In the lineup of federal government agencies, the National Institutes of Health (NIH) is like Dodger star Shohei Ohtani: winning comes by swinging for the fences.
NIH is the all-world superstar of biomedical research. It has funded 174 Nobel laureates over the last 100 years. It has been seminal to medical breakthroughs including open heart surgery, organ transplantation, cancer cures and gene therapy. Historically, NIH has been one of the most successful and popular federal programs, and has drawn strong bipartisan support on Capitol Hill.
But big hits also mean strikeouts—as Ohtani can attest—and that may be working against the agency. The Trump Administration is seriously considering a 40% cut to NIH as part of the 2026 budget request. Some in the Administration see research whiffs as wasteful, but they are missing the bigger picture. If they care about the health of Americans, they need to quickly reverse course. The baseball analogy is apt: You can’t expect the Dodgers to win the World Series again if their payroll is suddenly cut by 40%.
It is a mistake to believe that the private sector can step up to the plate to replace NIH funding. The biomedical sector strikes out often as well. Only 20% of early phase clinical studies result in an approved drug, although the success rates go up when industry collaborates with academia. In economic terms, NIH and the biomedical industry do not substitute for each other; they are complements.
The NIH may be the best example of a successful public-private partnership. Every dollar of NIH spending has been shown to stimulate an additional $2.56 in private sector R&D. This is a remarkable return, and it is why the United States has the world’s most successful biotech and pharmaceutical industry. It is also the reason the U.S. market often gets first crack at new treatments.
The biomedical equivalent of a home run is getting FDA approval. Doing so requires clinical research. Research has shown that a 40% cut in the NIH budget would result in 18% fewer drugs entering clinical testing after a decade. The FDA approves only about 30 drugs a year, so these NIH cuts would result in about six fewer marketed drugs annually.
To put this in perspective, a major critique of the Inflation Reduction Act (IRA) —which allowed Medicare to negotiate drug prices for a subset of marketed drugs—was that it would stifle biomedical innovation. The Congressional Budget Office calculated that the IRA provisions would result in 13 fewer drugs being brought to market over the next 30 years. This loss of innovation from drug price negotiation was a major concern for legislators and the primary source of opposition to Medicare negotiating lower drug prices.
The contemplated NIH budget cut makes the deleterious effects of the IRA look trivial. Over the same 30-year window, if the Trump policies are enacted, and nothing else changes, we would have around 100 fewer new drugs, by our calculations.
The reality is that between the IRA and the NIH budget cut, we are putting one of America’s most strategic industries at risk. And none of this accounts for losing the economic multiplier effect of NIH funding in the form of biotech and pharmaceutical venture capital and high-quality, biomedical jobs.
Surely that is not what the Administration wants as a legacy. Newly-appointed NIH Director Jay Bhattacharya saw the real problem five years ago in his research when he found that NIH had become too conservative in its funding priorities.
Restoring “cutting-edge research” should be a priority for him and the Administration. They only have to look back to the Great Recession for inspiration. NIH’s grant making at that time was boosted by $10 billion. These dollars largely went to increase the number of “R01” grants, which are the primary source of funding for most medical researchers and led to a boom in biotech funding over the next decade.
Were all these grants successful? No. But many were game changers for conditions Americans previously thought intractable—including cancer, Alzheimer’s disease, and obesity. Now is the time to once again swing for the fences rather than forfeit the game.
Dana Goldman is the founding director of the USC Schaeffer Institute for Public Policy & Government Service and an NIH grantee. Bob Kocher is a nonresident senior scholar at the USC Schaeffer Institute and former Special Assistant to the President for Healthcare and Economic Policy, 2009-2010.
