Planned funding cuts by the National Institutes of Health’s, the United States’ leading medical research agency, could impact Alabama health care, jobs and future medical breakthroughs.

On Friday, the NIH said it would make immediate cuts to indirect research costs, which support institutional overhead. The announcement sent researchers into a panic over the weekend.

“I literally have 5 months before I retire from UAB. I’m deeply saddened for so many of my colleagues and friends. This will definitely take a toll on research,” Montreal Billups commented on a Facebook post about the news Saturday.

In 2024, the University of Alabama at Birmingham was in the top 1% of all NIH-funded institutions, including private, public and international organizations. And all six of UAB’s health-related schools were in the top 15 public universities in NIH funding in FY 2022.

AL.com reached out to UAB and HudsonAlpha, a biotechnology institution in Huntsville, but has not yet received a response as of Sunday morning. Other organizations that receive NIH funding, including Southern Research and the University of South Alabama, told the Alabama Reflector Saturday that they were monitoring the issue.

1. What is NIH funding used for?

The institutes said on Friday that they spent about $35 billion in 2023 on about 50,000 competitive grants to about 300,000 researchers at 2,500 universities, medical schools and other research institutions nationwide. Of that, about

• $26 billion directly funded research and
• $9 billion covered indirect costs.

NIH grants in Alabama in 2023 alone supported 4,769 jobs with an economic impact of $909 million statewide, according to United for Health.

NIH funds go toward clinical trials, data analytics, community engagement, research workforce and programs in dermatology, urology, pediatrics, gynecology, optometry, dentistry and public health.

The University of Alabama at Birmingham, Alabama’s largest public employer, with over 28,000 employees, has received more than a billion dollars in NIH funding in recent years and relied heavily on those and other federal grants, AL.com’s John Archibald reports.

2. What are indirect research costs? How is the money used?

Research costs money. When universities and research institutions get grants, many ask for an additional percentage on top to support overhead for facilities, support staff and more.

Institutions typically group expenses in two main buckets:

• Direct research costs, like scientists’ salaries and lab equipment, and
• Indirect research costs, sometimes called facilities and administrative costs, which cover everything from keeping the lights on in the building to paying an administrator to submit and track grants.

Indirect research costs can also pay for graduate student salaries, custodial services, building security, data entry and more. It depends on the grant and institutional policies.

Individual institutions negotiate IRC rates with federal agencies. Some universities, such as Harvard, charge as much as 69%, according to reporting by STAT.

According to UAB’s website, on-campus research supported by federal grants asks for nearly 50% on top to cover indirect research costs.

Starting Monday, the NIH will drop that rate to 15% for new and existing grants across all institutions.

A rough estimate of the impact: In 2024 the federal government might send $150,000 to an institution recently awarded a $100,000 grant. That covers the grant itself, and the 50% IRC. In 2025, that institution would get $115,000.

Universities also say that a lot of their research costs don’t get reimbursed, and that they have been paying more in recent years to support research and development.

3. How would Alabama be affected by NIH cuts?

NIH grants support medical institutions and research across the state.

Recent NIH grants awarded to UAB include support for the STEM workforce, studying cardiovascular and kidney diseases, HIV education, and a Type 2 diabetes clinical trial.

HudsonAlpha researchers have been awarded NIH grants for training, pediatric rare disease research and dementia research.

Auburn University at Montgomery recently was awarded NIH funds to enhance STEM, biomedical research and diversity.

Auburn University, Tuskegee University and Alabama State University also are listed as recent recipients of NIH funding.

4. What is the argument for and against cutting NIH funding?

President Donald Trump’s administration argues that universities, especially those with large endowments, should cover overhead costs with their own money.

The NIH decision also comes amid conservative pushback to federal agencies’ health and research priorities, according to recent reporting by ProPublica. The new administration wants to cut federal expenditures overall, streamline the amount of departments within agencies like the NIH and update the processes for research grants.

Birmingham Mayor Randall Woodfin said Saturday that funding cuts would hurt UAB’s ability to save lives and potentially stifle technological and economic growth in Birmingham and beyond that not only makes us healthier.

5. What happens next?

Funding cuts are scheduled for Monday, unless the administration reverses course or is ordered to stop by courts.

U.S. Sen. Katie Britt said she will work with President Donald Trump’s health secretary nominee Robert F. Kennedy, Jr., who would oversee the NIH, to “ensure our nation remains at the forefront of medical innovation, research, and patient care.”

Britt said the Trump administration wants “the United States to lead the world in innovation and achieve the impossible,” AL.com’s Scott Turner reports.