Appeals court rules Trump administration cannot cap NIH overhead funding

A federal appeals court — the U.S. Court of Appeals for the First Circuit — ruled on Monday that the Trump administration could not make drastic cuts to funding distributed by the National Institutes of Health. In a unanimous decision, a three-judge panel upheld a lower court’s April judgment that the administration’s proposal to reduce pre-negotiated indirect cost rates for grants was unlawful.

The plan would have capped overhead reimbursements at 15 percent of a grant, while previously agreed rates often exceeded 30 or 40 percent. Hundreds of universities and hospitals had opposed the proposal, saying the cuts could cost them billions and jeopardize studies in areas such as cancer, genetics and infectious disease.

Judge Kermit V. Lipez, writing for the panel, said lawmakers had established a “carefully circumscribed procedure that controls any deviation” from negotiated funding rates and noted an earlier 2017 administration attempt to cap reimbursement at 10 percent had been rejected by Congress.

Three coalitions of universities, medical organizations and Democratic-led states sued in February, citing extensive harms, and court filings warned of paused clinical trials and the loss of veterinary technicians. A New York Times analysis cited in the case estimated roughly $9 billion of $32 billion in fiscal 2024 grant dollars had been set aside for overhead costs.

Key Topics

Politics, Nih, Trump Administration, Overhead Reimbursements, Universities, Clinical Trials