Dean's Corner
Dear Colleagues,
As many of you know, the shifting federal funding landscape is bringing some uncertainty that may have implications for the Health Sciences Center and the School of Medicine. We first want to emphasize the word “may” and we also assure you that we will work to minimize any impacts on our school. We are engaged with LSU system leadership, and we are working with state and federal officials to inform them about the impact of these potential changes on our school, on the patients in our State and region, and on the Louisiana economy. We also want to stress that no matter the ultimate outcome, we remain steadfast in our mission and commitment to research.
Currently, there are two significant directives that could impact our ongoing work and our federal grant funding. Both are the subject of national litigation, and each has been temporarily halted by the judiciary, pending further legal review. The first is the recent Executive Order (EO) 14173 (Ending Illegal Discrimination and Restoring Merit-Based Opportunity) which directed many federal agencies to review grants for certain language. The Health Sciences Center and School of Medicine are proud of our history and commitment to improving health equity for the people of our city, state, and region. Some of our federal grants specifically address health equity by expanding access to state-of-the-art care for disadvantaged populations, and this important work may be threatened by this executive order.
The second directive that may have an impact on our federal grant funding is the February 7th NIH Grants Policy Statement on Indirect Cost Rates, which announced an immediate 15% cap on Facilities & Administration (F&A) rates on research grants to universities. F&A funds support the infrastructure that is needed for biomedical research conducted on behalf of the federal government in the national interest. Indirect costs support expenses associated with laboratory space and utilities, equipment, secure data storage, support personnel, regulatory requirements associated with human subjects, biosafety requirements, radiation safety and hazardous waste disposal, and so much more. LSUHSC’s negotiated F&A rate of 50% is regularly validated by a federal audit, and is renegotiated every several years based upon our demonstrated actual costs. Clearly, a lower F&A rate will result in the loss of millions of dollars for the school and health sciences center, and an immediate reduction will have immediate impacts. Some of the arguments used to justify this proposed rate cut include comparisons to funding from private foundations (such as the Gates Foundation) which pay lower F&A rates. These foundations, however, demand that universities accept a lower rate precisely because the federal government is helping support the vital biomedical research infrastructure. Another argument used to justify the rate cut is that F&A rates are much lower in other research sectors (such as IT research). However, biomedical research requires more expensive infrastructure due to the safety requirements for work with biological materials, and the regulatory requirements for human subjects research.
We are proud to be the premier health sciences center that supplies health care workers as well as basic, translational, and clinical biomedical research for the State of Louisiana. We seek to engage everyone in the sciences through STEM pipeline programs that aim to build a stronger research and clinical workforce. We are communicating the measurable and immeasurable benefits of our activities and programs to state and federal leaders.
We will continue to monitor these developments closely and keep you informed of any changes. We are actively working to ensure that government officials know about the good work that we do and the potential adverse impact on our mission and operations of these directives. We have instructed our researchers to continue working on grant submissions and to use our previously negotiated F&A rate until further notice. Should you happen to receive any communication from a federal funding agency regarding the status of your grant, please inform us as soon as possible.
In the meantime, while we actively work to address these challenges, we always remain true to our mission of educating tomorrow’s healthcare providers and scientists, advancing the boundaries of biomedical science, and caring for the patients of our community and the region.
With gratitude for your work to advance our mission,
Richard DiCarlo, MD
Dean, LSUHSC School of Medicine
Steve Nelson, MD
Chancellor, LSU Health Sciences Center
PS – There is a wealth of information available at our fingertips. The AAMC has some basic information on F&A rates https://www.aamc.org/media/81711/download?attachment, on foundation supported research versus government supported research https://www.aamc.org/media/81721/download?attachment, and F&A rates in different research sectors https://www.aamc.org/media/81716/download?attachment. This link provides a high level view of the impact of NIH funded research overall and by State: https://www.unitedformedicalresearch.org/wp-content/uploads/2024/03/UMR-NIHs-Role-in-Sustaining-the-US-Economy-2024-Update.pdf.