Navigating the Future of Medical Research: Adapting to Funding Shifts and Policy Challenges

ACT: What should stakeholders have top of mind as they find new ways to effectively navigate and continue medical research?

Lanton: Things have definitely changed. I think that funding is now the biggest issue regarding the future of research. People need to get used to the idea of shifting from relying on federal grants for funding to exploring other possible sources.

Currently, there is a policy in place that caps indirect costs at 15%. When people ask what I mean by indirect costs, I’m referring to administrative costs, overhead, and regulatory compliance—factors that are included when determining the necessary funding. It used to be 50%. A company would calculate total costs, and then the government would provide 50 cents on the dollar for these indirect costs. Now, that’s been reduced to 15%, and unsurprisingly, lawsuits have been filed. As of now, the courts have halted it, but the agency has found other creative ways to push funding freezes. One particularly interesting approach was using the Federal Register. The Federal Register issued a notice freeze, which essentially halted the review of all grant proposals submitted to the NIH. This is significant because, for future applications to be considered, notices about upcoming meetings and their impact on research must be published in the Federal Register.

Stakeholders now have to seek new funding sources outside of the NIH, which will be incredibly challenging. They’ll need to turn to the private sector. But if everyone is turning to the private sector for additional funds, there could either be a chilling effect—where people stop planning certain projects—or so much competition that initiatives the NIH was working on won’t receive as much attention. Right now, we’re all just waiting to see how this unfolds.

Full Interview Summary: The future of NIH-funded research is facing significant uncertainty due to changes in funding policies under the new administration. A major issue is the reduction of indirect cost reimbursements, which cover administrative, regulatory, and overhead expenses, from 50% to 15%. This shift, currently halted by legal challenges, threatens research institutions’ financial stability. Additionally, a freeze on grant proposal reviews via the Federal Register has further complicated NIH’s funding process, requiring researchers to seek alternative funding sources, primarily from the private sector. However, this shift could create a highly competitive environment, potentially stalling critical research in areas like cancer and sickle cell disease.

Political challenges, including diversity-related restrictions, further complicate clinical trials. Researchers may now need to approach trial design with a more conservative lens, which could hinder studies focused on minority populations and vaccine development. If funding and regulatory barriers persist, the U.S. risks losing scientific talent to more research-friendly environments in the EU and Asia.

While some court rulings have temporarily allowed NIH to continue research funding, long-term solutions would require Congressional action. However, given the current partisan landscape, legislative intervention to secure NIH funding against political interference appears unlikely. If the administration defies court rulings, it could create a constitutional crisis, undermining the checks and balances of the federal government.

Beyond NIH, new reciprocal tariffs could disrupt the pharmaceutical supply chain, particularly for raw materials sourced internationally. Many commercial contracts include clauses that could be triggered, nullifying agreements and exacerbating supply shortages. Given the executive branch’s broad authority over trade policy, tariff changes could increase prescription drug costs and create economic instability. With Congress unlikely to reclaim tariff-setting power soon, the full impact remains uncertain, necessitating a “wait and see” approach.

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