Big Pharma Has a Trump Problem

President Donald Trump's clamp-down on federal science funding has handed Big Pharma an existential headache: the National Institutes of Health (NIH) has terminated more than 2,100 research grants and contracts, according to NIH scientists, totaling around $12 billion in early-stage studies that drugmakers often rely on to seed the next generation of therapies.
In an open letter sent June 9 to NIH Director Dr. Jay Bhattacharya, Secretary of Health and Human Services Robert F. Kennedy Jr. and key lawmakers, 92 NIH scientists warned the sweeping cuts could shutter campus labs, hollow out the biotech talent pipeline, and push jobs and billions in investment overseas.
White House spokesman Kush Desai defended the administration's approach to federal research, telling the Associated Press that Trump is focused on restoring a "Gold Standard" of science, not "ideological activism."
Newsweek has contacted the White House, NIH, and HHS via email for comment.
University labs across the country supply Big Pharma with a constant stream of breakthrough ideas and a talent pipeline of PhDs who know how to turn them into therapies.
"The industry of biotechnology is built on advances in academic labs," Richard DiMarchi, a professor of chemistry at Indiana University, told Newsweek, adding that there was "no way large companies can sustain this level of creativity and productivity without a vibrant academic research community."
This mutually beneficial relationship can be seen in Eli Lilly's planned $250 million infusion into Purdue, AbbVie's oncology alliance with the University of Chicago, and Harvard-AstraZeneca stem-cell projects—plus dozens of smaller sponsored-research deals.
"Universities also train the next generation of scientists who work in drug companies," Eric G. Campbell, a professor of medicine and director of research at the CU Center for Bioethics and Humanities, at the University of Colorado, told Newsweek.
"Research has shown that financial interactions between academics and industry are ubiquitous in biomedical research, medical education and the practice of medicine in the U.S.," he added.
Cities like Boston and San Francisco have "emerged as major hubs for biotech and pharma because of the quality and concentration of biomedical research conducted at universities such as Harvard, UCSF and Stanford," Ulrich Mueller, a professor of neuroscience and biology and director of developmental neuroscience at Johns Hopkins University, Maryland, told Newsweek.
As a result, Big Pharma companies, such as Novartis and Pfizer, have established major research facilities in Boston "to be in proximity to the hubs of discovery," he said.
Venture funds in those cities have fueled an "astonishing local biotech ecosystem that provides a direct pipeline for pharma," Mueller said, and the major founders of these biotech companies are often professors from academic institutions that "want to translate findings from their research labs funded by the NIH into cures."
"This has been a major driver of the American biomedical enterprise but is on the verge of being destroyed," he said. The ecosystem of science and drug discovery in the U.S. is now "endangered."
"The pharmaceutical industry is not equipped with the brain power or expertise to conduct basic research," Michael A. Santoro, professor of management and entrepreneurship at the Leavey School of Business and the Santa Clara University, told Newsweek.
"Even if it was somehow possible for the pharmaceutical industry to pour more billions of dollars into basic research, the payoff for the investment would be less impactful than university-conducted research," he added.
As a result, Santoro said that he thought Trump's cuts to university research would result in the costs of new drugs rising "astronomically as that will be the only way the pharmaceutical industry can justify replacing university research with private labs."
He added that the U.S. would also experience a "brain drain" as "researchers look for opportunities abroad or perhaps drop out of the economy altogether."
"The U.S. is on the verge to lose its pre-eminence in biomedical research and drug development," Mueller said.
The "cracks are already appearing" Mueller warned. Pfizer has recently made a deal with 3SBio in China to develop cancer medicine, with an upfront payment of $1.25 billion with milestones potentially increasing the deal to $4.8 billion.
"The loss is devastating because it has wide ranging impacts also for local economies and the job market," Mueller said. "Intellectual property and the benefits to the U.S. will move to other shores together with major investment of pharma and venture firms in companies abroad."
An Eli Lilly spokesperson told Newsweek: "We understand cuts will likely impact the research these labs conduct, which is not positive for the biopharmaceutical research ecosystem. However, these cuts should not impact Lilly's ability to keep our own discovery engine going which is a key priority for our company."
Newsweek has contacted Merck & Co., AbbVie, AstraZeneca, as well as Novartis and Pfizer, via email for comment.
Santoro said that the Trump administration's actions towards medical research will also "affect the quality of health care generally."
"Physicians have an ethical duty to practice science-based medicine. Without scientific research at the university level, the quality of medical care will decline," he said.
More widely, the cuts could also have "societal consequences to the nation's health and economic prosperity," DiMarchi said.
"It's a delicate network that links translation of breakthrough university discoveries to drug development and registration at global pharmaceutical companies, and as such should be approached with a 'first do no harm mentality'," he added.
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