Tejal Somvanshi
The Trump administration’s recent decision to cap National Institutes of Health (NIH) indirect costs at 15% has thrown the biomedical research community into turmoil. This sharp reduction from the current average of 28% threatens ongoing clinical trials, research projects, and the infrastructure supporting American medical innovation.
Court Halts Implementation – For Now
On March 5, U.S. District Judge Angel Kelley issued a nationwide injunction blocking the cuts. The Boston-based judge cited “irreparable harm” to ongoing research and clinical trials, noting the policy would affect “thousands of existing grants, totaling billions of dollars across all 50 states.”
“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,” Judge Kelley wrote.
Massachusetts Attorney General Andrea Joy Campbell called the decision “a major win for research institutions across the country.” The Trump administration is expected to appeal.
The Indirect Cost Debate
NIH grant funding falls into two categories:
- Direct costs: Expenses for the actual research (researchers’ salaries, supplies)
- Indirect costs: Expenses for facilities and administration (lab space, utilities, regulatory compliance)
These indirect cost rates vary from 30% to 70%, individually negotiated between institutions and federal agencies based on documented expenses.
In announcing the cuts, NIH pointed out that Harvard, Yale, and Johns Hopkins universities charge more than 60% for indirect costs despite their multi-billion-dollar endowments. However, most research institutions lack such financial resources.
Rural Areas and Red States Hit Hardest
According to immunologists Prakash Nagarkatti and Mitzi Nagarkatti, the cuts would disproportionately affect states with limited research infrastructure:
“While we believe such cuts will be detrimental to the entire country, they will disproportionately hurt states that traditionally have received very low levels of NIH funding, the majority of which are red states that supported Trump’s election to a second term.”
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NIH funding shows stark geographic disparities:
- 27 states receive 94% of NIH funding
- 23 states (plus Puerto Rico) receive just 6%
These 23 states, designated as IDeA (Institutional Development Award) states, typically have:
- Fewer medical centers and research universities
- More rural populations
- Less robust economies
- Limited research infrastructure
Sixteen of these 23 IDeA states voted for Trump in 2024.
Several Republican senators have voiced opposition to the cuts. Senator Susan Collins of Maine stated they “would be devastating, stopping vital biomedical research and leading to the loss of jobs.”
Economic and Health Consequences
NIH funding drives both economic activity and health advances:
- In 2024, NIH funding generated an estimated $92 billion in economic activity
- Every $100 million in NIH funding creates 76 patents and $598 million in further R&D
- NIH-designated centers serve approximately 400,000 cancer patients annually
- The agency funds critical research on infectious diseases, including COVID-19 and HIV/AIDS
Dr. Richard Huganir of Johns Hopkins University, who is developing treatments for intellectual disabilities, expressed urgent concern: “The problem is for the kids, there’s a window of time to treat them. We’re running out of time.”
Dr. Otis Brawley, another Hopkins specialist, was more direct: “We’re actually going to kill people is what it amounts to, because we’re not studying how to get appropriate care to all people.”
Local Communities Feel the Impact
The University of Utah’s Huntsman Cancer Institute serves patients across five western states. Neli Ulrich noted that cuts would threaten their program that trains local doctors to conduct clinical trial procedures in rural communities, allowing patients to participate without traveling long distances.
State investment in research shows dramatic disparities:
- California: $548 million (2023)
- New York: $303 million
- Kentucky: $49 million
- West Virginia: $15 million
These differences highlight how challenging it would be for resource-limited states to maintain research progress if NIH funding is cut.
History Repeats Itself
This isn’t the first attempt to cut NIH indirect costs. During Trump’s first term in 2017, a proposal to cap rates at 10% prompted Congress to add protective language to funding legislation since 2018 “to restrict NIH’s ability to enact an across-the-board rate reduction.”
Judge Kelley cited this language in her ruling, finding that the 15% cap violated the law, failed to comply with regulatory requirements, and lacked sufficient justification.
The NIH spent over $35 billion in fiscal 2023 on grants to researchers at more than 2,500 institutions, with about $9 billion covering indirect costs. Administration officials stated the cap would save $4 billion annually, though a Justice Department lawyer later characterized this as a “misunderstanding,” clarifying the money would be redirected to new research grants rather than removed from the budget.
The cuts are part of broader efforts to reduce federal spending since Trump returned to office in January 2025.
FAQ
What exactly are the NIH funding cuts and who would they affect?
The Trump administration has proposed capping indirect cost reimbursements for NIH-funded research at 15%, down from the previous average of 28%. This affects the money research institutions receive to maintain facilities, labs, utilities, and administrative support. The cuts would impact over 2,500 institutions nationwide that receive NIH grants, from major research universities to small rural hospitals and clinics participating in clinical trials.
Why are “indirect costs” necessary for medical research?
Indirect costs cover essential research infrastructure expenses beyond the direct research itself. These include laboratory maintenance, utilities, equipment purchases, regulatory compliance, safety protocols, and administrative support. Without these funds, institutions cannot maintain the environments and systems needed for conducting reliable, safe research. For many institutions, especially in rural areas, these funds are critical for maintaining cutting-edge facilities that can compete nationally.
How did the courts respond to the NIH funding cuts?
U.S. District Judge Angel Kelley issued a nationwide injunction on March 5, 2025, blocking implementation of the cuts. The judge found the policy violated language in federal funding legislation passed since 2018 specifically designed to prevent such reductions. Judge Kelley emphasized the “imminent risk of halting life-saving clinical trials” and criticized the administration for making “a unilateral change over a weekend, without regard for ongoing research and clinical trials.”
Which communities would be most affected by these cuts?
Rural communities and states with less developed research infrastructure would suffer disproportionately. The 23 IDeA (Institutional Development Award) states that already receive only 6% of NIH funding combined would be hit hardest, as they have fewer resources to compensate for lost federal support. Sixteen of these states voted for Trump in 2024. Patients in rural areas, especially those participating in clinical trials for conditions like cancer, would face reduced access to cutting-edge treatments and potentially need to travel much farther for care.
What economic impact would the NIH funding cuts have?
NIH funding generated an estimated $92 billion in economic activity nationwide in 2024. Every $100 million in NIH funding creates 76 patents and $598 million in further research and development. The cuts would trigger job losses at universities, research institutions, and supporting businesses in every state. The Association of American Medical Colleges and other organizations have warned about potential lab closures, researcher layoffs, and disrupted clinical trials that would affect both health outcomes and local economies.
Is there bipartisan opposition to these funding cuts?
Yes, several Republican senators have voiced opposition, including Susan Collins of Maine, who said the cuts “would be devastating, stopping vital biomedical research and leading to the loss of jobs.” The potential impact on rural states and communities has sparked concern across party lines. During congressional hearings, Dr. Jay Bhattacharya, Trump’s nominee for NIH director, stated he would ensure “scientists employed by and funded by the agency have resources to do the lifesaving work they do” if confirmed.
