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Many Oregon scientists are pleased with a Jan. 5 appeals court ruling that, for now, preserves hundreds of millions of dollars in annual federal funding for the world of research.
The order goes back to a matter that started last February. Under the guidance of Elon Musk’s Department of Government Efficiency, the National Institutes of Health said it would effectively cap “indirect cost” reimbursement (for things like electricity and administrative salaries) at 15% of the funds allocated directly to scientific work.
For context, one major NIH grant recipient, Oregon Health & Science University, had negotiated a 56% rate, and the new cap would have meant a revenue loss on the order of $80 million annually.
The NIH is the largest source of funding for medical research in the United States. As WW has reported, between OHSU and other institutions, Oregon gets about $1 billion from the NIH every year. One analysis says those grants supports some 5,000 jobs in the state.
Days after the NIH issued its new guidance early last year, a range of parties sued, prompting a U.S. district court to block the guidance from going into effect. Litigation continued, and the latest ruling out of the 1st U.S. Circuit Court of Appeals concurred with the lower court, finding the Trump administration had, among other things, violated congressional guidance for research funding.
In a statement, OHSU interim chief research officer Bonnie Nagel said NIH-funded research is a pillar of the university’s work to improve the quality of human life through science, and called the ruling “a victory for scientific inquiry and discovery at OHSU and in the United States.”
An NIH spokesperson said the agency cannot comment on ongoing litigation. But it has justified its push for a 15% cap as a way to send more taxpayer money to “direct” science rather than administrative costs. It notes even that its proposed cap would still be higher than what many major private foundations allow.
Critics said the DOGE argument reflected a misunderstanding of the way the NIH money is used, and how critical it was to the U.S. research community. As the 1st Circuit Court of Appeals noted in its opinion Monday, “The labels ‘direct’ and ‘indirect’ … refer to different categories of research costs but do not indicate that one type of expenditure is more or less critical to research than the other.”
OHSU filed a brief in the case last year and listed various projects funded by NIH grants. One sought to better understand a waste-clearing pathway in the human brain, another identified a gene that blocked immune responses to important vaccines.
In the 2025 fiscal year, OHSU says, it received $309 million in total NIH funding, of which $254 million was the category of grant that includes a portion of indirect costs.
This is a huge amount of the $720 million OHSU reported spending that year overall on “instruction, research, and public service.”
