NIH Announces New Funding Policy Effective Monday, Feb. 10
LATE UPDATE: On Monday, Feb. 10, three Federal lawsuits were filed challenging NIH’s authority to change this rule without notice and such a fashion. They were all filed in Massachusetts, Association of American Medical Colleges, et. al. v. NIH, Association of American Universities, et. al. v. HHS, and the Commonwealth of Massachusetts, et.al. v. NIH All suits requested a Temporary Restraining Order. The judge in the Massachusetts, et. al. v. NIH case (which includes 21 other states) issued a TRO late Monday night pending a hearing on Friday, Feb. 21.
On Friday, Feb. 8, the National Institutes of Health (NIH) announced a new policy that limits funding for indirect costs in medical research grants to 15%, significantly reducing financial support for universities, medical schools and research institutions. Indirect costs cover essential expenses, such as building maintenance, equipment and support staff salaries. The NIH justifies this change by arguing that most private foundations provide lower indirect cost rates, and universities accept such grants. The agency also emphasizes its responsibility to ensure taxpayer funds are used efficiently to benefit the American people.
This policy change affects both current and future grants, raising concerns among researchers. Initially, the Department of Health and Human Services (HHS) suggested that the rule could apply retroactively, requiring institutions to return previously allocated funds. However, according to National Public Radio (NPR ), HHS officials clarified to NPR that, for now, they will not enforce retroactive adjustments to ease implementation. Despite this, the agency stated that it will continue to evaluate whether a retrospective application of the rule would be beneficial for taxpayers.
The NIH, which spent over $35 billion in the 2023 fiscal year on nearly 50,000 grants, allocated $9 billion specifically for indirect costs. The new funding cap is expected to have a major impact on research institutions, which rely on these funds to maintain infrastructure and operations. Many researchers are criticizing the policy, warning that it could hinder scientific progress and innovation.
The change, which took effect on Monday, Feb. 10, marks another significant move by the Trump administration in reshaping federal support for scientific research.