By Kritika Agarwal
A permanent 10% reduction in federal funding for the National Institutes of Health would lead to fewer drugs coming to market, finds a new analysis by the Congressional Budget Office. The report makes clear that, if Congress advances the Trump administration’s proposed cuts to the agency, Americans will pay a steep price with their health in the years ahead.
The Trump administration is currently proposing reducing the NIH’s budget by nearly 40%. CBO conducted the analysis in response to a request by lawmakers seeking to assess the impact of these proposed cuts.
CBO estimated that a reduction in federal funding for the nation’s premier medical research agency would negatively affect preclinical research done by external organizations, including universities. This research takes place before clinical trials on promising drugs can begin. As the CBO explains, preclinical research “seeks a better understanding of biological mechanisms that may later inform the development of new drugs” and “initially tests the effectiveness of potential new drugs in treating diseases and medical conditions.”
The CBO estimated that even a 10% reduction in NIH funding for external preclinical research “would ultimately decrease the number of new drugs coming to market by roughly 4.5 percent, or about 2 drugs per year.”
According to the CBO, in 2020, the NIH spent $43 billion on research and development, 80% of which went to preclinical research that is largely conducted at universities. (The remaining 20% supported internal R&D activities at the NIH.) A recent study found that “NIH funding contributed to research associated with every new drug approved from 2010-2019.”
CBO noted that, while the reduction in new drugs coming to market would not happen immediately, “the impact of the reduction in funding would grow over a 30-year period and would take full effect in the third decade after the reduction began.”
The office did not assess the effects of “reductions in other components of the NIH’s budget” but stated that those cuts “would further decrease the number of new drugs coming to market.” It also did not analyze the implications of cutting the NIH’s budget by 35-38% as is being proposed by the administration.
The CBO report is clear: short-term budget savings from cutting NIH funding would come at a staggering long-term cost to American health and innovation.
Kritika Agarwal is assistant vice president for communications at AAU.