Will the NIH indirect cost cap stick?
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Background On February 7, 2025, the NIH announced a new policy capping indirect costs (facilities and administrative costs) at 15% of total costs for all grants, effective February 10, 2025. This represents a significant change from the previous system where indirect cost rates were negotiated individually with institutions, often ranging from 30-70%. The policy affects both new grants and existing grants moving forward.

Resolution Criteria

  • Resolves NO if:

    • A court permanently overturns the indirect cost cap

    • The administration reverses the policy

    • Any other action that effectively reverts the policy to its original state

    • The market creator determines the issue appears definitively resolved

  • Resolves YES if by December 31st, 2026:

    • The original 15% cap remains in effect

    • A similar policy that effectively eliminates >15% of total funding for research costs is in place and appears permanent

    • Note: A congressional budget cut of ≥15% to NIH funding would not count as a similar policy

The market creator will be the final arbiter for any ambiguous situations and will not participate in trading.

Considerations

  • Research institutions have historically opposed similar proposals through lobbying and negotiations

  • Legal challenges or legislative actions could potentially emerge

  • The policy's implementation may face practical challenges from research institutions that depend on higher indirect cost rates

  • Clinical research and trials may be particularly impacted by this cap

  • Previous attempts to implement similar policies have been reversed due to institutional pressure

  • Update 2025-02-09 (PST) (AI summary of creator comment): Ambiguity in Resolution:

    • The resolution will be based on the de facto reality of funding at the time the issue is determined to be settled.

    • The market creator will decide when the outcome is definitively settled.

  • Update 2025-02-09 (PST) (AI summary of creator comment): Total Effective Budget Focus

    • The market will now resolve based on the total effective budget, defined as the actual funding available for research after accounting for the cap.

    • The 15% indirect cap is clarified to amount to roughly a 25% reduction in the total effective budget.

    • The resolution will remain YES even if the indirect cost cap is adjusted upward (for example, to 20%), as long as the reduction in the total effective budget is reduced by more than 15%.

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What if items from both the YES and NO resolution lists happen? Like the courts overturn the cap, but the administration does something else to reduce funding by 15%?

@Jwags The question will resolve according to the de facto reality of the funding, and only when I believe it has been settled. So in that case it would resolve YES.

@Balasar Thanks. And if what if the total amount of funding remains within 85% of its current value, but the amount spend on overhead drops to <15% of that value or lower? (sorry if this is pedantic, but I'm getting confused by the market title and some criteria talking about indirect costs, and other criteria and your comment below referring to reductions in total budget. Those two values can change independently of each other. It would kinda make the most sense to me to remove all mention of total budget and look only at indirect costs)

@Jwags yes, sorry for the confusion, the 15% indirect cap amounts to a ~25% reduction in the total effective budget. The total effective budget is what this question cares about. I've set it this way so the cap going up a bit (say to 20%) would still allow this question to resolve YES, but I see the confusion in both numbers being 15%. Hopefully this clarifies things. I think the AI-generated writing of this made it more confusing than necessary.

@Balasar The reason I wrote it this way was to exclude cases where the indirect cost cap exists but is so high as to be irrelevant.

bought Ṁ50 NO

@creator If they change the cap to be at a higher level than 15% (say 30%) and that sticks, how would this resolve?

@DanielTilkin If it effectively eliminated 15% of NIH funding then it would resolve YES.

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