NIH Bloodletting, U.S. Scientific Community Devastated: Is the Trump Administration Abandoning the Future of Biopharma?

On April 16, a leaked draft of the 2026 budget plan revealed a proposed $20 billion cut to the NIH (National Institutes of Health), with plans for a full consolidation of the institution. Previously, a proposal by Republican lawmakers had suggested reorganizing NIH’s 27 institutes and centers into 15. On April 10, the U.S. Office of Management and Budget proposed an even more aggressive plan: reducing NIH to just 8 institutes.

This year has been turbulent for public health services and basic biomedical research in the U.S., with the NIH — which receives $40 billion annually — becoming a primary casualty.

Additionally, according to emails obtained by STAT, the U.S. General Services Administration required the NIH to reduce personnel contract spending by 35% by April 8. This led to the layoff of 1,200 NIH staff, including institute directors and lab heads.

Scientists who rely on NIH funding are also severely impacted. A postdoctoral researcher at a U.S. state university recalled how the lab once had seven people, each managing a project with so many mice they couldn’t fit in one room. Since the NIH budget cuts, “It’s now just me and the lab head couple. We’ve euthanized hundreds of mice due to lack of funding — less than a fifth remain.”

In Trump and his supporters’ narrative, targeting the NIH is justified by the U.S. fiscal deficit crisis and public institution overspending. From a conservative perspective, many NIH projects tied to DEI (Diversity, Equity, and Inclusion) initiatives are seen as socially inefficient, especially in the context of U.S.-China competition.

But is this really the case? Some local scientists offer different perspectives.

A U.S. biopharma investor argues the policy stems from the government’s view that it gains little return from funding biomedical research. NIH’s early-stage research investments are risky — up to 90% could fail — while private capital profits from later stages. The government sees itself as footing the bill unfairly and wants to reshape funding models.

However, this shift disrupts market balance. “Small companies will be hit hardest, leading to undervalued early-stage and overvalued clinical-stage projects. Without NIH backing early-stage work, investors, being profit-driven and risk-averse, will avoid early ventures and chase clinical ones,” the investor said. Over time, early-stage clinical projects may dwindle, harming the health of the market ecosystem.

The entire biotech ecosystem is also affected, especially startups reliant on SBIR (Small Business Innovation Research) grants. A professor at MIT noted, “These companies already struggle for federal funding. Now, they must rely entirely on venture capital.”

This policy will also cause real public losses. Bloomberg found nearly 40% of canceled R01 grants (typically five-year NIH awards) had not yet yielded results — meaning previous investments won’t benefit the public.

So far, NIH cuts have already harmed many projects and researchers. In a few years, the long-term damage to North America’s biopharma industry could be irreversible.

Conflict with Universities

In February, the Trump administration announced a reduction in indirect cost rates for NIH grants from an average of 60%-70% to just 15%, aiming to save $4 billion annually.

Though total research funding appears unchanged, this “disguised austerity” has sparked outrage in academia.

“If I get $1 million from NIH, the school used to receive $600k-$700k to support lab operations and administration. Now it's only 15%,” said the MIT professor. “The funding amount remains, but schools get much less, making it hard to maintain lab support.”

This affects project efficiency and threatens the sustainability of university research. Some universities have frozen hiring and halted new projects. “Without money, you can't hire. There won’t be layoffs for now, but no new staff can be added.”

In March, a preliminary injunction by U.S. District Judge Angel Kelley in Massachusetts temporarily blocked the policy. That same month, the Trump administration cut $400 million in federal funding and contracts to Columbia University over its handling of campus antisemitism. On March 12, NIH terminated around 400 grants to Columbia and ordered associated researchers to stop work.

By April, more universities became entangled.

On March 31, the Departments of Education, Health and Human Services, and General Services Administration announced a review of $255.6 million in contracts and $8.7 billion in multi-year funding commitments between the federal government and Harvard University and affiliates. The trigger was student protests similar to those at Columbia.

On April 14, Harvard President Alan M. Garber emailed the university community stating it would reject multiple federal demands, including: dismantling DEI programs, restricting student protests, and accepting comprehensive federal oversight.

This series of events suggests the NIH policy, though initially framed as a move to reduce biopharma research waste, has veered off course.

Academia, particularly vocal on DEI, has become a primary target of this "rectification."

The same postdoc commented, “The entire U.S. academic world is in a deep freeze. Funding cuts are severe — not only is it hard to find people, some with postdoc offers have had them rescinded due to lack of money.”

A public health PhD candidate noted that since February, NIH grant reviews are significantly delayed. “It used to take 2–3 months; now many are stuck in review for over six months.”

Typically, NIH funding decisions follow reviews by two independent expert panels. But on January 22, their activities were indefinitely suspended. Though resumed in April, meetings were shortened from eight hours to just a few, severely slowing funding decisions.

The Overlay of U.S.-China Tensions

Among researchers, Chinese individuals studying or working in North American academia feel these changes most deeply.

The aforementioned postdoctoral fellow joined the lab in XXXX. Between 2022 and 2025, only three Chinese researchers were newly hired at the medical center. “In the past, one lab could have ten Chinese researchers a year,” he said.

Not only has recruitment slowed, but obtaining funding has also become significantly harder for Chinese scientists. “Previously, grants like the K99 could be applied for without a green card. Now, it’s nearly impossible. Many young Chinese postdocs and junior faculty are stuck.”

For a long time, China has been one of the largest sources of international students in U.S. universities, many of whom specialize in biomedicine. A 2019 National Science Foundation report noted that Asians made up 31% of life sciences PhD and postdoc populations, 21.3% of faculty, and 12.3% of tenured professors — many of whom are of Chinese descent or nationality.

Just days ago, on April 2, the NIH announced a ban on researchers and institutions in six countries, including China, from accessing its “controlled access data repositories,” including critical biomedical resources such as the dbGaP (genotype-phenotype database) and the AnVIL genomics cloud platform.

This means that with increasing restrictions on U.S.-China scientific collaboration — coupled with funding cuts — many NIH-dependent international research projects will likely be interrupted, and cross-border academic-industrial cooperation will become even more difficult.

The postdoc predicted, “After the database blockade, reagents may also be cut off. When that happens, China’s scientific research will face many fundamental bottlenecks.”

He explained the phenomenon this way: “The global research system’s momentum is fading. The last 40 years were built on globalization and the wage gap between China and the U.S., which fueled economic prosperity. Only with prosperity can you afford R&D, which has a near-zero return on investment.” Now that this gap is closing, the conditions that once enabled prosperity are vanishing.

From a competition standpoint, NIH’s retreat might not be entirely bad for China. As the U.S. reduces early-stage research, China could fill the gap and advance its biomedical capabilities.

However, from a collaboration standpoint, sustainable progress in funding, talent, technology, and market development requires globalization. Even if China overtakes the U.S. in early-stage research, it may not translate into practical success without broader collaboration.

A Forsaken Biopharma Future?

In contrast to the Trump administration’s austerity toward biopharma, it has poured massive investments into the AI industry.

The investor mentioned earlier noted that after setbacks in biomedical research, most early-stage U.S. projects are now AI-focused, with AI accounting for 80% of total investment. “AI has the potential to treat human diseases. Investors are betting on AI startups, but because there are so many and individual investments are small, fundraising remains difficult.”

The postdoctoral fellow also believes AI might be the key to a new technological breakthrough. Since Trump’s return, the government has guided capital into AI through massive funding. In January, Trump announced the “Stargate” AI infrastructure plan from the White House. This initiative, launched by a joint venture involving OpenAI, SoftBank, and Oracle, aims to invest $100 billion initially, with $500 billion planned over four years to build AI infrastructure like data centers in the U.S.

“Trump isn’t cutting budgets aimlessly — he’s pulling back to launch a full-strength punch. And that punch isn’t landing on biopharma but on AI and space tech,” the postdoc said. “If those breakthroughs happen, humanity enters a new stage. But we might also fall just before dawn. We face massive uncertainty, with both opportunity and risk.”

Still, the future of biopharma — seemingly abandoned by the Trump administration — determines the present for many people.

From the administration’s perspective, NIH-funded DEI-related issues are irrelevant to science and thus wasteful. But the public health PhD student disagrees. “Many medical and biological issues are inherently tied to DEI factors like gender, income, and race,” he said.

Now that these topics are no longer prioritized, disease prevention and treatment are also impacted. “It’s harder to get funding for DEI-related topics now. Many have to restructure proposals, but some research simply can’t ignore DEI elements.” The costs NIH no longer bears will inevitably be absorbed elsewhere in the system — shifting burdens onto other parts of society.