Trump budget cuts could cost pharma industry billions in lost drug revenue, warns CBO
The Trump administration's 2026 budget proposal includes deep cuts for scientific research, including $18 billion in cuts from the NIH's funding, a 40% reduction.
In a letter responding to a request from congressional Democrats, CBO Director Phillip Swagel said the nonpartisan agency estimates a hypothetical 10% cut in the NIH's funding of preclinical research would reduce the number of drug candidates for phase 1 clinical trials over 30 years, starting with one fewer drug in the first decade, nine in the second, and 20 in the third.
"CBO estimated that a reduction in the NIH's funding of 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," the letter said.
Preclinical research is the earliest stage of drug development, so the effects of funding cuts take longer to kick in.
CBO expects cuts to clinical trials, in which drugs are further along in development, to also reduce the number of new drugs and to take effect sooner, but did not provide an analysis.
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Congressional Democrats had also asked CBO to analyze the implications of reducing NIH funding by 35%-38% but the office said it had not determined whether historical data could reliably be used to do so.
CBO said it was updating its drug development model to address congressional interest in additional budget scenarios.
Democrats also asked the CBO to analyze the effects of a nine-month increase in U.S. Food and Drug Administration review times of new drug applications. The Trump administration has carried out mass layoffs at the agency, initially firing 3,500 employees, though some have since been rehired.
CBO found such a delay would lead to three fewer drugs entering the market in the first decade, and 10 fewer in both the second and third decades.
Delays in reviews would probably affect drug development in additional ways that CBO did not assess, the office said.
The Trump administration is proposing a $6.8-billion budget request for the FDA in 2026, representing a cut of around 5.5% from this year.
Reporting by Ahmed Aboulenein; Editing by Rod Nickel
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