Chemistry students work in a lab at the University of Rhode Island. The school could lose a large chunk of its overhead reimbursements from the National Institutes of Health if a limit on reimbursements imposed by the Trump administration survives a court battle. (Photo by Michael Salerno/courtesy of URI)
Rhode Island scholars and scientists will be closely watching the U.S. District Court of Massachusetts Friday as a battalion of blue state attorneys general wrestles again with the Trump administration — this time, over a proposal to slim reimbursements for overhead costs in research funding.
One of the scientists awaiting the outcome is Bongsup Cho, a professor of pharmacy at the University of Rhode Island (URI) and also program director of the school’s Rhode Island IDeA Network of Biomedical Research Excellence (RI-INBRE).
Of the current mood at the school’s research labs, Cho said, “The morale of staff and researchers and students is very low.”
URI receives a 57.5% indirect reimbursement rate for things like overhead and administrative expenses for research funded through the National Institutes of Health (NIH), Cho said. That’s a lot higher than the 15% cap on such costs outlined in a Feb. 7 policy change notice from the NIH — a reduction of such potential scale and impact he likened it to a “sledgehammer.” The instruments at RI-INBRE are available to any biomedical researcher in Rhode Island, Cho said, for a “very nominal fee.” The reimbursement cap could make it harder to maintain those facilities.
“These days, maintaining core facilities is not a joke,” Cho said. “I always kind of joke to the leadership that if you don’t have this grant, then the core facility will be out of business, and literally, it’s going to be a junkyard.”
The NIH awarded around $47 billion in grants to U.S. researchers last year, and traditionally has negotiated rates directly with grant-receiving institutions. In the current fiscal year, there were 717 active projects listed in the NIH grants database for Rhode Island, totaling about $332 million.
The NIH policy revision noted it was now targeting indirect costs. “The United States should have the best medical research in the world,” it read. “It is accordingly vital to ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead.”
The policy applies to institutions of higher education, which could also affect teaching hospitals. Many of the NIH-funded projects listed on the agency’s website are at hospitals, like Rhode Island Hospital and Butler Hospital.
The morale of staff and researchers and students is very low.
– Bongsup Cho, professor of pharmacy at the University of Rhode Island
Days after the policy change, Massachusetts Attorney General Andrea Joy Campbell and 21 other attorneys general, including Rhode Island Attorney General Peter Neronha, filed and secured a temporary restraining order against the cap on Feb. 10. A hearing in the case is scheduled for Friday, Feb. 21, in Boston at 10 a.m., with District Judge Angel Kelley presiding. Kelley will simultaneously hear two similar lawsuits filed and led by the Association of American Medical Colleges and the Association of American Universities.
URI has a $45.5 million portfolio of NIH grants, spokesperson Dawn Bergantino said in an email. She added that URI Vice President for Research and Economic Development Bethany Jenkins was one of the locals who submitted a declaration in the litigation.
Jenkins’ court declaration estimated a $2.8 million annual loss for URI, but Bergantino wrote Thursday that the estimated impact had been upped to $4.8 million. That could leave administrative costs to weigh heavier on RI-INBRE, which Cho has directed since 2017. The statewide collaborative grant helps provide seed funding for researchers across the state, and received a little over $1 million in indirect reimbursements last year, according to the NIH website.
A Feb. 11 communication from URI noted that the school was temporarily freezing any new expenditures from Fund 110, which is used for indirect cost revenues, as it will serve as “the primary source” to fill any research shortfalls, should the NIH attorneys vanquish the attorneys generals’ challenge and the reimbursement cap continue.
The university’s leadership is “scrambling to find a solution,” Cho said. “But I’m not sure if they have any clear information. What we hear in the news media is what we get pretty much.”
Nice funding, if you can get it
URI’s Bergantino said the school would reserve further comment on the NIH proposal until after the court hearing Friday.
“We cannot speculate on future federal actions or legal findings. We are working under the current regulatory framework,” she wrote. Currently, funds are still being dispensed as normal because of the temporary restraining order.”
Brown University was also waiting to hear the outcome. “It’s important to note that the proposed changes to NIH funding are on hold, given a federal court order,” spokesperson Brian Clark said in an email.
An Alzheimer’s research project at Brown is listed on the NIH site as the costliest grant in Rhode Island currently, with $3 million in indirect costs reimbursed. Jill Harrison, one of the principal investigators on the ongoing study, also deferred comment until after the court case Friday.
A declaration from Dr. Greg Hirth, vice president of research at Brown, was submitted in the American Association of Universities suit and went into more detail. In fiscal 2024, the feds reimbursed the school about $37 million in facilities and administrative costs for research awards. The 15% cap could force Brown to “move very quickly to adjust its operations in order to absorb the loss of revenue,” Hirth wrote, which could mean laying off 200 personnel that support research activity, like coordinators, lab managers, janitors, security and research nurses.
Hirth maintained that Brown could not fill the gap with other revenue sources, as the school already operates at a loss when it comes to research. In fiscal 2022, the school spent about $315 million on research, about $66 million more than direct and indirect reimbursements combined. About $28 million of that sum was “‘unrecovered’ indirect costs,” Hirth wrote, noting that the university is capped at a 26% reimbursement rate, so the school pays for anything beyond that amount.
Brown can’t rely on its $7.2 billion endowment either, Hirth wrote, as it consists of over 3,800 distinct funds which were gifted with specific purposes in mind. The endowment payouts from these charitable gifts, which range from 4.5% to 5.5% annually, are legally bound to be paid out as specified by their donors.
Attorneys for the NIH had a less apocalyptic interpretation of the funding, according to a Feb. 14 cross-motion that sought to stop the temporary restraining order.
“To deviate from a baseline is always to consider it, and the Court should reject Plaintiffs’ atextual attempt to freeze in place the excessive indirect cost rates they previously charged to taxpayers,” wrote the federal attorneys.
Not all grants are imperiled in Rhode Island, such as the one awarded via the Small Business Innovative Research program to ProThera Biologics in Providence for a study of brain injuries in infants. The study was about $400,000 in indirect reimbursements from the NIH in 2024.
Yow-Pin Lim, the company’s co-founder and CEO, said in an email that indirect costs are handled similarly by small businesses and academic institutions or hospitals, but added that “universities/hospitals usually request significantly higher indirect rates than small business entities.”
Small businesses are capped at a 40% indirect reimbursement rate. “However, if the business entity likes to get a higher rate, they would need to negotiate with NIH to justify the expenses,” Lim said. But academic institutions with more sprawling infrastructure may need to negotiate even higher rates, he added, sometimes up to 70%.
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