Overview
- A unanimous three-judge panel affirmed the Massachusetts district court’s permanent injunction, holding the cap unlawful under a congressional appropriations rider and HHS regulations and confirming district court jurisdiction.
- NIH’s February 2025 guidance sought to impose an immediate, across-the-board 15% limit on indirect cost reimbursements for both current and future grants, displacing negotiated institutional rates.
- NIH had estimated the policy would redirect about $4 billion annually to direct research costs, while plaintiffs warned it would strip essential overhead support and risk layoffs, lab closures, and stalled clinical trials.
- The challenge was brought by a coalition of 22 state attorneys general alongside medical associations and universities, and the appellate decision keeps the injunction in place nationwide.
- HHS and NIH declined substantive comment on next steps, and it remains unclear whether the administration will appeal as courts have also blocked similar 15% caps sought at NSF, Energy, and Defense.