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.
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.