WASHINGTON, DC – The abrupt decision by the United States National Institutes of Health to slash funding for overheads to the nation’s research centers and universities has provoked a fresh outcry among leading US researchers, global health experts and even some Republican politicians  – with leading one expert saying this latest move could “seriously jeopardize” the US’s global dominance in biomedical research and innovation.

“If the Trump administration goes ahead with its plan to slash NIH research funding, it would seriously jeopardize the standing of the US worldwide,” said Lawrence Gostin, Distinguished University Professor in Global Health Law at Georgetown University, in a statement to Health Policy Watch. 

Similar reactions echoed across the research world after NIH’s Friday announcement cutting grants to research institutions for their “indirect costs” – which include expensive laboratory equipment and technologies vital to cutting edge research.  The cuts to biomedical research investments followed a shock list of recent Trump measures to drastically curtail the public health watchdog activities of the US Centers for Disease Control, as well as dismantle USAID and related global health programs. 

Susan Collins, a Republican  from Maine, who chairs the powerful Senate Appropriatiations commitee, also expressed opposition to what she called “the poorly conceived directive imposing an arbitrary cap on the indirect costs,” adding that the Congressional act under which the NIH allocations are made, also forbids arbitrary alterations. But even so, she posted a statement saying that she would vote to approve PresidentDonald Trump’s nominee Robert F Kennedy Jr, a vaccine skeptic who has also questioned the solidity of research underpinning recent vaccines, as Secretary of Health and Human Services, when the issue comes before the Senate, presumably later this week. 

Judge temporarily freezes NIH funding cuts 

On Monday, a Massachusetts judge  issued a nationwide order, temporarily halted the directive to slash the NIH grants from the Office of the Director, just before it was due to take effect. The suspension came as 22 state attorney generals sued the federal government for violating the 2018 Congressional appropriations law, which prohibits the NIH from altering its indirect cost rates “without proper authorization,” according to the filing. US District Judge Angel Kelley scheduled a hearing for 21 February for further arguments. 

Another lawsuit was filed on Monday on behalf of private and public universities and hospital systems, which stand to lose millions in federal dollars. The American Association of Universties, American Council on Education, Brandeis, Brown, George Washington, Cornell, Johns Hopkins, University of Rochester, Massachusetts Institute of Technology, and the University of California, among others, joined in filing suit against HHS, NIH, and the acting heads of these two agenices. These also argue that the funding cuts violate the Congressional appropriations law, and breaks prior negotiated indirect costs rates.

Across the country, from Birmingham to Buffalo, NIH research dollars fuels economic growth, medical innovation, and offers jobs to millions of Americans. In 24 states, hospital or university systems are the single largest employers, and leading the US’s global dominance in cancer, cardiovascular, and public health research. 

The storm unfurled Friday, after the Office of the Director of the National Institutes of Health, under an order by the Trump administration, issued a notice limiting the indirect costs biomedical research relies on to fund laboratories, equipment, facilities, new faculty, and software, to a standard 15% across all grants and institutions receiving them. 

The move was widely condemned by universities, research institutions, and medical centers who said that the one-size-fits all payment fails to reflect the real costs of research, in terms of investments in laboratories, technology and other hardware. 

Chipping away at the NIH’s status as the ‘envy of the world’

At stake, critics say, is the National Institutes of Health (NIH) and the US biomedical research operation’s preeminence as the leading research innovator in the world, at the forefront of cancer therapies, personalized medicine, and brain health, to name a few domains. The administration’s moves have deeply rattled the NIH, with  the number two official, Dr. Lawrence Tabak to resigning 12 February. 

“The NIH is the envy of the world and sets the gold standard for scientific research and innovation. NIH funding has led to breakthroughs, ranging from treatments for cancer and cardiovascular diseases to vaccines for infectious diseases, and so much more,” said Gostin. 

The economic and scientific impacts could reverberate across the country – and in cancer clinical trials and drug-development labs. 

“NIH does incredible work, and this seems like it’s an obscure overhead issue. It is not,” said Senator Mark Warner (D-Virginia) in a town hall for residents.

“If these cuts, without any congressional review go through, we will have less research, less cures.” The senator pointed out that institutions have already negotiated and signed contracts at existing indirect cost rates. “You cannot arbitrarily change the reimbursement level for existing contracts by executive order.” Warner alluded to the multitude of Trump-issued executive orders that violate the law.

Ttop universities and medical centers stand to lose “$100 million a year or more” if the sweeping changes to how the National Institutes of Health reimburses research costs takes effect, according to an analysis from STAT news. 

White House claims moves allows ‘more money and resources available for legitimate scientific research’

In a post on X, the NIH framed its decision as a cost-cutting move, given that elite universities have tens of billions of dollars in endowment funds. Even so, research institutions at Harvard University, Yale University, and Johns Hopkins University all receive indirect rates over 60%, the NIH said. The post highlights that the 15% cap would save $4 billion per year. About $9 billion of the $35 billion awarded to researchers through grants in 2023 was in the form of indirect costs.

Last year, $9B of the $35B that the National Institutes of Health (NIH) granted for research was used for administrative overhead, what is known as “indirect costs.” Today, NIH lowered the maximum indirect cost rate research institutions can charge the government to 15%, above… pic.twitter.com/FSUYpEGKsr

— NIH (@NIH) February 7, 2025

“Contrary to the hysteria, redirecting billions of allocated NIH spending away from administrative bloat means there will be more money and resources available for legitimate scientific research, not less,” said White House spokesperson Kush Desai in a statement to Fox News Digital. The comment implies that the administration does not believe that current scientific research is not “legitimate.”

And on X, Elon Musk, the un-elected billionaire who leads Donald Trump’s Department of Government Efficiency (DOGE), echoed this sentiment, saying over the weekend “Can you believe that universities with tens of billions in endowments were siphoning off 60% of research award money for ‘overhead’? What a ripoff!”

But most universities are not Harvard, Gostin countered, saying, “Most small to medium sized universities actually take a loss in taking NIH dollars even with indirect payments,” he said in a statement to Health Policy Watch. 

“Research costs an enormous amount, including paying researchers, running laboratories, and conducting large clinical trials. Many universities could not afford to take NIH research grants with such low indirect costs. That means the pipeline of research innovation could dry up.”

“What administrative bloat?” he asked. 

Collins, Britt, say cuts could harm Republican states 

The NIH distributes about 80% of its $48 billion budget to research institutions in the US – in Republican as well as Democratic-majority states. As a result, lawmakers from both parties have scrambled to the defense of universities, hospitals, and institutions that rely on NIH funding.

“I oppose the poorly conceived directive imposing an arbitrary cap on the indirect costs that are part of NIH grants and negotiated between the grant recipient and NIH,” said Senator Susan Collins (R-Maine) in her statement, saying she’s heard from laboratories and research institutions and other schools in Maine about the cuts, which “would be devastating, stopping vital biomedical research and leading to the loss of jobs.”

Collins, who chairs the Senate Appropriations Committee, and noted that the fiscal 2024 appropriations law, which funds the federal government, “includes language that prohibits the use of funds to modify NIH indirect costs,” indicating that the NIH is not allowed to arbitrarily change its funding policies.

Still supporting Kennedy for Secretary of HHS

Despite her opposition to the NIH’s cap, Collins said she would support Robert F Kennedy Jr, Trump’s nominee for Secretary of Health and Human Services. Kennedy’s record of support for biomedical research has been uneven, at best, expressing skepticism over vaccine studies, in particular. Even so, Collins said she had contacted Kennedy about the cuts, and said he pledged to “reexamine” the issue.

During his Senate confirmation hearings, Kennedy repeatedly dodged questions as to whether he would continue NIH’s funding for vaccines, including the cutting-edge mRNA technology developed for the COVID-19 vaccines. And in the months following his nomination, Kennedy said he would cut 600 NIH jobs. 

Kennedy could afford three “no” votes from Republicans and still be confirmed. 

Alabama Senator also expresses misgivings over NIH cuts

Another Republican senator and Trump ally, Katie Britt of Alabama, also expressed misgivings over the funding cuts.

“While the administration works to achieve this goal at NIH, a smart, targeted approach is needed in order to not hinder life-saving, groundbreaking research at high-achieving institutions like those in Alabama,” Britt told AL.com, an Alabama-based news agency. Alabama is home to several research universities who receive billions in NIH funding.

The University of Alabama is the single largest employer in the state. 

The University is an example of how universities and hospitals often support entire towns, cities, or even states. 

In Western New York, the University of Rochester is the largest private employer in the region, generating approximately 56,000 jobs across Upstate New York. And in Pennsylvania, the University of Pittsburgh Medical Center system creates nearly a million jobs, and is the largest employer in the state.

In their filings against the NIH, leading US universities disclosed they received up to $1 billion dollars in NIH funding, in the case of Johns Hopkins. The University of Rochester disclosed receiving $188 million in fiscal year 2024, and with the current indirect cost rate at 15%, it stands to lose $40 million. The filing also revealed that universities in conservative states would lose tens of millions – the University of Florida would lose $70 million in funding.   

Department of Defense, philanthropies, and private companies unable to fill funding void

With the rationale of government efficiency, DOGE has singled out the NIH’s funding structure as the leading public funder of biomedical research. Some observers hope that the Department of Defense (DOD), a frequent partner, could pick up some of the slack with its $800 billion budget. The DOD spent $1.5 billion on such biomedical research in fiscal year 2021.

But Trump has instructed DOGE to turn its attention to Defense spending next, saying in an interview on Friday “And I’ve instructed him [Musk] to go check out Education, to check out the Pentagon, which is the military. And you know, sadly, you’ll find some things that are pretty bad.”  Others have suggested that the private sector might step into NIH’s shoes. But historically,  private sector investors have not been eager to fund the kind of basic research that NIH supports – which often then lead to the breakthroughs, such as mRNA vaccine technology, that the private sector later develops.  

As for the DOD, Gostin notes that “it is possible that the DOD would expand its research portfolio but Musk will probably also cut Defense spending. But the main point is there is no substitute for the NIH. Many scientists want peer-to-peer relationships with NIH scientists and may be leary in getting too close to military applications of their research.”

The US has been the world’s leader in research and biomedical innovation for over 80 years. 

In a letter to the university community, Harvard president Alan M. Garber expressed the widespread sentiment: “At a time of rapid strides in quantum computing, artificial intelligence, brain science, biological imaging, and regenerative biology, and when other nations are expanding their investment in science, America should not drop knowingly and willingly from her lead position on the endless frontier.” 

Last updated 12 February.

Image Credits: NIH, FDA/Michael Ermarth, Kristy Ainslie, NIAID.