A new proposal to regulate federal grants risks destabilizing the system of government support essential to developing innovative therapies American patients need, the Biotechnology Innovation Organization (BIO) warns.
The Office of Management and Budget (OMB) says its proposed Regulation for Federal Financial Assistance “would improve transparency, accountability, and oversight for Federal awards.” The new rule would make it easier to suspend or cancel federal grants, emphasize priority of “agency discretion” over peer review of proposals, and enhance “alignment of Federal awards with administration priorities,” OMB explains.
BIO’s comments focus on the anticipated impact of the proposed regulation on the biotechnology sector. They recommend against the proposed regulation, saying it will interfere with the system that generates biomedical innovation.
“Federal funding plays a critical role in enabling innovation across the biomedical research ecosystem, supporting the foundational scientific work that underpins private-sector drug development,” BIO’s comments say. “Disruptions to this funding model—including increased uncertainty, administrative complexity, or constraints on participation—would not only affect academic researchers but also have direct implications for private-sector investment, partnership formation, and the advancement of new therapies.”
Specific concerns
BIO comments cover six general areas of concern:
- “The proposed rule will destabilize the biomedical research ecosystem and delay patient access to novel medicines.” The rule would include addition of “at will” termination authority for grant-making agencies and provide new powers to suspend grants. The resulting uncertainty of funding for personnel or infrastructure would make institutions hesitant to embark on new research projects, impacting later private investment and ultimate development of new therapies, BIO says.
- “The proposed rule will weaken merit-based funding decisions and redirect resources away from high-impact biomedical research.” By treating independent peer review as merely a recommendation, and stating that program goals must align with Administration priorities, “the proposed rule would undermine review based on scientific merit in favor of more subjective considerations,” BIO says.
- “The proposed rule will restrict vital international research collaboration and weaken U.S. competitiveness.” New prohibitions against using funds with foreign companies or entities would prevent involvement of international experts, something that is normal in the globalized biotech ecosystem. “The provision may have significant implications for biomedical research, which often relies on multinational collaborations,” per BIO’s comments.
- “The proposed rule will undermine emergency preparedness and U.S. health security.” Being ready for public health emergencies requires long-term preparation work in combination with rapid responses when an emergency arises. Flexible funding mechanisms that enable emergency responses could be hampered by new procedural requirements introduced by the proposed rule, BIO notes.
- “The proposed rule will impede scientific communication and slow the translation of research into medical innovation.” The rule would restrict use of federal grants for communication efforts, ranging from publication to conference attendance to advertising. This would make it difficult for researchers to share their innovations, so they can find investors and research partners, and make it harder for the public to become aware of innovations that may impact them, BIO says.
- “The proposed rule raises several legal concerns about agency authority, particularly as to proposals that conflict with the statutory purposes of NIH research grants and other key discretionary programs.” “The proposed rule raises a number of legal concerns under the Administrative Procedure Act (APA), including the potential conflicts between the proposed rule and program-specific statutes; the challenges of commenting on so broad a rule that would affect so many different programs,” and several others, according to BIO’s comments.
BIO concludes that the proposed rule is not workable and recommends that other means for introducing transparency and accountability be found.
“As drafted, the proposed rule would introduce significant uncertainty and impose constraints that are fundamentally misaligned with the needs of the national biomedical research ecosystem,” BIO’s comments say. “If finalized, this rule would risk disrupting critical research, weakening U.S. competitiveness, and slowing the pace of innovation—ultimately harming patients.”
CSBA comments
The Council of State Bioscience Associations (CSBA), a confederation of state-based, non-profit trade organizations recognized by BIO as affiliate organizations, also submitted comments recommending against the proposed regulation.
“Support from a variety of federal government agencies plays a key role in the ability to take breakthrough innovations from basic scientific research through multi-year development processes before finally reaching an approved therapy American patients can benefit from,” says CSBA’s comments.
“The provisions contained in the proposed rule would destabilize critical research and weaken U.S. leadership in biotechnology innovation,” CSBA’s comments continue. “Therefore, the CSBA urges OMB to either withdraw the proposed rule or revise it, in collaboration with stakeholders.”
