Grants paid by the federal government have two components. One covers the direct costs of performing the research, paying for salaries, equipment, and consumables like chemicals or enzymes. But the government also pays what are called indirect costs. These go to the universities and research institutes, covering the costs of providing and maintaining the lab space, heat and electricity, administrative and HR functions, and more.

These indirect costs are negotiated with each research institution and average close to 30 percent of the amount awarded for the research. Some institutions see indirect rates as high as half the value of the grant.

On Friday, the National Institutes of Health (NIH) announced that negotiated rates were ending. Every existing grant, and all those funded in the future, will see the indirect cost rate set to just 15 percent. With no warning and no time to adjust to the change in policy, this will prove catastrophic for the budget of nearly every biomedical research institution.