A federal judge will hear arguments on Friday in the first hearing on three separate lawsuits filed to block the Trump administration’s plan to sharply cut the amount the National Institutes of Health pays universities and other research institutions for overhead costs.
The suits were filed in rapid succession in the days after the NIH announced on Feb. 7 that it would cap so-called indirect costs at a 15% rate as of Feb. 10, leading the judge to issue a temporary restraining order that placed a nationwide pause on the measure.
At the Friday hearing, Judge Angel Kelley of the U.S. District Court in Boston will hear arguments from lawyers for the plaintiffs and the Trump administration to decide whether to maintain the stay on the Trump administration’s cap while the cases proceed. While the suits have not been consolidated, they are being heard together because they are making similar legal arguments.
Nervous researchers will be eager for any indication of where the judge is leaning, and if she will uphold the pause on this measure — which could lead to the cutting of at least $4 billion from research grants, according to the administration. Indirect costs, also known as facilities and administrative costs, are expenses of conducting research that would be hard to itemize directly to a specific lab, such as utilities, rent, and the costs of shared lab equipment.
“You can see the gravity of that pronouncement based on how quickly, and the scope of the lawsuits that were filed basically within the 48, 60 hours of that guidance being issued,” said Hannah Bornstein, a lawyer for Nixon Peabody who is tracking the case.
The Trump administration, which responded to the suits in documents posted on Feb. 14, is arguing that the restraining order should be lifted while the case proceeds for three reasons. First, it says the district court isn’t the right venue to decide the matter, and instead it should be handled in the Court of Federal Claims “because Plaintiffs are effectively seeking damages for breach of contract — the regulations incorporated into their grant agreements.” It also argues that in issuing the new guidance, the NIH “acted in accordance with the governing regulations,” and that the plaintiffs have not shown that without a restraining order they would suffer “irreparable injury.”
What are indirect research costs? A quick explainer in light of NIH’s sweeping policy change
The plaintiffs are arguing that the indirect cost cap was not implemented in line with NIH’s own regulations and runs counter to laws passed by Congress to prevent such a measure. They also say that allowing the 15% cap to proceed would cause “irreparable harm.”
The first of the three suits was filed by the attorneys general of 22 states, which was followed by another suit by the Association of American Medical Colleges and associations representing pharmacy and public health schools, as well as hospitals, and a third by the Association of American Universities and a number of individual universities.
The initial suit led to a pause on the indirect cost cap in only the 22 states that sued, but the judge expanded the restraining order nationally following the filing of the AAMC case. “The plaintiffs, those who are suing the federal government, want to maintain some sort of injunctive relief, meaning keeping that from going into effect,” said Heather Pierce, senior director for science policy and regulatory counsel at the AAMC.
Researchers across the country — including scientists in states that voted for President Trump such as North Carolina, Texas, and Alabama — have also raised alarm about the NIH policy’s potential consequences in an open letter that has garnered more than 1,000 signatories within 48 hours.
“If the proposed cuts are enacted, America’s biomedical research is likely to stall. Jobs will be lost, new biomedical companies will not be started, clinical trials will be canceled, and life-saving discoveries that patients and families depend on will never be made,” the letter reads. “Our nation’s global leadership in biomedical research and entrepreneurship will be weakened, allowing countries like China to gain a competitive research edge over the United States.”
Pierce and Bornstein said the line of questioning and the tone of the judge may provide hints to how she might ultimately rule. But Bernstein noted the potential for indirect costs to be slashed won’t end with this case.
“These lawsuits are one piece of the puzzle,” she said. “These rates by and large, they’re negotiated on an annual basis. So what’s going to happen when the 2026 indirect cost rate negotiations come up?”
Jonathan Wosen contributed reporting.
