Last week, the Congress Budget Office (CBO) released a report, titled “Changes in funding for NIH and changes in FDA review time will affect the development of new drugs.” The report evaluates two scenarios:
- The amount of funds provided by the government to NIH reduced a permanent 10 percent decrease, and
- FDA grows nine months in time in reviewing the new drug application (NDAS).
The CBO estimated that the decrease in funding of NIH’s external pregnancy research would eventually reduce the number of new drugs in the market or about 2 drugs per year. This result will not be immediate; Rather, the impact of funding decrease will increase in a period of 30 years and will have full effect in the third decade after the shortage starts.
Why does the medicine develop? The answer is that basic research (eg, NIH funding) and clinical research (clinical tests) are supplemented. Original Research identified more promising candidates for clinical testing testing. A study (Clear et al. 2018) found that “> 90% NIH represents basic research related to biological goals for drug action rather than drugs related to funding.” Also, Zhou et al. In 2023 it was found that “NIH spending on clinical development focuses on the initial stage tests, which represents a small fraction of the estimated industry expenses.”
Why does this effect take so much time? The deadline for drug development is prolonged. Thus, NIH funding cuts will not affect drugs currently undergoing clinical trials. However, there will be less promising targets for future clinical trials with low NIH funding.
The delay in FDA approval deadline also negatively affects the development of the drug. CBO report states:
The NDA review time for NDA will increase the number of FDA approved drugs in the year before an increase of nine months, as all but three months drug approval will be transferred to the next year. In addition to that initial delay, an increase in review time will reduce the number of such approval by increasing the cost to develop new drugs. The increase in the cost of development will increase the number of detained drug approval over time and will reach its full effect of A2 percent decrease – about a new drug in the second decade after an increase in the review time in a year.
Procedure
How did CBO come with these numbers? He used his simulation model of new drug development. That model believes that:
As per the 15 percent to 25 percent reduction in the expected returns for drugs in the top quintals of the expected returns, the number of new drugs entering the market in the first decade is associated with an average annual decrease in the number of an average annual decrease in the third decade, in the third decade, by 8 percent annual average decrease.
However, the 2025 USC report argues that the elasticity of innovation used by CBOs is very conservative.
First, the CBO’s model focuses on the decisions to start phase 1, phase 2 and phase 3 clinical trials, and policy changes are not considered an impact on pre -of pregnancy discovery.
Research. In contrast, in the model of Fhiles, the discovery of policies has their most important direct effects on research … Second, the policy considered by Adams is considered only to influence firms whose products are lied in the top 20% of the expected values of profits in the expected values of profits. The policies of the real world do not target firms in this way because it is not possible to do this: real -world policies directly affect prices or revenue
Instead of profit.
There are additional criticisms, but the USC white paper will argue that CBO estimates relatively conservative that NIH funding and prolonged FDA reviews affect drug development regarding reducing time.
You can read the full CBO report here and the simulation model method is here.
