New York Attorney General Letitia James today joined a coalition of 21 other attorneys general in suing the Trump administration, the Department of Health and Human Services, and the National Institutes of Health (NIH) for attempting to illegally slash grant funding to universities and research institutions across the country. Attorney General James and the coalition are challenging the NIH’s new policy that caps “indirect cost” reimbursements at 15% for every research institution in the country. These indirect cost reimbursements cover all expenses that facilitate biomedical research, including laboratory space, equipment, faculty, infrastructure, and utility costs. Limiting these reimbursements will threaten lifesaving medical research at institutions across the country and could lead to layoffs, disruptions to clinical trials, and even laboratory closures. With today’s lawsuit, Attorney General James and the coalition seek to prevent the policy from taking effect.
“This is yet another unlawful and reckless attempt by the Trump administration to undermine vital public institutions and harm the people who rely on them,” said Attorney General James. “The administration’s decision to cap NIH reimbursement rates could force scientists to shutter their lifesaving research on cancer, diabetes, Alzheimer’s, addiction, infectious diseases, and more. My office will not stand idly by as this administration once again puts politics over science and endangers public health. We are suing to prevent this harmful policy from taking effect.”
On February 7, NIH announced it would abruptly slash indirect cost rates for research grants to 15% across the board, significantly less than the cost required to perform cutting-edge medical research. The NIH also announced that cuts would go into effect the next business day, Monday, February 10, giving universities and institutions no time to plan for the enormous budget gaps they are now facing. Without immediate relief, this action could result in the suspension of life-saving and life-extending clinical trials, disruption of research programs, layoffs, and laboratory closures.
Attorney General James and the coalition argue that the rate change violates Congressional appropriations law, which has prohibited NIH from altering indirect cost rates without proper authorization since 2018. This directive was passed by Congress during the first Trump administration, following another proposal by the administration to drastically cut research reimbursements. In addition, the attorneys general argue that NIH exceeded its authority by making this cut retroactive to existing grants, and that the cut lacks any factual basis and was enacted without proper notice or any opportunity for comment. The attorneys general are seeking a court order barring the Trump administration and NIH from implementing the action.
The NIH is the primary source of federal funding for medical research in the United States. Medical research funding by NIH grants has led to innumerable scientific breakthroughs, including the discovery of treatment for cancers of all types, the first sequencing of DNA, and the development of the MRI. Additionally, dozens of NIH-supported scientists have earned Nobel Prizes for their groundbreaking scientific work. Most NIH-funded research occurs outside of federal government institutions such as public and private universities and colleges.
In New York, there are currently $5 billion in open NIH grants to institutions throughout the state. If the proposed funding cap takes effect, approximately 250 institutions in New York would be impacted, encompassing most universities and medical schools in the state. New York institutions stand to lose approximately $850 million from this policy. For example, the State University of New York (SUNY) system alone stands to lose $78 million through the full life of its current grants and would have to abandon breakthrough research projects on cancer and Alzheimer’s disease if the cap is allowed to go forward.
Joining Attorney General James in filing this lawsuit are the attorneys general of Arizona, California, Connecticut, Colorado, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, Washington, and Wisconsin.
This matter is being handled for New York by Special Counsel Molly Thomas-Jensen and Special Counsel for Federal Initiatives Rabia Muqaddam of the Executive Division, under the supervision of First Deputy Attorney General Jennifer Levy.