I am writing as part of the leadership of the University of California, Los Angeles (UCLA), one of the nation’s premier universities engaged in research, scholarship and innovation for the benefit of society. UCLA is ranked among the leading research universities worldwide in fields ranging from medicine to engineering to humanities to arts and sciences and everything in between.
Beyond basic research, UCLA is extraordinarily engaged in the translation of its basic research for the benefit of our nation and for widespread economic development. Significantly, UCLA was recently ranked Number 1 in the nation in the number of startup companies launched as a result of campus research, according to the rankings by the Milken Institute, an independent economic think tank. UCLA’s long-standing research activities have had an extraordinary impact on science, technology and economic development in our country.
I am writing to you at this time to express our deep concerns about the proposed funding cut to research sponsored by the National Institutes of Health (NIH) described in the Administration’s FY 2018 budget. We are especially concerned about the proposed 10-percent cap on facilities and administrative (F&A) cost reimbursements to universities on NIH grants and the significant misunderstanding that appears to underlie that proposal.
Universities and the federal government have a long-standing and successful partnership. The federal government relies on universities to conduct research in the national interest. Universities have developed the infrastructure that is essential to perform this research. Reimbursement of the costs of the infrastructure that makes government-funded research possible is fundamental to our continued ability to perform vital research and is a basic principle of our enduring partnership.
NIH research has been foundational to the United States’ leadership in biomedical advances, ranging from treatments for cancer to neurodegenerative disease to cardiovascular disease to infant and child developmental challenges.
The cutting-edge research performed over many decades at UCLA and many other research universities could not have been possible without focused, competitive research grants from the NIH. Advances at UCLA that are leading to, or have already led to, the development of precision medicine for personalized medical treatment, cancer immunotherapy for late stage cancers, therapy for autism spectrum disorders, and many other high-impact discoveries could not have taken place without the long-term support by the NIH.
Such a severe reduction in funding for the NIH could have devastating consequences for the future of biomedical research in the United States, a significant reduction in the “seed corn” that is so vital to our future health and prosperity in this great nation.
The proposed reduction in F&A cost reimbursement for NIH grants to 10% is, if possible, of even greater concern to us because of a misinterpretation of what F&A represents for universities. In fact, an F&A reduction of any magnitude would have severe consequences for our university and others. Universities negotiate with the federal government, and have for many decades, in determining the costs that they incur to enable research to be conducted, both in terms of research facilities (laboratories, space for animal studies, computational and diagnostic equipment, and the like) and the administrative staff required to manage the research (including fund management, laboratory safety, chemical waste disposal, compliance with increasing federal requirements for research safety and integrity, and a host of other areas). Universities like UCLA receive F&A as a reimbursement for costs already incurred, and our current rate of 55% is well below our actual costs associated with doing research (which lie between 60 and 65%). Our university, like others, has been subsidizing the difference between actual costs incurred in the performance in research and our federal F&A rate in order to enable this cutting edge research to continue and to impact society in meaningful ways. Indeed, when research is performed in industry, the F&A costs are considerably higher, often exceeding 100%.
As you know from communications from the Association of American Universities (AAU), Council on Government Relations (COGR), and other organizations, the flexibility that foundations such as the Gates Foundation allow in charging certain items within “direct costs” is not possible within the current federal funding mechanism. Not only would it be difficult for the NIH to implement a change to this kind of model, it is highly unlikely to result in any significant cost savings. Thus, the proposed significant reduction in research funding for the NIH should be viewed as a true cut, not one that is modulated in any way by alterations in F&A rules.
Our leadership at UCLA would welcome the opportunity to communicate with you further on the cutting-edge research in which our campus is engaged, especially in NIH-supported fields. We trust that you will thoughtfully reconsider the proposed funding cuts and F&A cap in light of the information that we and others have provided to you.
Gene D. Block
This letter was sent to U.S. Department of Health and Human Services Secretary Thomas Price and White House Office of Management & Budget Director Mick Mulvaney. Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies Senators Roy Blunt (Chair) and Patty Murray (Ranking Member), and Representatives Tom Cole (Chair) and Rosa DeLauro (Ranking member), were cc’ed.