New York Attorney General Letitia James, along with a coalition of 21 other attorneys general, has filed a lawsuit against the Trump administration, the Department of Health and Human Services, and the National Institutes of Health (NIH). The lawsuit challenges a new NIH policy that caps "indirect cost" reimbursements at 15% for research institutions nationwide. These reimbursements cover expenses essential to biomedical research, such as laboratory space and equipment. Critics argue that limiting these funds could disrupt medical research and lead to layoffs or closures.
Attorney General James stated, "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." She expressed concern that capping NIH reimbursement rates might force scientists to halt important research on diseases like cancer and diabetes.
The NIH announced this change on February 7, with plans for it to take effect on February 10. This sudden decision left universities with little time to adjust their budgets. Without intervention, this could result in significant disruptions in clinical trials and research programs.
The coalition argues that this rate change violates Congressional appropriations law by altering indirect cost rates without authorization since 2018. They claim NIH exceeded its authority by applying cuts retroactively to existing grants without proper notice or opportunity for comment. The attorneys general are seeking a court order to prevent implementation of this policy.
NIH is a major source of federal funding for U.S. medical research, contributing to numerous scientific breakthroughs. In New York alone, $5 billion in open NIH grants are at risk due to the proposed cap. Institutions like SUNY could lose millions if forced to abandon ongoing projects.
Joining Attorney General James in this legal action are attorneys general from states including California, Illinois, Massachusetts, Michigan, New Jersey, Oregon, Washington among others.
Special Counsel Molly Thomas-Jensen and Special Counsel Rabia Muqaddam are handling the case for New York under First Deputy Attorney General Jennifer Levy's supervision.