On 22 January 2025, an executive order was signed that abbreviated the annual grant approval process of the NIH, impacting approximately 50,000 grants nationwide. According to The Science & Community Impacts Mapping Project, created by academic researchers from the University of Maryland, the University of Pennsylvania, and the Georgia Institute of Technology using data from NIH grants in 2024, this funding disruption could lead to a staggering $16 billion in economic losses and 68,000 job cuts across the country. The budget cuts particularly target indirect costs associated with research grants, pulling funding for essential operational expenses such as equipment, maintenance, utilities, and support staff.

The states expected to be hardest hit by these changes are California, New York, Massachusetts, Pennsylvania, and Texas, with an estimated total impact of $7.5 billion in funding cuts. President Donald Trump’s proposed federal budget for 2026 reduces NIH funding by $17.97 billion, nearly a 40% decrease from the previous year. The 2026 proposal also includes consolidating the NIH, which consisted of 27 centres and institutes at the beginning of this year, into just five entities.

The proposed NIH budget reductions could impact the viability of hosting clinical trials in the US, especially for international collaborators like UK Small and Medium-sized Enterprises (SMEs) in the medtech and life science sectors.

Prolonged timelines and increased competition

Cuts to NIH funding could trigger a shift in the landscape of clinical research, impacting the availability and accessibility to US clinical trials. A diminished pool of public funding may translate to a sharp decline in the number of NIH-sponsored clinical trials, creating intense competition between research organisations and making it increasingly difficult for UK SMEs to secure trial slots without significant private financial backing. Navigating this complex and more competitive landscape would impose additional administrative burdens, and with fewer available funded trials, administrative delays would inevitably lengthen the commencement of trials, potentially impeding research and development timelines and potentially hindering the progress of groundbreaking innovations.

Emergence of private clinical trial opportunities

In contrast, potentially faced with financial constraints stemming from reduced NIH grants, US research hospitals are likely to become increasingly receptive to hosting privately funded clinical trials. This shift presents an opportunity for UK SMEs but also introduces new challenges. UK SMEs may be able to leverage their pool of private capital to finance clinical trials in the US at potentially preferential terms as the research organisation would avoid the burden of lengthy grant applications. While the cost to the UK SMEs maybe greater (due to the lack of grant funding), it is possible that the overall costs of the trial would be lower as research organisations seek to attract these trials to supplement their funding from the reduced NIH grants.

In this evolving landscape, building robust strategic partnerships with US hospitals, Contract Research Organisations (CROs), and other key stakeholders would become paramount. These partnerships are critical for navigating the complexities of privately funded trials and ensuring the successful advancement of innovative medical technologies.

Navigating the new reality: building strategies and relationships

In the current medical research environment, UK SMEs must adopt a proactive and strategic approach to ensure continued access to US clinical trials. Reducing their dependence on public funding and diversifying funding sources into venture capital, private equity, and strategic alliances with clinical stakeholders will be essential.

Cultivating these strong relationships with US hospitals, research institutions, and regulatory bodies will become crucial for accessing resources, navigating regulatory compliance, and understanding the complexities of the US healthcare system. Additionally, deepening understanding of the FDA regulatory framework and adapting to potential changes is vital for ensuring compliance and streamlining the trial process.

By adopting a strategic approach, diversifying funding sources, and building strong partnerships, these startups can navigate the new landscape and continue to innovate.

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