Dive Brief:

• Funding cuts for medical research at academic medical centers across the country are causing health systems to reduce lab headcount and pause hiring.
• The funding cuts, first announced last month, attempt to cap National Institutes of Health reimbursement for indirect research costs at 15%. They are currently on pause while being being challenged in court.
• Still, researchers are bracing for some form of cuts to be put in place. When that happens, they say it will disrupt medical research — breaking a critical pipeline of innovation and discovery necessary to fuel advancements in patient care.

Dive Insight:

Last month, the NIH said it would cut roughly $4 billion in annual funding for indirect research costs by capping reimbursement for such expenses for current and new grants. Previously, reimbursement rates averaged between 27% to 28%, according to the agency.

Provider groups have spoken out against the cuts, saying providers depend on research to bolster care quality. A spokesperson for the Washington State Hospital Association said reduced federal grant support could hinder research on opioid addiction prevention or rural staff training, for example.

The Children’s Hospital Association said funding cuts will limit effective diagnostics and threaten “the ability of children’s hospitals to provide future groundbreaking cures for children.”

Much of the nation’s cutting-edge medical research happens at leading universities and academic medical centers. Academics say cutting funding for their teams will lead to ripple effects in patient care for years to come, with innovative treatments taking longer to show up at the bedside.

“Thirty percent of all [cancer] medicines that we currently have right now that help you and me… were invented and created by academics. And so to have that go away… looking to the future, it’s making a third of all the medicines that could be just disappear,” Jordan Green, professor of biomedical engineering, ophthalmology, oncology and neurosurgery at Johns Hopkins told Healthcare Dive. “It’s going to have profound effects on lives.”

Already, some projects have been put on hold. Green, who is named on seven NIH grants, said one of his projects evaluating a treatment for tumors has received a stop work order. Getting going again could take months, according to the researcher, which could translate to “years” of delays before the cancer treatment is ready for patients.

Researchers at the University of North Carolina and the University of Michigan have likewise received stop work orders, spurring the University of Michigan to set up alternative funding for projects that directly impact patients. However, the program is not designed to provide long term support.

The looming disruptions to research are already forcing some teams to make tough financial decisions.

Stanford University, the University of California and Harvard University have frozen medical researcher hiring, citing funding uncertainty.

Jonathan Teyan, Associated Medical Schools of New York CEO and president, told Healthcare Dive layoffs could come soon in New York, which is home to 17 medical schools, and the state stands to lose at least $630 million annually from caps to indirect research costs.

The funding cuts “will almost certainly result in lab closures, laying off scientists and support staff and fewer career pathways for scientists in the U.S.,” Teyan said.

Johns Hopkins University — which received the most funds from the NIH last year out of any U.S. entity — will offer fewer slots for incoming doctorate students, according to Green.

He said it is the first time in his 16-year tenure that his lab will contract in size, and he expects the incoming class to be the smallest he’s seen in “at least a decade.” Green said the cuts could spur a “brain drain,” in which talent moves overseas to find better opportunities. 

Ultimately, the NIH cuts seem “short sighted,” according to Green.

“In the past, this idea of biomedical research has been very bipartisan — cancer doesn’t care if you’re in a red state or a blue state, and we want to cure it,” said Green. “We’re in a state right now of growth and acceleration, where science is making tremendous improvements to patient care … and to just sort of pull the rug out, or take the gas out of the tank, when we have so much momentum, it’s very surprising, and it saddens me.”