This amicus curiae brief—filed in the consolidated First Circuit appeals (Nos. 25-1343, 25-1344, 25-1345) from Massachusetts v. NIH (D. Mass. Mar. 5, 2025)—supports the district court’s permanent injunction blocking the February 2025 National Institutes of Health (NIH) Notice that would replace six decades of institution-specific, negotiated indirect cost reimbursement (ICR) rates with a flat 15% cap for all research grants. The NIH violated the Administrative Procedure Act’s “arbitrary and capricious” standard and 45 C.F.R. § 75.414(c)’s requirement of “documented justification” for deviations from negotiated ICR rates by failing to engage in the required reasoned decision making.

First, in attempting to justify its ICR rate cut as an effort “to ensure taxpayer dollars are used in ways that benefit the American people and improve their quality of life,” the NIH neglected the importance of indirect cost funding in supporting high-value scientific research. Second, the NIH mischaracterized its own data on indirect costs: it conflated negotiated rates with the materially lower effective rates that have held steady for decades at around 35-45%, and it overattributed indirect costs to administrative overhead and ignored their core, research-enabling functions. Third, in benchmarking its 15% rate to those used by private foundations, the NIH relied on a misleading comparison that disregards fundamental differences in scale, objectives, cost-accounting bases, and allowable cost recovery between federal and philanthropic funding.