and post-doctoral researchers may end up with fewer opportunities to hone their skills. More broadly, research and development into surgical techniques and treatments for cancer and other deadly diseases could slow down significantly.
It won’t be scientists like him who are hurt the most, Peifer says. Rather it will be “the people who could have had a new treatment for a devastating disease and don’t have it.”
Update: This article has been updated to refer to postdoctoral researchers, rather than postdoctoral students.
