Of the $22.5 billion the NIH spent to support research In 2013, more than $5.7 billion was for indirect costs. Universities, nonprofits and hospitals received $3.9 billion, $611 million and $550 million, respectively, of this amount. Indirect costs are not linked to any specific project and are often for administrative and facilities expenses. The costs are a percentage of the direct costs of the research, with institutions’ rates negotiated individually. Rates range from 20% to 103%. While the average negotiated rate was 53%, on average, institutes actually received 34% due to caps and restrictions placed by the NIH. The Council on Governmental Relations stated that the NIH cap on administrative costs results in a shortfall of funds compared to actual expenses. Regulations slated to become effective in December might change the limits on rates of indirect costs.

Source: Nature