Court Temporarily Blocks NIH’s 15% Cap on Indirect Costs for Research Grants

February 12, 2025

A federal judge in Massachusetts issued a temporary restraining order on Monday to block the National Institutes of Health (NIH) from enacting a planned 15% indirect cost rate for new and existing research grants in response to a lawsuit filed by 22 state attorneys general.

The temporary restraining order, issued by judge Angel Kelley of the U.S. District Court of Massachusetts, blocks the agency from taking any steps to “implement, apply, or enforce” the Supplemental Guidance to the 2024 NIH Grants Policy Statement: Indirect Cost Rates (NOTOD-25-068). Kelley issued a similar order in a second lawsuit filed by the Association of American Medical Colleges (AAMC).

The NIH policy, announced Friday, would apply to payments that universities, hospitals and other research institutes use to cover costs associated with equipment, facilities and personnel. Previously, these indirect cost rates averaged between 27% and 28%, with some institutions exceeding 60%, according to NIH estimates. The policy change drew swift condemnation from universities, researchers and medical organizations. In addition to the Massachusetts and AAMC lawsuits, the American Association of Universities also sued the U.S. Department of Health and Human Services over the policy.

Kelley has scheduled in-person hearings for Feb. 21 in the two cases currently under a temporary restraining order.

AABB will continue to monitor and provide updates on how this policy affects the blood and biotherapies community.