Boston, 2025-06-16 21:26:00
NIH Funding Cuts Spark Legal Battles
The Trump administration’s cuts to health research funding are facing legal challenges, causing turmoil for universities and research companies.
- Federal judge ruled against NIH grant terminations, throwing the cuts into doubt.
- Universities are grappling with budget shortfalls due to frozen funds.
- Companies supplying lab equipment are feeling the pinch of reduced demand.
The Trump administration’s decision to slash U.S. government spending on health research has led to a 28% drop in National Institutes of Health (NIH) disbursements, hitting a 10-year low and impacting universities and lab supply companies.
Data from the Treasury Department shows NIH spending fell to $2.8 billion in May, the lowest since September 2014, according to Jefferies, an investment bank. However, a significant legal victory for universities has complicated the situation.
On Monday, a federal judge in Boston ruled the NIH’s refusal to pay grants was arbitrary and illegal, as reported by Reuters. The judge, appointed by Republican president Ronald Reagan, sided with 16 states and other organizations challenging the grant terminations. Scott Delaney, a research scientist at Harvard University, described the ruling as “an extraordinary win for American science.” He noted that the grants could be immediately restored, but the litigation is likely to continue.
The cuts have already taken effect, with pancreatic cancer grant funding for the University of Florida and a coronavirus study at Washington State University eliminated in June, according to Grant Watch. The research affected goes beyond diversity, equity, and inclusion projects, which the Trump administration has criticized.
For decades, the U.S. has invested billions in university research, recognizing the scientific expertise lacking within the government. The NIH is the primary government source for medical and health research, with a 2024 budget of $47.7 billion. Approximately 80% of this funding is distributed to universities and hospitals through grants for specific projects, according to the Congressional Research Service.
These grants are now under fire as President Donald Trump withholds federal funds from Harvard, Columbia, and other universities over alleged left-wing bias and tolerance of antisemitism on campus. Trump has also initiated broader cuts to federal government spending, and while the influence of Elon Musk’s “Department of Government Efficiency” (Doge) on the NIH remains unclear, court documents related to the grant terminations have revealed emails from Doge officials.
Universities nationwide are facing significant financial strain because of the frozen NIH funds. Northwestern University, for example, has been spending around $40 million a month to cover the missing NIH funds, according to Carole LaBonne, a professor at the Chicago-area school. She noted the difficult choices research labs are facing, including potential layoffs and the inability to accept graduate students.
A university spokesman confirmed that Northwestern hadn’t been paid since late March but hadn’t received official notification about the funding freeze. The university is spending tens of millions of dollars a month to maintain its research programs.
The funding freezes are forcing universities to cancel purchase orders with companies. Companies that sell to university labs are feeling the pressure of the NIH cuts.
At a Senate hearing last week, Jay Bhattacharya, NIH director, faced questions from both Democrats and Republicans about the grant terminations. He mentioned an appeals process for halted grants and expressed hope that universities “will come to terms so that we can move forward”.
Thermo Fisher Scientific, a supplier of lab essentials like centrifuges and hydrochloric acid, saw demand from academia soften in April. Marc Casper, the chief executive, stated that the US academic and government business represented only about 7% of Thermo Fisher’s revenue. The company’s spokeswoman noted that “we’ve assumed slightly more muted sales for the remainder of the year.”
Other companies affected by the budget cuts include 10x Genomics, a gene-sequencing company, and lab equipment businesses Standard BioTools and Pacific Biosciences, according to Jefferies.
“Yes, there are headwinds right now,” Jacob Thaysen, chief executive of Illumina, a gene-sequencing company, said in May, referring to US budget cuts. He added, “I do believe this is a short-term or temporary headwind and will come out on the other side stronger.” An Illumina spokeswoman added, “We are working with policymakers to advocate for the preservation of critical research funding.”
