Attorneys general from 22 states filed a lawsuit on Monday against the Trump administration, challenging a plan to cap National Institutes of Health (NIH) payments that cover overhead costs at universities and medical research centers.
The lawsuit, filed in U.S. District Court in Massachusetts, argues that the proposed cuts could lead to layoffs, disrupt clinical trials, and force laboratories to shut down, jeopardizing critical medical research.
The plaintiffs include states with robust research economies, such as Massachusetts, North Carolina, Maryland, and California.
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They allege that the administration acted arbitrarily and capriciously by failing to provide a rationale for the cap and violating a 2018 law that prohibits the Department of Health and Human Services (HHS) and NIH from altering reimbursement rates for indirect costs associated with biomedical research.
The controversy stems from a recent NIH announcement that it would lower the indirect cost rate for grantees to no more than 15%. Indirect costs, which cover expenses like facility maintenance, utilities, and administrative support, are essential for universities and research institutions to conduct NIH-funded studies.
According to the NIH, 9 billion of the 35 billion awarded in fiscal year 2023 was allocated to overhead and administration rather than direct research.
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In their lawsuit, the states argue that the cap would have devastating consequences for medical research, including studies on cancer, diabetes, Alzheimer’s, addiction, and infectious diseases.
“The administration’s decision to cap NIH reimbursement rates could force scientists to shutter their lifesaving research,” said New York Attorney General Letitia James in a statement. “This reckless policy threatens to undermine decades of progress in medical science and public health.”
The University of California (UC), a leading recipient of NIH funding, has voiced strong support for the lawsuit. UC President Michael Drake warned that the cuts would be “catastrophic” for the university’s research efforts, leading to groundbreaking healthcare advancements.
“As the world’s leading public research institution, we depend on NIH funds to perform our vital mission. A cut this size is nothing short of catastrophic for countless Americans who depend on UC’s scientific advances to save lives and improve healthcare,” said Drake. “This is not only an attack on science, but on America’s health writ large. We must stand up against this harmful, misguided action.”
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The lawsuit seeks to freeze the implementation of the cap, arguing that it violates the 2018 21st Century Cures Act, which explicitly prohibits HHS and NIH from modifying indirect cost reimbursement rates.
The states also contend that the administration failed to follow proper procedures, including providing a justification for the policy change and allowing for public comment.
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