Ken Palumbo and his family have lived in Westport for 20 years. He has seen firsthand how National Institutes of Health grants impact medical discoveries, initially when he operated a public and private equity biotech/life sciences alternative investment management firm 28 years ago. He is now the president and chief operating officer of an alternative investment management firm.
His daughter now works in research at Columbia University. She is on the front lines, seeing entire labs get shut down. “This topic hits close to home,” Ken says. He writes:
Most Westporters are aware of the recent NIH funding cuts. Regardless of political affiliation, I think it’s important to highlight the second derivative effect of those cuts, how they impact us here in Westport, and what you can do.
Two Westport companies received NIH grants over the past 2 years: Luna Bioscience and Alara Imaging. One received funding in excess of 15% of its indirect costs.
A more significant impact will be felt by the professors and researchers and their families living in Westport who work in universities (Yale and others). They risk losing their jobs, as entire programs and labs will likely be eliminated.
Yale president Maurie McInnis says:
On February 7, the National Institutes of Health issued a notice capping indirect costs, also known as facilities and administrative costs, at 15 percent. That is more than a 75% decrease from the current rate the federal government set for Yale.
This decision poses a considerable threat to Yale’s research endeavors, which lead to medical breakthroughs, support patients in clinical trials, and drive economic growth.
Yale provost and professor of biiochemistry Scott Strobel adds:
Reallocating a greater portion of endowment revenue to fund the federal government’s “fair share” of the costs of federally sponsored research would require the university to reduce funding for other priorities and would reduce the amount of research the university conducts.
The majority of Ph.D.s and postdocs work in academia. Much of the research that leads to new drugs is born at NIH-funded labs. They tend to focus on basic science, while the private sector (pharma/biotech) emphasizes applied research and commercialization.
Yale University
This symbiotic relationship between public and private sectors is likely to be materially disrupted. NIH-funded research contributed to 354 of 356 (99.4%) of the FDA-approved drugs between 2010-2019. It is reasonable to conclude that we will experience a slowdown in the discovery and development of new drugs and medical breakthroughs.
The effect of fewer medical discoveries has an additional, though less obvious, impact on Westport, through our venture capital and private equity firma.
Reduced discoveries will result in less deal flow. This translates to higher competition on those fewer deals, resulting in higher valuations (prices paid), thus less profits to these firms.
Also, the failure rate of some of the startup VC/PE portfolio companies may likely increase as a result of the capital-intensive natural of early stage businesses, and their reliance on government funding.
Dr. Tom Maniatis, a renowned molecular neuroscientist at Columbia and head of the New York Genome Center, wrote an open letter on the history of NIH grants, including quantifying the investment return on NIH funds over time. He includes a call to action to fight these cuts. Click here to read. Click here for the New York Genome Center’s petition.
Columbia University
Last week, Columbia University was notified of a federal action canceling $400 million in federal funding. Government agencies cite “the school’s continued inaction in the face of persistent harassment of Jewish students.”
The actions of leadership at many elite universities last year has a new consequence: the Trump administration’s removal of funding, unless they take direct action to protect their students’ civil rights.
I do not condone this tactic. But unless we get this funding restored. it will harm every American and global citizen.
I remain hopeful that leadership will respond accordingly. Perhaps we can actually accomplish 2 things simultaneously.
(“06880” welcomes “Opinion” pieces from readers. Email 06880blog@gmail.com to submit ideas.)
It’s one of 10 pilot programs in Connecticut, using cannabix tax revenues. The grant from the Department of Mental Health & Addiction Services is $57,000.