In this week’s edition of InnovationRx, we look at the latest on Trump’s attempts to cut research funding, the ongoing financial struggles of rural hospitals, a major measles outbreak and more. To get it in your inbox, subscribe here.
Two federal judges have issued temporary restraining orders halting the Trump Administration’s massive cuts to National Institutes of Health research payments to universities and medical centers. The rulings came in response to two lawsuits, one from 22 states, the other on behalf of private universities and hospitals. The restraining orders are in effect nationwide.
The Administration’s effort to slash costs came from a plan to cap “indirect costs”—the funds that go toward the institution’s administrative and facility costs linked to the research—at 15%. The judges’ orders keep the current rates, which have long been negotiated between institutions and the government, in effect until further notice.
The NIH is the crown jewel of American scientific research, and it invests the vast majority of its $47 billion budget on medical research. Those funds are critically important in helping researchers study diseases that include cancer, Alzheimer’s disease and diabetes.
The 22 states led by Massachusetts that filed suit in the U.S. District Court for the District of Massachusetts, argued that the NIH’s abrupt decision to set a 15% cap on indirect costs—down from what’s typically around 27% and can be as high as 60% or 70%—would be “immediate and devastating.” The states argued that the Trump administration acted in an arbitrary and capricious way by not explaining the reason for the cap and that it also violated a 2018 law governing NIH spending.
The Trump Administration’s move, announced on Friday, is the latest in its efforts to slash-and-burn U.S. government agencies, including USAID and the Consumer Financial Protection Bureau. Billionaire Trump donor Elon Musk (worth $388 billion), who has been spearheading much of the cost-cutting through the group DOGE, posted on X about that spending, “What a ripoff!”
The cuts spurred an immediate outcry by medical researchers, scientists and academics, who warned of catastrophic consequences for biomedical research. Health publication Stat wrote that some top universities and medical centers, including Stanford, Vanderbilt University Medical Center and Weill Cornell Medicine could lose $100 million or more a year if the policy was implemented, based on publicly available financial records and internal emails.
While big blue states like California and New York receive the most NIH indirect funding, Texas, the largest red state, received nearly $505 million in indirect costs, according to reporting by Newsweek on the cuts’ impact on red states. “This NIH funding affects everyone regardless of political affiliation,” Massachusetts Attorney General Andrea Campbell said in a press conference.
Key Republican senators have also pushed back against these proposed cuts. Senator Bill Cassidy, R-La., who chairs a committee that oversees the NIH, told Stat that “one thing I’ve heard loud and clear from my people in Louisiana is that Louisiana will suffer from these cuts.” Senator Katie Britt, R-Ala., told local news agency Al.com that “a smart, targeted approach is needed in order to not hinder life-saving, groundbreaking research at high-achieving institutions like those in Alabama.”
Study Finds Travel Time For Surgery Has Increased For Rural Patients
More than 150 hospitals have closed down in rural areas of the United States since 2010. That’s led to decreased care for patients in these regions, according to a new study published today in the Journal of the American Medical Association. Researchers found that 44% of rural Medicare recipients had to travel over an hour to get a surgical procedure, up from 37% in 2010. For high-risk procedures, that percentage is 59%, up from 54% in 2010. For urban and suburban patients, these percentages were significantly lower.
“These findings suggest a persistent and growing disparity in travel for rural patients undergoing surgical procedures,” the study’s authors from the University of Michigan, Texas Tech and the University of South Carolina wrote. “Contributing factors likely include ongoing rural hospital closures, workforce shortages and rural patients bypassing local facilities to obtain care elsewhere.”
This study comes on the heels of one published by healthcare advisory firm Chartis earlier this week, which found that 46% of rural hospitals are losing money, and estimated that 432 of them are at risk of shutting down. The study found that rural hospitals in the 10 states that have not expanded Medicaid under the Affordable Care Act are in the most dire financial straits, with a median operating margin of -1.5%.
In addition to a lack of Medicaid expansion, an increasing number of patients on Medicare Advantage plans has also led to operating losses, according to the study. That has led to “a lower reimbursement than they are accustomed to” and increased both administrative burdens and claim denials, they wrote.
Even where rural hospitals are still in operation, the Chartis study found that many have cut back their services due to difficulties recruiting and retaining doctors and other healthcare professionals in rural areas. Nearly 300 rural hospitals have cut their obstetrics programs since 2011 and more than 400 have stopped offering chemotherapy, according to the study.
BIOTECH AND PHARMA
The FDA has approved mirdametinib, a new drug for patients aged two and older with neurofibromatosis, a rare genetic disorder that causes non-cancerous tumors to form on nerves. Springworks Therapeutics sells the drug under the name Gomekli, The neurological disease can cause heart conditions, vision loss, pain and other issues. A clinical study found that mirdametinib reduced tumor sizes by more than 40%, while patients reported sustained reductions in pain and other improvements in quality of life measures.
DIGITAL HEALTH AND AI
Australian startup Harrison.ai, which has developed AI tools to assist doctors in analyzing medical images like X-rays and CT scans, raised a $112 million series C round, at an undisclosed valuation. The company plans to use the cash influx to expand to the United States and accelerate product development. Horizons Ventures, a Hong Kong venture firm backed by billionaire Li Ka-shing, co-led the round. The firm has previously made other bets on AI with early investments in DeepMind and Siri, and has been an investor in Harrison since its series A round in 2019.
MEDTECH
Two California women are suing Procter and Gamble, alleging that its “Menopause Stage Indicator” (which is sold under its ClearBlue label) is fraudulent. The test uses urine to measure levels of follicle-stimulating hormone, levels of which increase as women age. For women in perimenopause, which can start in the late-40s, or years before the onset of menopause, that knowledge would be useful. The complaint claims that “FSH levels cannot indicate a menopause stage as Clearblue claims” but that the company used the brand trust it has built with its pregnancy tests (which are reliable) to dupe women approaching menopause into buying this product.
Although FSH levels do tend to gradually increase during the transition from perimenopause to menopause, medical professionals don’t typically use FSH levels to monitor it, because the levels can fluctuate significantly, making single point tests an unreliable measure. P&G did not respond to Forbes’ requests for comment and has not yet formally answered in court to the lawsuit.
PUBLIC HEALTH AND HOSPITALS
A measles outbreak in a small West Texas county is causing alarm. Twenty-four measles cases, most of them in school-age children, were reported in Gaines County, which has among the highest rates of vaccine exemptions in the state. The outbreak has crossed state lines, with one confirmed new case reported in neighboring Lea County, New Mexico, and multiple possible exposures. Measles cases have risen over the past year, with outbreaks in Chicago, metro Atlanta and other areas, as declining vaccination rates have left communities at risk. All of the people who became ill in Texas are believed to be unvaccinated, Zach Holbrooks, executive director of the South Plains Public Health District, told CNN. Nine of the infected children have been hospitalized.
DEAL OF THE WEEK
Novartis agreed to buy Blackstone’s Anthos Therapeutics in a deal worth up to $3.1 billion to bolster its cardiovascular business. Blackstone Life Sciences set up Anthos after licensing abelacimab, a monoclonal antibody for treatment of thrombosis and other cardiovascular metabolic diseases, from Novartis in 2019 and funding its clinical trials. The transaction is expected to close in the first half of this year. Novartis has been on a shopping spree lately, focused on smaller acquisitions with price tags of less than $5 billion. CEO Vas Narasimhan said after its earnings call last week that the drugmaker had done 30 such deals in the past year.
WHAT WE’RE READING
The Trump administration’s sudden freeze on funds to USAID has caused multiple patient deaths as hospitals lose access to oxygen or have had to close entirely.
The physicians really are healing themselves, with Ozempic.
The beekeeping industry is in a panic as a shocking number of bees die, potentially raising prices for almonds and some fruits.
The American Academy of Anesthesiologists issued new guidance for the use of ketamine to treat mental health
A federal judge ordered HHS, the CDC and the FDA to restore their websites and data to what they were on January 30, prior to data being removed by the Trump administration.
Elon Musk’s DOGE canceled a planned Anthony Fauci museum exhibit in its federal cutting spree.
NIH’s long-time principal deputy director Larry Tabak is retiring, adding to uncertainty at the federal health agency,
The active ingredient in Ozempic may reduce alcohol cravings, a new study suggests.
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