A federal judge extended an emergency restraining order Friday against the National Institutes of Health, temporarily preventing the agency from making massive cuts to indirect research funding.
The restraining order bars NIH from implementing a 15% cap on indirect cost reimbursement and requires the agency to file regular status reports confirming disbursement of funds. U.S. District Judge Angel Kelley, a Biden appointee, is considering a more permanent injunction against NIH’s plan after nearly two hours of oral arguments Friday.
NIH unveiled the new policy earlier in February. Historically, institutions negotiate their own indirect cost reimbursement rates with the agency, with an average of 27% to 28%. The change was met swiftly with multiple lawsuits, including by higher education groups and 22 state attorneys general. The cases were considered together at the hearing Friday.
Several universities have already frozen hiring and taken other budgetary measures amid the NIH funding uncertainty, despite Kelley’s initial pause on the funding cap.
The funding for indirect costs — also known as facilities and administrative, or F&A, costs — covers a wide array of staffing and infrastructure for research activity.
“Indirect costs are the backbone of IHEs [institutions of higher education] research programs and cover everything from utilities to facilities and equipment maintenance to payroll for faculty and staff to compliance programs, hazardous waste disposal, and more,” 22 state attorneys general said in their original request for a temporary restraining order on NIH. “They quite literally keep the lights on.”
Brian Lea, an attorney for NIH, said at Friday’s hearing that money saved by cutting and capping F&A funding would be “ploughed into” funding for research costs. However, in a Feb. 7 post from the agency on the social media site X, NIH said the funding cap “will save more than $4B a year effective immediately.”
Asked by Kelley about the post, Lea said that it was “at best a misunderstanding” of NIH’s guidance.
Plaintiffs attorneys argued that the F&A cap violates federal laws and regulations, pointing out that Congress passed an appropriations bill during President Donald Trump’s first term that prohibits modifications to NIH’s indirect cost funding.
Lea maintained that NIH’s guidance was compliant with regulations and statutes and within the “broad discretionary power of the executive branch” to allocate funding.
Attorneys for the plaintiffs further argued that an injunction was necessary to prevent “immediate and irreparable” harm, pointing to numerous universities that have detailed how their research, budgets and infrastructure would suffer from the cap. An official at Yale University, for example, said in court papers that the NIH rate cap could threaten the viability of many of its ongoing clinical trials for medical research.
“It is not hyperbole to say that, absent immediate injunctive relief, Plaintiff States’ IHEs will face catastrophic financial consequences, which could result in layoffs and furloughs, research program closures, financial defaults, and disruptions to clinical trials, potentially jeopardizing people’s lives and health,” the attorneys general said in their motion, filed earlier in February.
Lea questioned whether harms such as funding losses were irreparable, suggesting that they could be undone later through private funding or operational adjustments.
As the case winds on, NIH has laid off more than 1,000 employees, according to press reports.
