Clinical Research, DEI Initiatives Caught in Political Headwinds Amidst Funding Freeze
Recent actions by the FDA and NIH in response to the current political climate have left key stakeholders in clinical trials with limited resources to conduct equitable research.
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The clinical research industry finds itself at a crossroads, faced with difficult decisions amid ongoing legal challenges as a result of executive orders issued by President Donald J. Trump. Between newly imposed scale backs on diversity initiatives and budget cuts in medical research, the clinical research industry faces an uncertain path forward. In light of recent developments, here is a roundup providing the latest information on where these issues currently stand.
The first domino to fall in this climate occurred days after President Trump issued an executive order prohibiting federal recognition of gender identity apart from biological sex, effectively taking aim at diversity, equity, and inclusion (DEI) initiatives. In response, the FDA quietly removed a previously issued draft guidance on diversity in clinical trials from its official website.1
A client alert posted by Crowell & Moring LLP shortly after the removal occurred reads, “While the removed guidance was in draft form, it is highly unusual for FDA to revoke or alter draft guidance without issuing a statement or further guidance. This move raises questions about the applicability of statutory obligations to submit clinical trial Diversity Action Plans and the agency’s current thinking on best practices for clinical development.”1
Just weeks later, the National Institutes of Health (NIH) announced that it would cut “indirect expenses” in the funding it provides to research grants by nearly half. Under the new policy, the organization would cap these costs for all institutions at 15%. Immediately after the funding cut took effect on February 9, 22 states sued the NIH and the US Department of Health and Human Services, citing the cut as unlawful.2
The NIH awards approximately $30 billion in grants each year. A deeper dive into the numbers published by TIME showed indirect costs can range from nearly 30% to 70% of a research grant. These costs are negotiated by receiving research institutes and account for basic necessities such as heat, air conditioning, and electricity inside research facilities.2
The judiciary system wasted no time in responding to the NIH’s new policy. On February 11, STAT reported that Judge Angel Kelley of the US District Court for the District of Massachusetts ordered a nationwide temporary pause on potential actions by the NIH.3
The authors of the report wrote, “Lawsuits seeking to block the agency’s policy change have argued that it ignores congressional powers by retroactively modifying existing contracts that set the indirect cost rates negotiated between the federal government and research institutions. They’ve also argued that the NIH policy violates the Administrative Procedure Act, a federal law that governs how federal agencies implement new regulations.”3
The FDA’s removal of diversity materials on its website has also received a response in recent days. Reuters reported that US District Judge John Bates in Washington, DC, ordered the FDA and Centers for Disease Control and Prevention (CDC) to restore websites that they took offline in response to President Trump’s executive order on gender identity.4
In a memorandum, Bates wrote, “Finally, it bears emphasizing who ultimately bears the harm of defendants’ actions: everyday Americans, and most acutely, underprivileged Americans, seeking healthcare.”4
While there is still uncertainty around the eventual outcomes behind these actions as the courts weigh these challenges, political leaders are calling for immediate action. In the meantime, key stakeholders in the clinical trials industry must find ways to adapt and ensure their studies continue as planned.
References
1. After Trump Executive Orders, FDA Removes Diversity Guidance From Website. (2025, January 27). Retrieved February 13, 2025. Crowell & Moring LLP. https://www.crowell.com/en/insights/client-alerts/after-trump-executive-orders-fda-removes-diversity-guidance-from-website
2. Park, A. (2025, February 11). NIH Budget Cuts Are the “Apocalypse of American Science,” Experts Say. Retrieved February 13, 2025. TIME. https://time.com/7216299/nih-budget-cuts-science-research-funding/
3. Wosen, J., & Molteni, M. (2025, February 11). Halt on Trump administration’s cuts to NIH research payments expanded nationwide. Retrieved February 13, 2025. STAT. https://www.statnews.com/2025/02/11/judge-orders-nationwide-halt-trump-nih-research-indirect-costs/
4. Pierson, B. (2025, February 11). Trump administration ordered to restore removed CDC and FDA websites. Reuters. Retrieved from https://www.reuters.com/legal/trump-administration-ordered-restore-us-health-agency-websites-that-were-2025-02-11/
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