Cambridge, MA — May 6, 2025 — Deep cuts to NIH research, large-scale FDA staffing reductions and aggressive new trade barriers are some of the recent federal actions poised to severely disrupt the United States biotechnology ecosystem, especially in the leading cluster of Massachusetts, according to a new report compiled by the state’s trade organization MassBio. Without swift corrective action, the U.S. risks losing its global leadership in life sciences, imperiling thousands of high-skilled jobs, billions in economic output, and access to breakthrough therapies for patients.
The analysis, released today, outlines cascading impacts already rippling through the biotechnology value chain—from academic labs facing grant shortfalls, startups seeing venture capital retreat, clinical trials being postponed due to staffing cuts, and established companies reevaluating R&D and manufacturing plans. Funding deficits, regulatory slowdowns, rising supply chain costs, and investor retreat are converging to throttle innovation at a time when global competitors are rapidly gaining ground.
“Biotech is not just an industry—it’s a cornerstone of our state and national strength,” said MassBio CEO and President Kendalle Burlin O’Connell. “This analysis makes clear that without policy stability and renewed investment, we will cede leadership in a sector that defines the future of medicine, creates high-wage jobs, and safeguards our economic and national security. There is a real urgency in this because many of these impacts will be hard to reverse. MassBio is committed to supporting our members as they navigate this uncertainty and working with policymakers across the political spectrum to protect American innovation.”
Key findings of the report include:
- NIH cuts undermine research engine: Every $1 million in NIH funding supports over eight jobs and played a role in the development of 99% of drugs approved between 2010 and 2019. More than 20 million patients are treated annually with medicines developed with the support of NIH funding. Recent cuts jeopardize both early-stage research and downstream clinical capacity.
- FDA reductions delay innovation and increase costs: Workforce cuts have already lengthened review times, increased regulatory costs, and disproportionately impacted next-generation therapies, threatening to cede US leadership in innovation. Half of survey respondents report being negatively impacted by FDA reductions, and two-thirds are highly concerned about future drug delays.
- Trade barriers disrupt supply chains: With more than 70% of active pharmaceutical ingredients imported, new tariffs threaten to drive up hospital costs by 15% and delay product launches. Half of all biotechs would need to delay regulatory filings to find new partners, and the cost of generics is projected to rise by nearly 20%.
- Capital retreat strangles innovation: When policy or macroeconomic turbulence, such as funding cuts, regulatory uncertainty, or trade disruptions, increases perceived risk, venture capital quickly reallocates to less volatile arenas with shorter exits and clearer cash flow prospects. These headwinds are causing VCs to flee the sector, with early-stage deal values hitting a four-year low.
- Rising global competition: Asia now leads in biotech patent filings and IPOs, thanks in large part to China, a signal that the innovation frontier may be shifting abroad if U.S. policy fails to respond.
The report’s findings suggest an urgent and immediate course correction, including restoring NIH funding, rebuilding FDA capacity, avoiding premature trade restrictions, and establishing a long-term federal innovation strategy.
“Strategic investment in research, a fully staffed regulator, and stable, open supply chains are imperative,” Burlin O’Connell continued. “By reversing the cuts to funding and staff, and establishing policies that foster innovation, ensure patient access, and support the long-term growth of the life sciences sector, the United States can accelerate development of the next generation of life saving therapies, secure high value jobs, maintain global leadership, and reinforce national security. The choice is stark: lead the world in biotechnology or watch critical discoveries, economic growth, and strategic leverage migrate to rival nations.”
About MassBio:
MassBio is the driving force behind Massachusetts’ life sciences ecosystem, supporting innovation and industry growth by offering best-in-class resources to over 1,700 member organizations at all stages of the biopharma lifecycle. Founded in 1985, MassBio aspires to extend Massachusetts’ impact as the global center of excellence in biomedical breakthroughs. Through strategic cost-saving initiatives, robust business partnerships, educational and networking opportunities, and proactive advocacy, MassBio empowers its members to launch the next generation of medical advancements to deliver the cures and therapies that enhance patient lives. www.massbio.org