Briefing Book

Cutting NIH Today Is a “Hard Power” Cut Tomorrow

While Republicans repeal Obamacare, leaving millions uninsured, their cuts to NIH spending will also increase the future burden of disease.

By Bob Kocher, MD

Tagged budgetNIH

A week after Paul Ryan proposed taking health-care coverage away from the poor, making it unaffordable for older people, and eliminating the Public Health Prevention Fund, President Trump is proposing a whopping $5.8 billion cut to the National Institutes of Health (NIH), which would amount to 20 percent of its budget. This is a double whammy. The Republican health-care policy, according to the Congressional Budget Office, already makes health-care premiums go up, cost sharing go up, and reverts us back to levels of uninsured citizens not seen since the Great Recession. Deep cuts to NIH spending will also increase the future burden of disease, make new treatments take longer, and lead to even higher future health-care costs.

It is, in some ways, puzzling that Trump would propose cuts to NIH because investments in biomedical research have the potential to create a large return on investment (ROI). NIH funding is the seed capital for new therapies. By funding the highest-risk, earliest-stage science, NIH funding enables a multiplicative cycle of private sector follow-on investment, job creation, and ultimately new treatments. This is the best kind of government investment, since it fills a gap in funding where private capital cannot afford to play.

It is not controversial to state that NIH funding has a high ROI. Just last year, Republicans, led by Orrin Hatch, Mitch McConnell, and Paul Ryan championed a bipartisan bill, the 21st Century Cures Act, which added $4.8 billion in new funding to the agency. So why would Republicans essentially repeal this funding, and cut even further, only one year later?   

One would think that Trump, the real estate developer, would be able to understand ROI. The NIH delivers two dollars back for every dollar invested in biomedical research. Moreover, the positive impact of NIH-funded research on health outcomes and quality of life is unequivocal. Cancer deaths have been dropping by 1 percent per year over the past decade and cardiovascular disease deaths have fallen by more than 50 percent over a generation. In only 30 years, HIV/AIDs has been transformed from certain death to a chronic disease with promise for a cure. So, as noted, investing in NIH, like in smart real estate investments, can create large future returns. 

Moreover, the surge of 10,000 baby boomers per day entering Medicare make the NIH’s research into Alzheimers and cancer even more critical. The Obama Administration, with bipartisan support, had increased funding in these areas with their BRAIN Initiative and Cancer Moonshot program. If breakthroughs do not materialize, increases in prevalence and treatment costs for Alzheimers and cancer alone could cripple Medicare’s finances, leading to painful budget tradeoffs as Medicare costs crowd out other budget priorities. If President Trump wants a “hard power” budget that invests more in defense and border walls, then it would be smart to invest more, not less, in NIH and public health. Otherwise, no money will be left for other Republican priorities. 

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Bob Kocher, MD is a Senior Fellow at the USC Schaeffer Center for Healthcare and Economic Policy, a Partner at the venture capital firm, Venrock and formerly Special Assistant to the President for Healthcare and Economic Policy.

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