The recent funding freeze imposed by DOGE on the National Institutes of Health (NIH) has had a significant impact on various states and universities across the United States. The funding stoppage has led to immediate actions such as hiring freezes, reductions in Ph.D. admissions, and potential layoffs, disrupting critical research projects and threatening the U.S.’s leadership in biomedical research. The economic ripple effects extend beyond universities, potentially affecting local economies and the broader scientific community.
The economic impact of healthcare research dollars extends far beyond just funding scientists and labs. These funds have a multiplier effect, benefiting various sectors of the economy and supporting a broader workforce beyond the academics and researchers doing the primary work, including cafeteria workers, cleaners, administrators, and local businesses. A study by the United for Medical Research found that every $1 of NIH funding generates approximately $2.64 in economic activity. In 2022, NIH funding supported over 552,000 jobs and contributed $96.8 billion to the U.S. economy.
This economic pain will have a lasting effect as NIH-funded research often leads to biotech and biomedical startups that leverage the research to create high-paying jobs and attract investments, not to mention the lives that are improved by these research breakthroughs. Additionally, research institutions generate billions in economic activity which contributes to the tax base. Some states that will feel the pain include:
Alabama:
- University of Alabama at Birmingham (UAB): As the state’s largest employer and a top NIH funding recipient, UAB received over $413 million in NIH awards in 2023. The funding freeze poses substantial risks to its research programs and associated employment.
California:
- University of California (UC) System: The UC system, which received approximately $2 billion in NIH grants in 2023, faces substantial financial challenges due to the funding freeze. Michael Drake, President of the UC system, emphasized that such cuts could be “catastrophic” for ongoing research and healthcare advancements.
Florida:
- Statewide Impact: In fiscal year 2024, Florida’s universities and research institutions received approximately $1.1 billion from the NIH and National Science Foundation (NSF). The funding freeze threatens a significant portion of these allocations, jeopardizing various health and science research projects.
Massachusetts:
- Massachusetts General Hospital and Harvard Medical School: These institutions, which received $1.1 billion and $937 million in NIH funding respectively in 2023, are at risk of losing substantial funding due to the freeze. This jeopardizes ongoing research projects and associated employment.
New York:
- Columbia University: Columbia’s medical school has paused hiring and certain types of spending in response to the NIH funding cuts. The university stands to lose approximately $111 million due to the new cap on indirect costs.
North Carolina:
- North Carolina State University (NC State): Implemented a hiring freeze due to budget concerns tied to the uncertain impacts of the NIH funding situation. In fiscal year 2024, NC State received $48.3 million in NIH funding.
Texas:
- Institutions such as UT Health San Antonio and the Texas Biomedical Research Institute face substantial financial challenges due to the funding freeze. UT Health San Antonio risks losing up to $35 million annually, while Texas Biomed could see a reduction of $13 million. These cuts threaten ongoing biomedical research and the state’s position in global health leadership.
In response to these developments, 22 states, including Arizona, California, Illinois, Massachusetts, New Jersey, and New York, filed a lawsuit against the Department of Health and Human Services (HHS) and NIH, arguing that the NIH lacks the authority to implement such cuts. The lawsuit contends that the funding reductions could harm the health of their citizens by disrupting critical research.
A federal judge granted a temporary restraining order blocking the implementation of the funding cuts, providing a brief reprieve for affected institutions. However, the ongoing uncertainty continues to pose challenges for research planning and operations in these states.
The NIH funding freeze not only threatens the financial stability of these prominent research institutions but also jeopardizes the advancement of critical biomedical research that benefits public health nationwide.
