The Executive Order (EO), "Improving Oversight of Federal Grantmaking," issued on August 7, 2025, represents a significant departure from the traditional, science-driven grant review process and towards a system characterized by political and fiscal control alongside ideological criteria aligning with the administration's policy priorities. Though framed as an effort to enhance accountability and ensure taxpayer value, the EO introduces significant challenges and uncertainty for the health research community, including those seeking funding from agencies like the National Institutes of Health (NIH) and Agency for Healthcare Research and Quality (AHRQ). While the EO gives the president significant power to direct executive agencies, it does not create new or change existing law. As such, this power is constrained by the Constitution, subject to judicial review, and can be limited by Congress.
EO Introduces Four Major Changes to Federal Health Funding
There are four major changes to highlight including centralized political oversight, ideological restrictions, financial controls, and termination for convenience.
The most dramatic change is the centralized political oversight, which requires a senior political appointee in each agency to approve all discretionary funding announcements and awards. While agency leadership has always maintained the ability to make final funding decisions, the EO now gives agency leaders the power to override the recommendations of expert peer review panels.
The second key component is the introduction of ideological restrictions, which explicitly prohibits using federal funds for research that, promotes "racial preferences," denies “the sex binary in humans," or supports illegal immigration. This change has the potential to gut critical research areas, such as interventions aimed at mitigating health inequities, gender-affirming care, and initiatives for promoting trust in research or care delivery among historically under-researched or underserved communities. This ideological filter creates a substantial barrier for achieving evidence-based, patient-centered care, particularly in communities disproportionately affected by poor health outcomes. It directly hinders our ability to transform our healthcare system into one that "meets people where they are," giving everyone equal opportunity to live their healthiest lives.
Third, the order also tightens financial controls by directing agencies to favor institutions with lower indirect costs (IDC) rates and introducing limits on IDC amounts. Indirect costs are the essential overhead that universities and research centers rely on to keep the lights on and labs running—covering everything from administrative support to electricity and maintenance. By discouraging these reimbursements, the EO could put significant financial strain on institutions, especially those with large, complex research programs. The EO also introduces enhanced reporting to support funding drawdowns, increasing administrative burden while constraining the IDC rates designed to correspond with such burdens.
Finally, the inclusion of a "termination for convenience" clause in all grant agreements, in alignment with government contract regulations, introduces a new level of instability. This provision allows an agency to cancel a grant at any time if the project is deemed to no longer align with national priorities. When coupled with the provision for senior political appointees to review grants on an annual basis and the increased level of progress reporting tied to draw downs, the possibility of seeing increases in early grant terminations is not insignificant. For researchers who often work on multi-year, large-scale projects, this could mark a career-threatening risk that could halt groundbreaking studies mid-stream.
Acknowledging the Need for Reform
While the EO’s approach raises concerns, it is important to acknowledge that the federal grantmaking system has long needed reform. The system has become overly bureaucratic, and many researchers spend an inordinate amount of time on complex applications and reports, time that could be better spent on science. The EO’s goal of simplifying language in applications is a good idea. For years, the federal grant application process has been a labyrinth of jargon and complex forms that can be a significant barrier, especially for new researchers or institutions with fewer resources. A move toward clear, plain language could, in theory, broaden the pool of applicants and reduce the administrative burden.
Similarly, the focus on reducing the concentration of funding among "a select group of repeat players" addresses a valid concern. While major institutions have the infrastructure to support large-scale research, this can sometimes create an ecosystem where it is difficult for smaller institutions, minority-serving institutions, or early-career researchers to break through. A well-designed effort to diversify funding recipients could foster new ideas and talent across the country.
However, the EO's approach imposes top-down, unilateral changes that prioritize political control over scientific expertise. True reform requires dialogue with the research community, not a mandate. It needs to be a careful, deliberate process that simplifies the system without compromising its integrity.
Anticipated Impacts include Stifled Innovation, Limited Capacity and Less Impactful Science
The ripple effects of these changes are likely to be felt across the entire health research ecosystem. The most immediate impact is the injection of political involvement in scientific decisions. Research that is scientifically sound but ideologically out of favor could be defunded, leading to a chilling effect where researchers self-censor or avoid sensitive but important topics. This could stifle innovation and hinder our ability to address complex public health challenges while leaving historically marginalized or underserved populations with even less support and worsened outcomes.
The move to cap indirect costs could be a financial blow to institutions. In April, a federal judge permanently blocked the indirect cost caps on research grants. The NIH is now appealing. Universities and medical centers, already operating on thin margins, may be forced to scale back their research infrastructure, reduce hiring, or pass the financial burden onto their own budgets. This could ultimately undermine the capacity of the U.S. to maintain its standing as a global leader in health research.
Furthermore, the new funding continuity uncertainty may deter researchers from pursuing high-risk, high-reward projects that require long-term investment. This could favor short-term, incremental research over the kind of ambitious, foundational science that has historically led to major breakthroughs like vaccines and new cancer treatments.
Steps to Navigate the New Funding Landscape
Navigating this new landscape requires a blend of pragmatism and strategic thinking. While the challenges are daunting, there are steps you can take to adapt and thrive.
- Diversify your funding sources. Don’t rely solely on federal grants. Explore opportunities from private foundations, state grants, and industry partnerships, which may have fewer administrative burdens and be more open to funding topics the EO restricts.
- Strengthen how you communicate your work. Align with the new "plain language" directive and ideological criteria without compromising the scientific integrity of your work. Frame your proposals using accessible language, clearly delineate the societal benefits, and demonstrate alignment with the administration's stated goals for "Gold Standard Science." AcademyHealth’s Communicating to Build Trust course offers practical strategies for sharing evidence in ways that resonate while maintaining scientific integrity.
- Leverage your institution and community. Engage with your institution's grant and legal offices to understand the EO's implications. Advocate for scientific independence through professional societies and organizations. Building a robust network of collaborators is crucial for sharing knowledge and securing diverse funding sources.
- Understand and stay current on policy shifts. A strong grasp of the policy environment helps you anticipate challenges and spot opportunities. Resources like AcademyHealth’s Health Policy Orientation, the members-only Town Hall Meeting on September 17, and our Situation Report newsletter are designed to keep you informed and connected.
This EO has the potential to usher in a dramatically new era for health research in the US, but experts are expecting legal challenges. While it is important to highlight that major shifts to the funding landscape are not guaranteed by the EO’s language alone, it does lay the groundwork for a system that moves away from science-driven, merit-based selection toward one driven by political considerations. The path forward is uncertain, but by adapting strategies, diversifying resources, and continuing to advocate for the value of science, researchers can work to mitigate the potential damage and continue to pursue research that improves care and outcomes for all.