The purpose of this post is to try to bring a teeny bit of clarity to the roiling landscape of biomedical research, healthcare, and public health in the U.S. This isn’t about outrage or blame or anything like that. I’m just hoping to highlight some things that I think are important to know about in the present moment, offer my thoughts on why they’re important to know about, and offer some ideas on what people and institutions do with the information. I’ll focus on things related to the NIH and the Dept of Health and Human Services, though if there are goings-on in other sectors that are likely to have a big impact on biomedical research and public health, I’ll go there.
SUPER DUPER IMPORTANT CAVEAT: Though I am a former federal employee and will look at things through that lens, I am not currently a federal employee. The golden rule is always this: TALK TO YOUR POINT OF CONTACT – your program officer, contracting official, whomever is appropriate. Talk to them early and as often as it takes. And if you’re not sure who that is, press pause right now and go do some digging. When appropriate here, I’ll offer thoughts on who the right POC might be for a specific thing. But there’s no substitute for up-to-date information coming straight from the people tasked with implementing policies, EOs, random tweets, whatever.
This week we’ll tackle a brand spankin’ new policy that dropped literally a couple of hours before I started writing this (such is the way these days). This one is interesting because it’s tempting to think it’s all upside, but I’m not so sure about that. Let’s talk about NOT-OD-26-019 – “Updated Application Policies: NIH Administrative Burden Reduction Effort – Removal of Requirements for Letters of Intent and Unsolicited Applications Requesting $500,000 or More in Direct Costs.” The Notice itself can be found here: https://grants.nih.gov/grants/guide/notice-files/NOT-OD-26-019.html
Here’s the topline points for this one:
Letters of Intent aren’t a thing for NIH anymore. They won’t be required, requested, accepted, acknowledged, reviewed, or considered.
If you’re submitting an application with over $500,000 in direct costs in any one budget period, you don’t have to have permission to submit anymore. No notification of the target IC, no conversation with a Program Officer, none of that. Let ‘er rip.
Let’s take the LOI bullet first. This change is probably a bigger deal for NIH staff than it is for extramural investigators. Up until today, some Notices of Funding Opportunity (hereafter, NOFOs) either required or encouraged submission of a Letter of Intent. It definitely wasn’t the majority of NOFOs, and it often was encouraged rather than required. Typically LOIs were requested to be submitted some number of days before the corresponding application due date. There were a few reasons that ICs would request LOIs ahead of application submissions.
The main reason for requesting LOIs was so that NIH staff could plan appropriately for the workload that would come with the review process. An IC plans differently for an anticipated workload of 20 applications than for 200 applications, and though not perfect, LOI submissions are often a reasonable indicator of response rate for full applications. Rigorous peer review requires a good match between the expertise of the review group members and the research topics represented in the applications. LOIs can help ensure a good fit between review group members and likely application topics. Additionally, rigorous peer review means managing conflicts of interest (which gets more complicated the more applications you have), and LOIs can help get a preview of the kinds of conflicts that might exist and can allow for a jumpstart to mitigating those conflicts. Finally, LOIs can help ICs more intelligently and effectively budget for likely future award commitments (much more on this point in the next part).
As NOT-OD-26-019 notes, because NIH has centralized all peer review processes and activities, it is no longer the purview of the individual ICs to plan review activities. So, no need for LOIs. From the standpoint of investigators and institutions, this probably does make life easier. It will remain to be seen how much additional difficulty this will create for NIH staff, mainly the review staff in the Center for Scientific Review. My very fuzzy guess would be that the impact of this change won’t be huge, particularly relative to the other changes that have happened this year or even in the second part of this Notice. I don’t think the disappearance of LOIs will be the straw that breaks any particular camel’s back.
I feel differently about the removal of the requirement for permission to submit applications with over $500K in direct costs in any one budget year (hereafter, > $500K applications). Before proceeding, it’s important to note that the > $500K policy and its repeal are only really applicable to grant types that don’t already have a designated budget limit. For instance, you still aren’t allowed to propose a budget of eleventy billion dollars for your R21, as the current NOFO (e.g., https://grants.nih.gov/grants/guide/pa-files/PA-25-306.html ) caps the budget you can request at $275K in combined direct costs for a 2 year project period, with no more than $200K requested in any single project year.
A Bit of History (I Promise It’s Relevant)
First, let’s review the state of play from roughly October 6, 2001 until a few hours ago. If you were planning to submit an unsolicited application that was going to include more than $500K in direct costs (that is, excluding consortium F&A costs, otherwise known as indirect costs or indirects) in any one budget period (typically one year), you had to speak with the Program Officer at the IC to which you were planning to submit at least six weeks prior to submission. Further, you had to be able to document that the IC had approved the submission. If you didn’t include that documentation, the application could be withdrawn without review. Details on the general policy and process can be found here: https://www.era.nih.gov/erahelp/commons/commons/prior_approval%20module/500K_Request.htm Each IC also had processes for how they implemented the policy, and those processes were typically described on the IC website.
It is likely obvious to you why things were done this way, but let’s break it down. If you’re writing a grant application that has $500K per year in direct costs for 5 years, that’s a commitment of $2.5 million. Even if we ignore indirect cost commitments (which are calculated as a percentage of direct costs), that’s a lot of money for one grant. Now remember that though your grant is budgeted for 5 years, the IC that might be funding your grant is only funded one year at a time. The years after the first one are called out-years, and as you can imagine, these are a major feature of an IC’s budget spreadsheet. While technically each grant is only funded one year at a time (that’s why you submit progress reports and why a new NoA is issued for each year of the project), the Antideficiency Act still needs to be mentioned real quick here.
All the way back in 1884, Congress realized that if the U.S. Government said they were gonna pay for something, it was really important that it get paid for. The Antideficiency Act ensconced this principle in law. It is illegal for any part of the U.S. Government to incur financial obligations or undertake expenditures in excess of duly appropriated funds. The NIH isn’t allowed to spend money or to commit money that it doesn’t have. If that happens, penalties can be levied on the agency and even on individual employees. It’s a big deal.
So, by awarding grants a year at a time, it’s a little easier to avoid violating the Antideficiency Act. HOWEVER, it gets much harder to manage if an IC hasn’t kept close tabs on their very large grants, contracts, cooperative agreements, etc. To keep things hunky dory, an IC needs to have some insight into what their appropriated budget is likely to be in a fiscal year, and what their existing financial commitments are likely to be. Here’s where those out-years come in. Those are commitments that exist before the first penny of a new fiscal year’s budget arrives. In other words, on October 1 (or whenever Congress actually passes one or more appropriations bills), a huge chunk of an IC’s budget is already spoken for. The more grants that have out-year costs of $500K or more, the more of the budget that is already spoken for, and the less that will be available for other stuff.
Imagine you’re the one tasked with planning this budget. You’d not only want to know how many of these super sized applications you’re on the hook for, but you’d also maybe want to be able to limit the number of new ones that come in for consideration this year. Being able to say “no, you can’t submit this application with that big budget right now” allows an IC to manage their budget proactively and allows peer review to have a greater weight for the big budget grants that are allowed to come in for consideration.
As of a few hours ago, this is no longer the case. NOT-OD-26-019 is interesting in that it is effective immediately and applied to all existing NOFOs that require use of the > $500K processes. It’s a global retcon, something that was a bit unusual prior to 2025.
Possible Impacts
From the investigator’s perspective, it might be tempting to think this is a great thing. And in some ways it is great. If you’re doing a clinical trial, you very likely are going to be in big budget territory. This policy change has immediately reduced the amount of work you have to do just to hit “submit” on your application. Yay! The policy change could also introduce some good flexibility in the grant preparation process. Rather than thinking, “Is it worth going through the > $500K process, or do I just pinch and fiddle to get under the $500K threshold?” (we used to call these applications “499 specials” and there are a lot of them), investigators can now optimally match proposed budget to proposed science. If the science justifies a big budget request, the level of difficulty is no greater to submit than for a more modestly budgeted application.
BUT…
This policy change raises all sorts of questions for me. Here’s just a few:
Does budget now play a bigger role in IC funding decisions, given the disappearance of paylines and the other features discussed in the new NIH unified funding framework?
With investigators now effectively having no process-based disincentive to proposing very large budgets, how will ICs balance funding decisions and budget implications throughout a given year?
Do lots more big budget grants increase the likelihood that political interests and motivations will lean in to encourage, say, “geographic balance” (vis a vis Congressional districts hintedy-hint-hint)?
If multiyear funding becomes a bigger part of NIH’s funding strategy, how would this interact with the newly unconstrained proposed budgets and the impact on ICs’ budgets and budget planning?
Of course I don’t truly know the answers to these questions. And though I could make guesses, I think the most important thing is to have questions like these in mind and to keep close eyes on how this policy change plays out. And that’s a really nice segue to…
What Can We Do?
1. Keep your eyes open. Watch closely what happens to proposed budgets, the budgets of funded grants, correlations between things like budget size and funding success, where big budget grants end up going geographically and institutionally, all those sorts of things. This would be a great time for the most skilled data analysis wizards you know to refamiliarize themselves with NIH RePORTER and the kinds of things one can pull from it.
2. Be sensible. Just because you’re allowed to propose whatever size budget you want now for your R01s, that doesn’t mean go hog wild. Propose what the science truly needs. Justify it with the impact of the proposed work. Bigger budgets will need bigger justification. Resist the temptation of budget bloat just because it’s easier now than it was a couple days ago. Remember, we still don’t know how budget will now figure in to funding decisions, and we don’t know what kinds of budget modifications/haircuts will become more common under the unified funding framework.
3. Talk to your Program Officer. Just because you don’t have to talk to your PO to get permission before you submit a big ticket proposal, that doesn’t mean you aren’t allowed to or that you shouldn’t. You most definitely should. If your proposal scores well, your PO is likely going to have to play a central role in providing the justification for the IC deciding to fund your grant. Again, bigger budgets mean bigger justification. In addition, it might not be a bad idea to try to help out the ICs by providing them information for their budget planning purposes.
4. Talk to your institutional officials. You have to do this anyway to some degree for any grant, but it’s especially important for big budget grants. This allows for more informed budget planning on the institution side as well. It also allows for informed communications outward from the institution regarding what grant budgets are looking like, how they’re changing, success rates, all that stuff. I will tell you that elected officials haven’t previously paid super close attention to grants like R01s or U01s or even P01s. But they definitely pay attention to things like CTSA awards and CCC awards and other big ticket awards coming into their states/districts.
5. Expect at least short-term turbulence. ICs will be scrambling to figure out how to modify their existing processes to accommodate this change that happened honestly kind of out of nowhere. Their budget officials are likely sweating. And remember, we are still under a continuing resolution that ends on January 30, 2026 if there isn’t an enacted appropriations act by then. Pretty much everything is operating against stable budgeting models at the ICs right now, so the captain has definitely turned on the fasten seatbelt sign.
But hey, it’s only money, right?
Further Reading:
https://grants.nih.gov/grants/guide/notice-files/NOT-OD-26-019.html
https://www.era.nih.gov/erahelp/commons/commons/prior_approval%20module/500K_Request.htm
https://www.congress.gov/bill/119th-congress/house-bill/5371