This update was originally posted by MassBio CEO & President Kendalle Burlin O’Connell on LinkedIn.
Washington had a busy week, and much of it landed directly in biopharma’s lap: new FDA and NIH budget proposals, a significant tariff announcement, and a Congressional calendar next week that will keep the MassBio policy team closely engaged.
FDA Budget Proposes Expedited IND Pathway: The administration’s FY27 budget requests $7.2 billion for FDA, with the Human Drugs Program receiving $2.5 billion, a slight increase over FY26. The budget also includes 27 legislative proposals which MassBio will be closely watching. In particular, the administration signaled support for permanently authorizing the Rare Pediatric Disease Priority Review Voucher Program, currently reauthorized through 2029, and is proposing an optional, risk-based Expedited IND pathway as an alternative for certain Phase 1 trials. This expedited pathway could allow sponsors to use existing preclinical data to support first-in-human dosing without repeating the full traditional package, significantly speeding up start times for Phase 1 trials. The proposal targets smaller biotechs that lack capital for duplicative studies and have been forced to move trials abroad, as U.S. timelines are lengthier and most costly compared to China or Australia.
NIH Budget Again Proposes Cuts: The Administration is requesting $41 billion for NIH in FY27, a $5 billion cut from current levels, and recommends consolidating institutes from 27 down to 22 while cutting ARPA-H from $1.5 billion to $945 million. Beyond the cuts, the administration is pushing to expand multi-year funding to all grants and cap indirect costs at 15%, though Congress pushed back last year and federal courts have ruled against the cap. While the Trump Administration earlier this week dropped its court fight to cap indirect costs, its return in the FY27 budget proposal suggests it remains a priority for the Administration. MassBio expects Congress to reject these cuts again but will continue making the case to Congress that sustained NIH funding is essential to the Massachusetts innovation pipeline.
NIH Holds Strategic Plan Webinar: NIH held its second public webinar on April 8 on its FY2027-2031 strategic plan. Public input through a Request for Information (RFI) remains open through May 26. The plan focuses on research areas, research capacity, and research operations, with an emphasis on geographic balance in funding and a shift toward human-based science, AI, organoids, and real-world data platforms. MassBio will be submitting comments to the RFI highlighting the importance of maintaining robust funding for basic research and supporting the next generation of biomedical researchers.
Tariffs Announced: As expected, the Trump Administration announced the findings from its Section 232 investigation along with an order imposing 100% tariffs on patented drugs and APIs, effective in 120 days for large companies and 180 days for small biotechs. While the tariffs do offer some carveouts, especially for companies that commit to onshore manufacturing and agree to MFN deals with the Administration, we are nonetheless disappointed at this result and believe they pose a serious threat to biopharma innovation in Massachusetts and across the country. As companies begin to weigh the impacts of these tariffs, we are looking for specific anecdotes to share with the Hill on how tariffs will impact the early-stage ecosystem and encourage you to reach out to Ben Bradford.
Senate Small Business Hearing Focuses on Bioeconomy Innovation: The Senate Small Business Committee held a field hearing in Indiana on Tuesday, April 7, Fueling Innovation: The Role of Small Businesses in America’s Bioeconomy. Senator Todd Young invited stakeholders across Indiana’s biotech ecosystem to discuss challenges facing small businesses and pathways to growth. Witnesses emphasized the need to strengthen SBIR and STTR programs to provide the intensive capital biotech companies require and called for increased supply chain resilience through federal programs that would help biotech hubs across the country share best practices and workforce development strategies.
Upcoming Congressional Calendar: There are several upcoming hearings that the MassBio team will be monitoring for discussion on policies that may impact the innovation ecosystem. House Ways & Means Health Subcommittee will hold a hearing on Tuesday, April 14, Modernized Health Care in Practice: Empowering Americans to Live Healthier Lives. House Energy & Commerce Subcommittee on Health will hold a hearing on Wednesday, April 15, Healthier America: Legislative Proposals to Improve Public Health. Finally, Senate HELP Committee will hold a hearing on Thursday, April 16, Making Medicines More Affordable: How Competition Can Lower Drug Prices. Looking ahead, we also expect an upcoming announcement of RFK Jr to testify in front of Senate HELP the week of April 20.