Scientific Vendor Contracts: Who Really Benefits?

In 2024, the National Institutes of Health (NIH), the largest funder of biomedical research in the United States, had a budget of $47 billion. A significant portion of this, approximately $37.4 billion, is distributed as grants to research institutions through the NIH’s extramural program. These grants support Principal Investigators (PIs) at these institutions and include both direct and indirect costs.

• Direct costs cover the essentials of research—salaries, reagents, equipment, and services.

• Indirect costs go to the institution for overhead, such as utilities, building maintenance, and administrative support.

To simplify procurement and secure favorable pricing, many institutions sign exclusive contracts or maintain preferred-supplier lists with major vendors like Fisher Scientific and VWR. In exchange, vendors may offer perks like on-campus stockrooms, dedicated customer service, and discounted pricing on certain items. Recent examples include agreements between Fisher Scientific and the University of California and the University of Pittsburgh.

In practice, this means that researchers are expected—or required—to purchase supplies through these vendors. When institutions enter into exclusive contracts, they effectively hand over pricing power to corporations that then profit from the direct costs of research grants.

This paints a troubling picture: institutions collect indirect costs, vendors extract value from direct costs, and researchers are left with limited flexibility in how they spend grant money. Are these arrangements designed to advance science—or to enrich institutions and corporations?

In future posts, we’ll take a closer look at these contracts and explore who really benefits.