The Purchasing Power of the NIH Grant Continues to Erode

May 11, 2018

It has been some time since I made a figure depicting the erosion of the purchasing power of the NIH grant so this post is simply an excuse to update the figure.

In brief, the NIH modular budget system used for a lot of R01 awards limits the request to $250,000 in direct costs per year. A PI can ask for more but they have to use a more detailed budgeting process, and there are a bunch of reasons I’m not going to go into here that makes the “full-modular” a good starting point for discussion of the purchasing power of the typical NIH award.

The full modular limit was put in place at the inception of this system (i.e., for applications submitted after 6/1/1999) and has not been changed since. I’ve used the FY2001 as my starting point for the $250,000 and then adjusted it in two ways according to the year by year BRDPI* inflation numbers. The red bars indicate the reduction in purchasing power of a static $250,000 direct cost amount. The black bars indicate the amount the full-modular limit would have to be escalated year over year to retain the same purchasing power that $250,000 conferred in 2001.

(click to enlarge)

The executive summary is that the NIH would have to increase the modular limit to $450,000 $400,000** per year in direct costs for FY2018 in order for PIs to have the same purchasing power that came with a full-modular grant award in 2001.
*The BRDPI inflation numbers that I used can be downloaded from the NIH Office of Budget. The 2017 and 2018 numbers are projected.

**I blew it. The BRDPI spreadsheet actually projects inflation out to 2023 and I pulled the number from 2021 projection. The correct FY2018 equivalent is $413,020.

5 Responses to “The Purchasing Power of the NIH Grant Continues to Erode”

  1. Grumpy Says:

    Were most R01s modular back in the day? On the panels I’ve sat on in the last 2yrs, at least half of the R01s were asking for >300k/yr. Most were single PI.

    Of course plenty were cut down, but not all the way to 250k/yr.


  2. drugmonkey Says:

    I don’t know.

    My bet is that in 2000 there were many requests that didn’t even hit $250k*. As purchasing power eroded then these disappeared and more came in at the limit. More recently I would bet more people are going to traditional budgeting over the limit. And finally, I bet most of this is attributable to the erosion of purchasing power.

    *saw some credible data on this at one point but can’t recall where


  3. Jeremy Berg Says:

    The modular cap is also introducing other artifacts based on behavior of different institutes and centers. See I have not updated this to see if behavior persists (I think likely yes).


  4. Ola Says:

    Back in the day it was quite common to go below modular cap. Virtually all of my cohort did just that. The problem then became, if you went for competing renewal you couldn’t raise the budget by more than one module per funding cycle. So, if you started out in the late 90s with a budget of 200k as a new investigator, by the mid ’00s you could get 225k, and you couldn’t ask for full modular 250k until the late ’00s. By that time of course there were larger problems at hand…


  5. drugmonkey Says:

    I’ve never understood that “rule” used by some ICs. (I’ve heard it as “about 10%”, btw.) Particularly on first renewals.


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