US judge bars Trump administration from cutting NIH research funding

By Nate Raymond

BOSTON (Reuters) -A U.S. judge on Wednesday blocked President Donald Trump's administration from carrying out steep cuts to federal grant funding for research that universities and Democratic-led states warn would lead to layoffs, lab closures and a curtailment of scientific and medical studies.

U.S. District Judge Angel Kelley in Boston issued a nationwide injunction at the request of 22 Democratic state attorneys general, medical associations and universities that argue the National Institutes of Health's planned funding cuts were unlawful.

Kelley, an appointee of Democratic President Joe Biden, noted that the policy affects thousands of existing grants, totaling billions of dollars across all 50 states, calling it "a unilateral change over a weekend, without regard for on-going research and clinical trials."

This created an "imminent risk of halting life-saving clinical trials, disrupting the development of innovative medical research and treatment, and shuttering of research facilities, without regard for current patient care," she added.

The judge said those factors were why she temporarily blocked NIH from moving forward with the cuts on February 10, until she could hear arguments in the litigation. She later extended that order while considering whether to issue the injunction.

Massachusetts Attorney General Andrea Joy Campbell, a Democrat who helped lead the litigation, in a statement called Wednesday's decision "a major win for research institutions across the country."

The Trump administration is expected to appeal and has argued it acted within its discretion. The U.S. Department of Health and Human Services, which oversees NIH, declined to comment.

MULTIBILLION-DOLLAR ENDOWMENTS

The cuts are part of Trump's wide-ranging actions since returning to the presidency on January 20 aimed at slashing federal spending, downsizing the federal workforce, and dismantling large parts of the U.S. government.

The lawsuits were filed after NIH on February 7 announced it would be sharply reduce the rate at which it reimburses research institutions for "indirect costs" related to achieving a scientific project's goals, such as laboratory space, faculty, equipment and infrastructure.

The cases were brought by Democratic-led states, the Association of American Medical Colleges and groups representing public health schools and hospitals, and the Association of American Universities and several individual universities.

In announcing the policy change, NIH noted that Harvard, Yale and Johns Hopkins universities charged more than 60% for indirect costs despite having multibillion-dollar endowments.

Many other universities lack such sizeable endowments, and the plaintiffs said the policy would lead to widespread layoffs, laboratory closures and stalled clinical trials.

The Trump administration said it was capping the reimbursement rate for indirect costs at 15%, down from an average of about 27% to 28%. This would save the government $4 billion a year, NIH said in a post on social media platform X.

A U.S. Justice Department lawyer during a February 21 court hearing described that post as a "misunderstanding of what the guidance does," saying the money would not be saved but redirected to funding new research grants.

The NIH said it spent more than $35 billion in fiscal 2023 on grants awarded to researchers at more than 2,500 institutions. About $9 billion of that money went to covering overhead and institutions' indirect costs, the NIH said.

Kelley on Wednesday concluded that by adopting the sweeping cuts, NIH had run afoul of the law, citing language attached to funding legislation passed by Congress since 2018 that was designed "to restrict NIH's ability to enact an across-the-board rate reduction."

That language was adopted after Trump's first administration in 2017 proposed capping the indirect rate at 10%. Kelley said the 15% cap not only violated the law but failed to comply with regulatory mandates and was not sufficiently justified by the Trump administration.

(Reporting by Nate Raymond in Boston; Editing by Richard Chang, Alexia Garamfalvi and Bill Berkrot)