States Band Together to Challenge New NIH Funding Policy
A recent decision by the National Institutes of Health (NIH) to implement a new funding policy has sparked a wave of legal action from several states. Led by a coalition of states that includes those won by Kamala Harris in 2024, as well as states with Democratic governors and attorneys general, the lawsuit aims to block the policy that could have far-reaching implications for research institutions across the country.
The crux of the issue lies in the NIH’s decision to alter the way indirect costs are calculated for research grants. Indirect costs are a crucial component of funding for research institutions, covering essential campus services such as those provided at research hospitals. The sudden reduction in these costs could lead to a significant budget shortfall, potentially forcing programs to shut down.
The states involved in the lawsuit have raised two primary concerns. First, they argue that the policy change will have a detrimental impact on research campuses within their states, jeopardizing vital services and programs. Second, they warn of a broader slowdown in biomedical research that could delay the development of treatments for their citizens.
Legal Challenges and Allegations
Central to the states’ legal challenge is the assertion that the new NIH policy effectively rewrites existing contracts with research institutions. By applying the policy retroactively to grants already in progress, the states argue that the NIH is overstepping its authority and violating established legal principles.
Moreover, the states contend that the policy change runs afoul of the Administrative Procedures Act, which outlines the procedures that agencies must follow when implementing formal rules. The states argue that the lack of transparency and consultation in setting the new indirect rate cap of 15 percent constitutes a breach of the Act’s provisions, as agencies are required to avoid making arbitrary and capricious decisions.
In their lawsuit, the states highlight the absence of a solid rationale for the 15 percent cap on indirect costs. They argue that the NIH failed to provide a sufficient justification for this arbitrary rate, neglecting to consider the impact on grant recipients who rely on negotiated rates and disregarding the factual basis for existing indirect cost rates.
Implications for Research Institutions
The legal battle over the NIH funding policy has broader implications for research institutions nationwide. If the policy goes into effect as planned, institutions in the states involved in the lawsuit could face significant financial challenges, potentially leading to cutbacks in critical services and research programs.
Experts in the field of biomedical research warn that the policy change could have a chilling effect on innovation and scientific progress. Delays in funding and increased financial uncertainty could stifle research projects, hampering the development of new treatments and therapies for a wide range of diseases and conditions.
As the legal battle unfolds, researchers, administrators, and policymakers are closely watching the outcome, aware of the potential impact on the future of biomedical research in the United States. The stakes are high, with the outcome of the lawsuit likely to shape the landscape of research funding and support for years to come.
