A federal judge will continue to temporarily block the National Institutes of Health’s plan to slash its payment of research expenses incurred by universities on the grants they’ve received from the agency.
Friday’s decision by Judge Angel Kelley in the U.S. District Court of Massachusetts allows her previously issued temporary restraining order to stay in place until she makes a permanent decision on the proposed change, according to STAT, which first reported the news.
Judge Kelley had initially granted a temporary restraining order against the funding limit after a group of 22 state attorneys general filed a lawsuit challenging the cap. While her order in that case applied the TRO only to the 22 states bringing suit, she expanded it nationwide on February 10 in response to another legal challenge by higher education organizations and a dozen research universities seeking to halt the cut.
In additon, several medical associations filed a third lawsuit in the same federal court challenging the legality of the NIH Rate Change Notice.
The plaintiffs in all three cases offered similar legal arguments against the cap. They alleged that the NIH Rate Change Notice was arbitrary and capricious, violated the Continuing Appropriations Act of FY 2024, and was inconsistent with regulations regarding both how NIH is to calculate indirect cost rates and change those rates on existing grants.
They asserted they would suffer several harms from the cap, including the ending of clinical trials, damaging research institutions’ research capacity, depriving patients of clinical care, allowing research facilities and equipment to deteriorate, and forcing institutions to lay off researchers and support personnel, “a loss of human capital that can never be fully replaced.”
NIH has denied those claims, arguing that the TRO should not have been continued because the plaintiffs had failed to prove they will suffer any irreparable harm before the case could be decided on it merits. It maintained the cap was a rational action, that it had violated no laws and that the federal district court lacked jurisdiction over the case.
NIH also argued that the plaintiffs had failed to show that any impacts were “imminent as opposed to eventual reductions,” and that money saved from the cap could be used to fund more grants, a statement inconsistent with earlier social media claims that the policy change would save the federal government as much as $4 billion “effective immediately.”
The judge’s decision comes just two weeks after NIH announced it would cap reimbursement for indirect costs incurred on university research at 15%, about half of the 28% it said was the average rate in recent years. Many universities, however, have negotiated indirect cost reimbursement rates exceeding 50%.
Indirect costs — also known as facilities and administrative (F&A) costs — include several kinds of overhead expenses universities must bear when their investigators conduct research. They include items like maintenance of equipment, facility upgrades, the operation of labs, depreciation, utility charges, support staff, accounting, research compliance, legal expenses, and the salaries of key administrators who oversee an institution’s research programs.
The 15% cap would reduce billions in funding for universities and the larger biomedical research community. NIH is a major source of grants for university research on disease diagnosis and treatment, medical technology, drug and vaccine development, and disease prevention.
According to Inside Higher Education, the agency awarded about $26 billion to more than 500 grants to universities in FY 2024. About $7 billion of that was used to cover indirect expenses. About 83% of NIH’s $48 billion budget is awarded for extramural research, mostly through competitive, peer-reviewed grants to researchers at thousands of universities, medical schools, and other research institutions.
Judge Kelley’s decision extending the block against the reimbursement cap gives health researchers a short reprieve, but how the administration will respond to it is in doubt. NIH remains deeply engulfed in turmoil and confusion. Most of its grant-review meetings are still suspended because the administration is using a loophole to stop the agency from taking a step necessary to schedule them.
According to Nature, Trump administrators have barred NIH officials from posting the advance notices in the Federal Register that are required to schedule grant-review sessions. As a result, even though the administration rescinded its January 27 freeze on federal grants and loans after it faced legal challenges, the awarding of new grants has been effectively stymied.
In addition, the NIH workforce is being gutted. More than 1,000 employees have been terminated recently, part of a larger government purge that’s hit other federal health agencies such as the CDC and FDA. Many of the fired NIH staffers were responsible for reviewing and overseeing the extramural grants the agency awards to research universities and academic health centers. Their dismissal further erodes the ability of NIH to evaluate, administer and monitor its extramural portfolio, and it imperils a key component of the nation’s entire biomedical research enterprise.
So while the judge’s order comes as a bit of good news at least for now, larger questions about the future of medical research under the Trump administration remain. How much long-term damage will NIH suffer as a result of the administration’s chainsaw strategy? Is the harm to its research mission irreparable? And most importantly, how many Americans could eventually see their health compromised or their lives endangered as a consequence of what’s being done to the agency.