Review: US Policy Impacts on Patient Care in H1 2025
Over the past six months, the American healthcare system has been thrown into turmoil. The current administration’s sweeping policies are poised to disrupt patient care, biomedical research, and the healthcare and life sciences industry on an unprecedented scale.
These developments threaten the very foundation of innovation, equity, public trust, and the financial viability of our sector. Below is a comprehensive review of the changes and why they demand urgent attention.
NIH Cuts: Undermining the Foundation of Innovation
On May 2, the administration proposed the largest cut to NIH funding in history, nearly $18 billion, slashing its budget from $45 billion to $27 billion and reorganizing it into five politically defined institutes. These changes eliminate research on “climate change, radical gender ideology, and divisive racialism” and abolish the National Institute on Minority and Health Disparities. Thomas Frieden, former CDC Director, warned: “Eliminating these efforts would reverse decades of progress.”
Even before this proposal, the NIH canceled nearly 800 research projects, including many focused on HIV/AIDS, COVID-19, vaccine hesitancy, and health equity, and imposed a controversial 15% cap on indirect costs, down from historical averages of 30–60%. Michelle Hoffmann of the Chicago Biomedical Consortium said: “Laboratories lose essential support for equipment, data systems, compliance, and staff, making it harder to sustain early-stage innovation.”
The administration also ordered an NIH funding freeze, temporarily stalling $1.5 billion in grant applications, and canceled funding for the nationwide Diabetes Prevention Program (DPP), which had demonstrated a 58% reduction in type 2 diabetes risk. The freeze affected over 400 grants at institutions such as Columbia University and Harvard, where stop-work orders left researchers scrambling to save animal models and patients deprived of access to clinical trials.
FDA and Clinical Research: Undermined Oversight and Diversity
The FDA has quietly removed its draft guidance on diversity in clinical trials from its website, following an executive order to dismantle DEI programs. The guidance had required sponsors to submit Diversity Action Plans (DAPs) to improve inclusion of underrepresented populations in clinical studies. The removal creates uncertainty for sponsors and raises concerns about whether the FDA can meet its statutory June 2025 deadline for final guidance. Historically, underrepresentation in trials has led to less generalizable findings and worse outcomes for minority groups.
The FDA has also faced scrutiny over its accelerated approval pathway. An Office of Inspector General report criticized the agency for undocumented meetings with sponsors, delayed confirmatory trials, and approval of potentially ineffective drugs at full price. Meanwhile, the FDA has introduced “Elsa,” an internal generative AI tool designed to improve efficiency, but the impact of deep staffing cuts remains a concern.
Massive layoffs, 6,000+ employees across NIH, FDA, and CDC, have come at a time of rising measles and bird flu cases, threatening to delay already backlogged drug approvals and reduce oversight of drug safety.
Attacks on Diversity and Equity in Research
Beyond funding cuts, the administration has dismantled programs and projects aimed at closing the efficacy-effectiveness gap, the discrepancy between trial outcomes in homogeneous populations and real-world outcomes among diverse, comorbid patients. Projects eliminated include studies on Alzheimer’s in Black Americans, Latino precision medicine, and Asian bipolar genetics. Former Princeton President Shirley Tilghman observed: “You cannot eliminate a segment of the population by executive order, but you can harm them greatly.”
These changes have triggered a chilling effect in academia. Nearly 1,900 scientists signed a public statement describing a climate of fear where researchers censor themselves, strip language from proposals, and abandon controversial projects to avoid retaliation.
Budget Cuts and Layoffs Plague the System
The proposed budget would cut CDC funding by nearly half to $4 billion, eliminate its HIV prevention division, and gut programs addressing diversity, injury prevention, and health equity. The CDC’s HIV prevention division, critical for tracking infections and promoting testing, is under threat of elimination, potentially increasing HIV incidence among vulnerable populations.
Simultaneously, cuts at SAMHSA (including a 10% workforce reduction) threaten progress in the opioid crisis despite extending the public health emergency declaration.
The administration also withdrew U.S. funding and participation from the World Health Organization (WHO), undermining access to global health surveillance and pandemic preparedness.
At the same time, NIH-funded research, which generates $2.46 of economic activity for every dollar contributed, is being curtailed, threatening U.S. competitiveness and job creation in pharmaceuticals and biotechnology.
Drug Pricing: Revenue Under Siege
The administration’s Most Favored Nation (MFN) drug pricing model proposes to slash U.S. prescription drug prices by 30–80% by pegging them to the lowest prices paid in certain OECD countries. This directly targets branded drugs without generic or biosimilar competition.
Industry leaders warn this would lead to fewer treatments and cures, jeopardize hundreds of billions in R&D investment, threaten jobs, and increase reliance on China for innovation. Industry estimates project up to $1 trillion in lost revenue over a decade, and legal challenges are already underway.
In addition, the administration eliminated three drug pricing models under the Center for Medicare and Medicaid Innovation (CMMI) that aimed to cap generic drug costs and reduce costs of cell and gene therapies.
Access to Care: Millions at Risk
The proposed House budget resolution seeks to cut approximately $880 billion from Medicaid over the next decade, forcing states to reduce benefits, tighten eligibility, and impose work requirements. This would jeopardize care for nearly 80 million Americans, including low-income families, seniors, and children, while straining hospitals and clinics that depend on Medicaid reimbursements.
An executive order rolled back Affordable Care Act (ACA) provisions that extended enrollment periods and funded outreach, potentially reversing gains in coverage for 24 million Americans.
Other rollbacks include weakening mental health parity, challenging the ACA’s preventive services mandate, and retracting CMS guidance covering health-related social needs (HRSNs) such as housing and nutrition support for Medicaid and CHIP beneficiaries.
What the Life Sciences Industry Must Do
These actions threaten not just public health but also the viability of the future of the U.S. as a global leader in medical innovation. Leaders must act decisively to:
Engage lawmakers and regulators to advocate for balanced, evidence-based policies.
Reaffirm commitments to diversity in trials and research, even absent federal guidance.
Prepare for litigation and compliance challenges, especially regarding pricing and NIH funding shifts.
Educate the public and policymakers about the risks these changes pose to patients and innovation alike.
Diversify funding strategies by strengthening partnerships with academia, philanthropy, and venture capital.
Conclusion
The administration’s policies have thrown the healthcare system into chaos, undermining the research ecosystem, stalling drug development, halting clinical trials, and risking the lives of patients who depend on innovation. Cuts to NIH, CDC, and FDA funding jeopardize the very pipeline that fuels drug discovery, threaten public trust in our products, and risk the global competitiveness of U.S. pharma.
The coming months will be critical. The choices we make today, to defend innovation, and protect patients, will shape the future of healthcare for generations to come.
