The news: Biotech and pharma companies are considering moving early-stage clinical trials out of the US in response to the Trump administration's health funding cuts.

• Concerns over slowed drug development have some companies considering “Europe first” experimental testing, per Reuters.
• Other biotechs are exploring the UK and Australia for early-stage studies, per Endpoints News.

Driving the news: The ripple effects of an estimated $1.8 billion in NIH research funding cuts through April include more than 100 clinical trials halted, with hundreds more expected, per The Atlantic. Still, the majority of drugmakers seem to be taking a wait-and-see attitude as court cases over funding cuts are still pending. Some companies expect funding reinstatements.

Yes, but: The US’ share of global clinical trials has declined over the past decade. At the same time, China and India are accounting for more studies thanks to their large, diverse populations, lower costs, and government support.

• The US accounted for 15% of global clinical trials in 2024, down from 21% in 2015, per WHO data cited in Endpoints.
• China notched an 18% share last year, up from 10% in 2015, while India claimed a 19% share, up from 4% in 2015.

Yes, and: The EU launched a €500 million ($537 million) “Choose Europe” campaign earlier this month to recruit researchers and scientists by funding university research projects and helping to cover the cost of bringing foreign scientists in, per Reuters.

Why it matters: FDA approval is regarded as the worldwide gold standard for drug approvals. And the NIH was the largest federal funder of clinical trials in the US with $3 billion invested annually, per NIH data in September.

Drug developers are concerned that the loss of NIH investments, along with additional Trump administration proposed cuts—such as $4 billion to medical research at universities and hospitals by capping indirect costs at 15%—will kneecap its research collaborations.

The takeaway: Sweeping NIH federal funding cuts put clinical trials at risk. When researchers at academic medical centers are cut or lose their funding, so do the experimental studies they’re running.

Biotech and pharma companies rely on academic research, especially for early-stage findings. Although the final toll of NIH funding cuts is still emerging, biotech and pharma companies may want to consider options outside the US.

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