REGIONAL- Yet another federal judge has stepped in to halt the Trump administration’s rush to slash the federal budget, this time blocking a change that would devastate medical research in Minnesota and across the country.
A federal judge in Massachusetts on Monday issued a temporary restraining order blocking the administration’s move to immediately withhold millions of dollars in indirect cost reimbursements for medical research funded by the National Institutes of Health (NIH). The decision comes after Minnesota and 21 other states filed a lawsuit arguing that the cuts would devastate critical research efforts nationwide, including those at the University of Minnesota and the Mayo Clinic.
The cuts, announced on Friday and to have been implemented Monday, would put a cap on the NIH’s reimbursement for indirect costs – expenses such as laboratory maintenance, IT support, and administrative oversight – to 15 percent of direct research funding. Previously, institutions negotiated individual rates with NIH, with many receiving 27 percent to 60 percent in indirect cost support.
Should the cuts go through, the University of Minnesota is projected to lose around $62 million annually, while the Mayo Clinic stands to lose $54 million. Statewide, all institutions receiving money from NIH could see a loss of an estimated $117 million per year under the new policy, causing many important research projects to grind to a halt.
U of M research teams have worked on a wide variety of research topics over the years, including cancer immunotherapy, stem cell therapies, and cardiovascular treatments. In 2023, the U of M Medical School received $296 million in NIH awards for more than 600 projects, ranking 24th nationally. Of that funding, $80 million, approximately 27 percent, was allocated for indirect costs.
“This decision would cut reimbursements for research facilities and administrative costs, which cover critical, lifesaving research activities ranging from patient safety to research security,” University of Minnesota President Rebecca Cunningham wrote in a memo to faculty and students. “It would no doubt have serious consequences for patients across the state, as well as our students, faculty, and staff. (This) is a direct attack on our ability to advance the University’s public service mission, and it has created fear and uncertainty across our community.”
Court injunction
The lawsuit, filed in U.S. District Court in Massachusetts, contends that the administration’s decision violates federal law by skirting congressional authority. Attorneys general from Massachusetts, California, Maryland, and New York—states with major biomedical research hubs—are among those leading the challenge.
“These universities and research institutions are vital economic and social institutions in each state, employing thousands of their citizens, educating and training thousands more, and creating investment and partnering opportunities with the private sector,” the lawsuit states.
Minnesota attorney General Keith Ellison, who joined the lawsuit, said in a statement that NIH’s work is essential to public health.
“The NIH funds critical research into fighting chronic and catastrophic disease in every corner of our country,” Ellison said. “Abruptly and arbitrarily slashing funding for the NIH isn’t only dangerous and cruel—it’s against the law.”
The NIH, which funds approximately 50,000 competitive grants annually, is the largest source of federal funding for medical research in the United States. In fiscal year 2023, it distributed $45 billion, with $9 billion allocated to indirect costs.
The system where institutions negotiate their indirect cost rates with NIH has been in place for decades, allowing recipients to address cost issues specific to their institutions. Critics say the one-size-fits-all approach of the Trump administration is insufficient to cover even generally accepted overhead costs, inevitably leading to the termination of research, layoffs of research staff, and closure of facilities.
That compromised research system could negate the administration’s argument that a uniform 15 percent cap would save taxpayers $4 billion and allow more funding to be directed toward actual research rather than administrative overhead.
“The United States should have the best medical research in the world,” the NIH stated in a memo defending the policy. “It is accordingly vital to ensure that as many funds as possible go toward direct scientific research costs rather than administrative overhead.”
Academic and medical leaders argue that indirect costs are essential for research institutions to operate effectively. Without adequate funding for facilities, staffing, and equipment maintenance, they contend that scientific progress will slow, particularly in areas requiring long-term investment, such as cancer treatments, infectious disease research, and neurological disorders.
Opposition
The NIH’s decision has faced bipartisan criticism. Senate Appropriations Chair Susan Collins, R-Maine, called the move a “poorly conceived directive” and noted that Congress had explicitly prohibited the NIH from modifying its indirect cost reimbursements through appropriations legislation. “There is no investment that pays greater dividends to American families than our investment in biomedical research. Additionally, fiscal year 2024 appropriations legislation includes language that prohibits the use of funds to modify NIH indirect costs.”
Minnesota Democratic Sen. Amy Klobuchar also backed the lawsuit, warning that the cuts would “set back medical innovation and lead to unnecessary suffering.”
Meanwhile, researchers at the U of M Medical School and Mayo Clinic are bracing for potential disruptions to ongoing studies.
For now, the temporary restraining order has halted the policy’s implementation, but another hearing on Feb. 21 leaves the fate of billions in federal research funding uncertain.