MassBio’s new report outlines several concerns, including NIH cuts undermining the research engine, FDA reductions delaying innovation and trade barriers disrupting supply chains.
Recent federal actions including large-scale FDA staff reductions and deep cuts to National Institutes of Health research could severely disrupt the U.S. biotech ecosystem, especially in Massachusetts, according to a MassBio report released May 6. The trade organization said that without “swift corrective action,” the country risks losing its global leadership status in life sciences, imperiling thousands of high-skilled jobs, billions in economic output and access to breakthrough therapies for patients.
In the announcement about the report’s findings, MassBio CEO and President Kendalle Burlin O’Connell noted the seriousness of the situation.
“This analysis makes clear that without policy stability and renewed investment, we will cede leadership in a sector that defines the future of medicine, creates high-wage jobs, and safeguards our economic and national security,” O’Connell said. “There is a real urgency in this because many of these impacts will be hard to reverse.”
MassBio’s key report findings include NIH cuts undermining the research engine, FDA reductions delaying innovation and trade barriers disrupting supply chains.
NIH Funding Cuts Impact Early-Stage Research, Job Creation
Regarding NIH budget cuts, MassBio said recent reductions jeopardize early-stage research as well as downstream clinical capacity.
Since January, more than $2 billion in research grants have been cancelled, CBS News reported in late April. President Donald Trump’s recently proposed federal budget for fiscal year 2026 would cut the NIH budget by about $18 billion, or 40%. It would maintain $27 billion for research.
In addition to affecting early-stage research and downstream clinical capacity, MassBio also connected NIH budget cuts to job creation in Massachusetts. The organization noted that every $1 million of NIH funding creates 8.2 jobs in the state.
Job creation in Massachusetts could be especially important moving forward given findings from an April 29 U.S. Bureau of Labor Statistics report. BLS noted that the Boston-Cambridge-Newton area’s March unemployment rate of 4.5% topped the 4.2% national average and was a full percentage point higher than the previous year.
FDA Cuts Affect Review Times, Next-Gen Therapies
MassBio also highlighted the impact of FDA staff cuts. The agency’s workforce reductions have lengthened review times, increased regulatory costs and disproportionately affected next-generation therapies, threatening to cede U.S. leadership in innovation, according to the organization.
Shortly after 3,500 FDA staffers were let go in early April, regulatory experts predicted delayed drug approvals. Slowed review times include the FDA missing a deadline in late April involving Stealth BioTherapeutics’ new drug application for its investigational drug, elamipretide, for Barth Syndrome.
To illustrate the backlog FDA reviewers may be facing, the MassBio report cited a Reuters article from late March. Reuters reported that some scientists had been assigned double the number of new product applications for review after colleagues were let go in February—prior to the agency’s latest significant cuts.
Among 88 biopharma firms MassBio surveyed for its report, 67% of respondents were “highly concerned” the most recent workforce reduction will delay drug approvals. In addition, 50% reported feeling at least one impact from the FDA’s staff cuts. The most affected phase of development was preinvestigational new drugs, according to 43% of respondents.
Pharma Tariffs Could Stall Product Launches
Regarding trade barriers, MassBio noted that with more than 70% of active pharmaceutical ingredients in the U.S. imported, new tariffs could delay product launches. Half of all biotechs would need to slow down regulatory filings to find new partners, according to the organization.
Trump’s first pharma tariff threat came in February, when he told industry leaders they could face additional duties on their products unless they relocated manufacturing operations to the U.S. In mid-March, the U.S. Department of Commerce started investigating the importation of pharmaceutical products and the potential national security threats posed by the global supply chain.
Since Trump’s initial tariff threat, seven companies have announced significant investments in U.S. manufacturing.
In its report, MassBio cited multiple potential impacts for proposed pharma tariffs of 25% or higher, including research and development cuts at large pharmas and reduced capital flow for biotechs.
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