Budget and staffing cuts at the Food and Drug Administration orchestrated by President Donald Trump could prevent new drugs “from being developed, approved, or commercialized in a timely manner, or at all,” according to dozens of annual reports sent by pharmaceutical companies to the Securities and Exchange Commission in late February.
“The Trump Administration has enacted several executive actions that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities,” says one filing from Xenon Pharmaceuticals, a company based in Canada that researches treatments for epilepsy. “If these executive actions impose constraints on the FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively affected.”
In February, Elon Musk’s so-called Department of Government Efficiency laid off hundreds of FDA employees, causing widespread panic about the status of grant applications, active clinical trials, and drug approvals. Just over a week later, it reinstated a handful of staffers who regulate the American food supply and review medical devices.
The move did little to quell concerns from various pharmaceutical companies, who worry that any disruption to the slow moving bureaucracy could cause the FDA to grind to a halt. Before new drugs can go to market, the FDA has to conduct regular inspections and reviews, a process that can take years. Many recent SEC filings say if the FDA stops this work, these drugs simply can’t be released.
Biopharmaceutical company Rezolute, which develops treatments for a rare, congenital form of low blood sugar, says that DOGE’s mandate to “reduce expenditures” at agencies like the FDA would slow down their work, according to an SEC filing. The company adds that, “Our business is dependent upon the FDA and the FDA’s ability to timely respond to our drug development activities.”
Some pharmaceutical companies mentioned DOGE’s work at the National Institutes of Health, which provides tens of billions of dollars for drug research and development to corporations and universities around the world.
Clover Health, a health care company that provides Medicare, said in a recent filing that DOGE is creating “pressures on and uncertainty” around the federal budget, including the debt ceiling, which it claims “may negatively impact the economic environment, curtail spending on health and health care related matters.”
Some filings also warned about the possibility that Trump will overhaul existing drug regulations, which would cost additional time and money to comply with. A recent Trump executive order mandates broad deregulation across federal agencies, and new Health and Human Services Secretary Robert F. Kennedy Jr. has expressed agreement and proposed his own budget cuts.
DOGE recently froze $1.5 billion in funding for medical research, then later unfroze some of the funds. The back and forth left companies unclear on whether they can ultimately expect the US government to back their research. iBio, a company based out of San Diego, which studies antibody treatments for obesity and cardio-metabolic disorders, said in a filing that it’s currently “unclear” how Trump’s health care policy will affect grant funding for research in their field.
