Skip to main contentThe Trump administration’s plans to cut funding from the National Institutes of Health to research universities would be “devastating” to Oregon Health & Science University, interim president Steve Stadum wrote in an email to staff on Saturday.
The NIH issued “supplemental guidance” to its grants policy late on Friday, saying that it planned to slash the amount of money awarded for “indirect costs” like office space and maintenance to 15% of every grant.
Institutions negotiate that percentage, and OHSU’s rate has been 56%. That means that for every $100,00O that OHSU gets from NIH to pay for researchers' salaries, office space and supplies, it gets an additional $56,000 for indirect costs. At the new rate, OHSU would get just $15,000.
“Though there is reason to believe this action is prohibited by law, a reduction of this magnitude—should it take effect—would be devastating to OHSU and other universities, hospitals and research institutes across the U.S. engaged in scientific research," Stadum wrote.
The NIH cuts could force job cuts at OHSU, Portland’s largest employer, just when Intel Corp. and Nike Inc. are slashing payrolls in the city’s western suburbs. They could also weaken OHSU’s balance sheet as it seeks regulatory approval to buy Legacy Health. That deal is expected to cost $1 billion, OHSU has said, cash that it plans to raise by selling bonds backed by its financial performance.
“It’s a shit show,“ says Dr. Jeff Jensen, vice chair of research in obstetrics and gynecology at the OHSU School of Medicine. “But it’s that way by intention. They are doing it to destabilize everyone who didn’t vote for them. People will lose jobs.”
OHSU got $277 million from the NIH last year, Stadum said. At the 56% matching rate, about $177 million of that figure went to direct costs, and about $100 million came in for indirect ones. At 15%, grants for indirect costs would bring in just $27 million, a loss of about $73 million.
“Even at 56%, indirect costs do not cover the full cost of supporting each research grant,” Stadum wrote.
In its announcement, the NIH said the average indirect cost rate was about 28%. “And many organizations are much higher—charging indirect rates of over 50% and in some cases over 60%," the agency said.
OHSU’s press department didn’t immediately return an email seeking comment on the matter.
OHSU has set up an “incident command structure” like one it operated during the COVID-19 pandemic, Stadum wrote, to evaluate and respond to policy changes that come down from the Trump administration and its Department of Government Efficiency, run by car-and-rocket billionaire Elon Musk.
“The team has already convened regarding this issue and will be sharing more guidance throughout the coming weeks,” Stadum wrote.
The Trump administration says it chose 15% for indirect costs because many of the largest foundations fund indirect costs at that rate or below. According to a chart in NIH’s Friday announcement, the Carnegie Corporation of New York and the Chan Zuckerberg Initiative both have 15% maximum indirect costs rates. The Gates Foundation gives 10% for universities, its website says.
“The United States should have the best medical research in the world,” the NIH wrote on Friday. “It is accordingly vital to ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead.”
Musk and Trump have been on a cost-cutting bender since taking office. Under Musk, DOGE has tried to shut down the U.S. Agency for International Development, which provides money for fighting diseases like Ebola and elephantiasis, and repairing obstetric fistulas that can occur in childbirth.
The NIH spent $35 billion on 50,000 competitive grants in the 2023 fiscal year, the agency said in its Friday missive. About $26 billion went to direct costs for research, while $9 billion was allocated to overhead, it said.
In a post on social media platform X, the NIH said the change would save $4 billion a year. Musk reposted the NIH’s, writing: “Can you believe that universities with tens of billions in endowments were siphoning off 60% of research award money for ‘overhead’?”
Republicans have for years questioned the indirect rate, while researchers assert that it costs money to do everything from keeping the lights on to dealing with privacy issues in human trials.
“The consequences of the new guidance are scary for all of us who take pride in our tripartite mission of research, education and patient care, but particularly so for those directly involved in research,“ Stadum wrote to OHSU staff. ”At this time, there is no action for researchers or other OHSU members to take in response to the NIH guidance. We are working as quickly as possible to understand the legal effect of the guidance and will share more as we are able."
U.S. Sen. Patty Murray (D-Wash.), vice chair of the Senate Appropriations Committee, lambasted Trump and Musk for the cuts.
“Sick kids may not get the treatment they need,” Murray said in a statement. “Clinical trials may be shut down abruptly with dangerous consequences. Just because Elon Musk doesn’t understand indirect costs doesn’t mean Americans should have to pay the price with their lives.”