BREAKINGVIEWS-Life sciences undergo painful genetic modification

By Robert Cyran

NEW YORK, April 2 (Reuters Breakingviews) - Medical researchers helped tame a worldwide pandemic, but they may be powerless against the financial disease rapidly spreading from Washington. The Trump administration’s sweeping budget cuts are hitting agencies that fund research and approve new drugs, including the U.S. Department of Health and Human Services now led by vaccine skeptic Robert F. Kennedy Jr. The immediate implications pale next to the longer-term costs from delayed therapies or ones never developed.

The United States devotes more money to R&D than any other country. In 2021, the figure was more than $800 billion, according to the National Science Board, or about 20% more than number two China. The U.S. government directly accounted for about $160 billion, but it’s responsible for so much more. Profit-seeking funders are reluctant to invest in so-called basic, or earlier stage, research, where the potential payoffs are hazy and distant. U.S. taxpayers supply 40% of this spending.

Among the 10,000 layoffs planned at U.S. health agencies are top scientists at the Food and Drug Administration and Centers for Disease Control and Prevention. Moreover, after Team Trump slowed research grant approvals to a near standstill, it sought to freeze $4 billion, or 10%, of the National Institutions of Health’s budget to support scientific developments. States, universities and others have sued to block the decision.

Early victims were vendors of laboratory tools and supplies. Illumina ILMN.O, the genetic sequencing specialist, has lost about half its market value since the U.S. election in November, thanks to softening lab demand and Chinese sanctions from a spiraling trade war. More diversified companies, such as Thermo Fisher Scientific TMO.N, also suffered, but less so. Becton Dickinson BDX.N may have to accept a discounted price tag on the chunky biosciences and diagnostics business it’s trying to offload.

Broader pain is yet to come, however. If U.S. government basic research dries up, much of it will go unreplaced. NIH funds contributed to more than 99% of the drugs approved for sale between 2010 and 2019, according to one recent study.

Warnings from the scientific community are also harrowing. Former FDA Commissioner Robert Califf warned that the agency “as we’ve known it is finished” because of the hollowing out underway. Peter Marks, who ran the vaccine approval unit, wrote in his resignation letter that Kennedy simply wants “subservient confirmation of his misinformation and lies.”

His departure and comments alone led to a 9% loss in market value for Moderna MRNA.O, which is helping lead the development of messenger RNA technology. There’s a serious risk, however, that more chronic financial problems will debilitate the entire life sciences organism.

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CONTEXT NEWS

The Trump administration on April 1 began laying off 10,000 workers at U.S. health agencies, with more than 70% of them targeting staff at the Centers for Disease Control and Prevention, the National Institutes of Health, and the Food and Drug Administration.

Among the cuts are top scientists responsible for approving vaccines and pharmaceuticals. Peter Stein, director of the Office of New Drugs in the FDA’s Center for Drug Evaluation and Research division, resigned when faced with being fired, Reuters reported on April 1, citing an unnamed source.

Peter Marks, director of the Center for Biologics Evaluation and Research, resigned on March 28. In his resignation letter, he said newly installed U.S. Secretary of Health and Human Services Robert F. Kennedy Jr. wants “subservient confirmation of his misinformation and lies.”