Federal appeals court judges’ questions and comments during a hearing Wednesday suggested they may be skeptical of some of the Trump administration’s central arguments in a lawsuit challenging its proposed changes to research overhead payments.

The case revolves around a multi-billion-dollar question: Did the National Institutes of Health, the nation’s premier funder of biomedical research, violate federal law in an announced plan to slash support for research overhead?

The plaintiffs, which include 22 states as well as universities and academic groups, allege that the NIH policy seeking to cap overhead payments, currently blocked by a lower court ruling, is “arbitrary and capricious” and thus violates the Administrative Procedure Act, a law that governs how federal agencies implement ne

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