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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

AAMC Describes Consequences of Administration’s NIH Budget Request in Letter to OMB, HHS

June 23, 2017—AAMC President and CEO Darrell G. Kirch, MD, sent a June 16 letter to Secretary of Health and Human Services Thomas Price, MD, and Office of Management and Budget Director (OMB) Mick Mulvaney opposing the administration’s proposed $7.2 billion cut to the National Institutes of Health (NIH) in FY 2018 [see Washington Highlights, May 26].

The AAMC specifically highlighted how the administration’s proposal to reduce NIH facilities and administrative (F&A) support to 10 percent of NIH’s extramural research funding would jeopardize the viability of existing research programs, local economies, and the country’s global competitiveness. 

“Although also referred to as ‘indirect’ costs, F&A expenditures are directly related to and necessary for support of biomedical research at our member institutions – they are expenses that institutions incur because of the federal research they conduct,” the AAMC noted, while providing examples of expenses such as laboratory maintenance, data processing and storage, safety and security in use of chemicals and biologics that research institutions must provide in the performance of government sponsored research.

“Please make no mistake,” Dr. Kirch wrote, “a cut to F&A reimbursement is a cut to biomedical research.” The letter points out that allowable facilities and administrative charges are negotiated by academic institutions with strict federal auditing agencies based on actual records of real expenses incurred.  Additionally, the letter indicates that the current share of the NIH extramural budget spent for F&A reimbursements, approximately 27 percent, has not grown for more than a decade. The AAMC also noted that comparisons between federal F&A reimbursements and costs covered by private philanthropies and foundations are misleading, due to differing methodologies for accounting for costs related to research differing research missions and strategies between the two types of entities. 

The AAMC concluded, “A cap or flat rate could well have the unintended long-term consequences of consolidating remaining research programs into fewer institutions by making research costs prohibitive for smaller and geographically diverse academic medical centers…It could also discourage institutions from pursuing cutting-edge research requiring specialized facilities. Reduced F&A recovery would also result in layoffs and losses of skilled jobs, not because of gains in efficiency but from institutions cutting back on their research programs.”

Contact:

Tannaz Rasouli
Sr. Director, Public Policy & Strategic Outreach
Telephone: 202-828-0525
Email: trasouli@aamc.org

Stephen Heinig
Director, Science Policy
Telephone: 202-828-0488
Email: sheinig@aamc.org

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org