US biotech is under threat. Here’s what universities and investors should do about it

America does not have royalty in the traditional sense. But we do have a crown jewel: the US bioscience innovation ecosystem. It is a product of decades of bipartisan investment, public-private collaboration and university-driven research. No other country in the world has replicated this success—yet today, this engine of health and economic prosperity is under threat.

But not from foreign competitors.

It is our own federal government that has placed this jewel at risk.

Since January 2025, nearly 800 National Institute of Health (NIH) research grants have been terminated, representing over $2bn in cancelled funding. A sweeping 15% cap on indirect cost reimbursements for NIH and Department of Energy grants has been implemented—despite courts finding it likely violates federal law. And now, new tariffs on the biopharma industry are being proposed, threatening to further disrupt supply chains, drive up drug development costs, and shrink the very investment pool needed to fund next-generation therapies.

This isn’t just bad policy—it’s dangerous. And it impacts YOU.

If you’re a university—you face the loss of infrastructure and research continuity. Grants terminated midstream are not easy to restart once the trained staff is laid off; animals needed for studies killed off. Finding and training new people requires work and time. Furthermore, for graduate students and post docs working on these projects, the work they were planning to publish will never come to fruition, adversely affecting their careers.

If you’re an investor—you’ll see fewer startups and fewer breakthroughs to fund. Let’s be clear: 40% of new biotech companies originate from NIH-funded academic research. Cut the funding, and the innovation pipeline dries up. Deal flow declines. Companies like Genentech and Amgen are prime examples of companies that emerged out of innovations from the academia. It was federal investments that powered discoveries like the human genome sequencing and CRISPR, which have led to numerous investment opportunities for investors. At the end of the day, the limited partners that venture capital firms rely on to invest in their funds, may choose to invest in other sectors.

Some critics argue that university overhead rates (ranging from 50–80%) are too high. They may have a point—transparency and reform are surely needed. But the solution is not to decimate the entire system. Those funds pay for lab space, compliance, and the staff that allow scientists to focus on discovery. Slash them without a plan, and we risk permanent damage. So, what can you do about this?

If you’re an investor: Your future deals depend on basic science funding. Use your voice with policymakers to advocate for sustained or increased NIH and federal research funding.  They may need to be educated on how publicly funded research feeds the private sector pipeline that creates jobs and brings new medicines to people.

Point to real-world success stories like Enbrel, Epogen and other breakthrough therapies that originated from federally funded research. Engage directly with lawmakers, especially to those on the Senate committee on Health, Education, Labor, and Pensions (HELP), as they have jurisdiction over agencies, institutes and programmes in the Department of Health and Human Services. Support industry groups like BIO and the National Venture Capital Association (NVCA) to ensure the next generation of biotech companies can emerge.

If you’re an academic researcher or staff person at a university: Publish impact reports that make the case for how research from your university has translated into real-world treatments and technologies. Work with advocacy groups like the Association of American Universities (AAU), Council on Government Relations (COGR), the Association of University Technology Managers (AUTM) and American Council on Education (ACE) to tell your story effectively. Be transparent about the use of indirect cost (overhead) rates to strengthen public trust in your research enterprise.

The US bioscience sector is not a light switch—it cannot be turned off and on. Once we lose talent, momentum and trust, we may not get them back.

This is about more than grants. It is about American lives, American jobs, and America’s place in the future of medicine.

Will we continue to lead—or let this crown jewel completely break?

Jahanara Ali is the cofounder of CatalyzeBio, a company that provides business development and market research services to biotech companies.