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Pennington Biomedical warns NIH overhead cut will slash research margins, force program slowdowns
Summary
Pennington Biomedical researchers told the committee a recent NIH change to allowable indirect/overhead rates for grants reduces institutional recovery from 50% to 15%, creating a projected $2 million hit this fiscal year and $5 million next year that could slow research and training programs
Pennington Biomedical Research Center leaders told the House Appropriations Committee that a sudden federal change to allowable indirect‑cost recovery on NIH grants is creating an immediate budget hole for their institution.
Dr. (name as given in transcript) Kerwin, Pennington’s executive leadership, said the NIH policy change cut the institution’s institutional overhead recovery rate from roughly 50% down to 15% on affected awards. "The implications of that for Pennington in the fiscal year that we're currently in is $2,000,000. Next year, that would be $5,000,000," he told the committee.
Why it matters: Pennington is a major research center for nutrition and chronic‑disease research. Leaders said the reduced overhead recovery threatens support for ongoing research programs, laboratory operations and training resources — including graduate students who are typically supported through grant budgets.
Details from committee testimony: - Dr. Kerwin said roughly 70% of Pennington’s research revenue is NIH funding; the overhead change is therefore material to operating capacity. - He said a $2 million reduction in the current fiscal year and $5 million next fiscal year would force the research enterprise to slow some activity and could reduce the center’s ability to recruit and retain research staff. - Pennington leaders said they are pursuing other federal partners (Department of Defense, NASA, other program lines) and have begun adjusting internal plans, but the near‑term impact is significant.
Committee reaction: Lawmakers expressed concern that shifts in federal policy are having disproportionate consequences for state research assets and asked Pennington to provide a list of grants and projected earnings at risk. Members asked how reductions might affect statewide priorities such as childhood obesity research and clinical translational programs.
Ending: Pennington urged continued state engagement with the congressional delegation and requested briefing materials on the specific grants and the dollar exposures so the committee could consider mitigation options during the FY26 budget negotiations.
