Alliance News

USG Update: Sweeping Cuts at HHS and USAID Threaten Public Health and Global Aid Initiatives

Apr 11, 2025

Editor’s note: Our community faces unprecedented challenges and an uncertain and unfolding future. In response, we are committed to curating relevant news and resources to keep members informed, advancing programming that harnesses the power of technology and innovative financing to continue to encourage health innovation globally, and fostering opportunities for our network to engage in efforts to re-imagine the future of global health. Find earlier updates here, here, here and here.

 

On April 1, around 10,000 U.S. Health and Human Services (HHS) employees from the National Institutes of Health (NIH), the Food and Drug Administration (FDA), and the Centers for Disease Control and Prevention (CDC) were put on leave, leading to a 25% reduction in the HHS workforce. These cuts jeopardize essential public health services, including disease monitoring and medical research, and are accompanied by a 35% reduction in contracted funding, raising legal and operational concerns. These policy shifts come on the heels of the March cuts to the U.S. Agency for International Development (USAID), aiming to slash 83% of its programs and fold the agency into the State Department by July 2025. This drastic move is leading to the dismissal of almost all USAID staff and the cancellation of $75.9 billion in funding, impacting vital health services and significantly reducing U.S. global health funding by $9 to $10 billion this fiscal year alone. 

The steep decreases in global health funding could lead to millions of new HIV and malaria cases, worsen maternal and child mortality rates, and hinder the fight against polio and other vaccine-preventable diseases, putting millions of lives at risk globally. The HHS cutbacks threaten to disrupt critical health initiatives, including disease monitoring, medical and food safety, medical research, and the administration of health insurance for nearly half the U.S. population. The ramifications of these cuts extend beyond health services. The announcement of the HHS reductions alone caused a 4% fall in the S&P pharmaceutical index, indicating growing investor unease about the future of medical research and healthcare delivery. Experts caution that the reductions could hinder U.S. biotechnological innovation and trigger a brain drain in the scientific community, as dwindling funds force researchers to seek opportunities overseas.

 

Updates and Impacts (a few of many)

While not a comprehensive list by any means, the following are a few recent developments.  

USAID and Foreign Aid

  • In March, the Trump administration announced plans to cut 83% of the programs at USAID and integrate the agency into the State Department by July 2025. The planned reorganization will see the termination of most USAID functions not aligned with administration priorities, resulting in the dismissal of nearly all USAID staff. (KFF)
  • Financial implications are significant, with $75.9 billion in USAID program funding targeted for cuts, including essential health services. The State Department is also facing significant cuts, with 2,100 programs (40% of total) potentially ending, totaling $4.6 billion. Some programs are exempt from cuts, including a $13.4 billion award to the Global Fund to Fight AIDS, Tuberculosis, and Malaria. (Devex)
  • These cuts and the recent U.S. withdrawal from the World Health Organization come on top of years of declines in global funding for health. (Vox)
  • The U.S. withdrawal could result in a $9 to $10 billion reduction in global health funding this fiscal year alone, with potentially up to $40 billion over the next few years. An analysis by the Institute for Health Metrics and Evaluation shows the U.S. provided roughly 32% of total global health funding. The gap is huge and European nations and private philanthropies like the MacArthur and Gates foundations are unable to fully compensate for the shortfall, despite increases in their health-related spending. (Science)
  • This drastic restructuring and reduction of USAID threatens global health initiatives and represents a fundamental shift in U.S. foreign aid strategy, posing risks to global stability and health security, according to experts including Dr. Atul Gawande, former Assistant Administrator for Global Health at USAID, who briefed U.S. Senators on April 1. (Inside Medicine)
  • On April 4, the Trump administration abruptly terminated 42 USAID programs, previously marked safe, that provided critical humanitarian and emergency food aid in Africa and the Middle East. This move, which included significant cuts to emergency food assistance, shocked the aid sector and raised alarms about potential life-threatening impacts on millions of people facing starvation. USAID leadership tried to rescind six of those terminations on Monday. (Devex)
  • Experts predict catastrophic health outcomes, including millions of new HIV and malaria cases and deaths, due to the funding cuts. Countries and organizations previously reliant on U.S. support are scrambling to find replacement funding sources amid fears of dire health impacts worldwide. 
  • Aid cuts could have ‘pandemic-like effects’ on maternal deaths, the WHO warns. (The Guardian) A recent Stanford-led study published in The Lancet Global Health reveals that prolonged foreign aid sanctions significantly reverse progress in reducing maternal, infant, and child mortality in low-resource countries. By analyzing three decades of data, researchers found that sanctions lasting five years or more could negate up to 64% of gains in maternal health. (Stanford)
  • On Tuesday April 8, a study in The Lancet estimated that suspending the President’s Emergency Plan for AIDS Relief (PEPFAR) could lead to about one million new H.I.V. infections by 2030 and could lead to nearly 500,000 AIDS deaths among children and the orphaning of 2.8 million more. (NYT) While PEPFAR maternal health programs are still funded, USAID implemented most PEPFAR programs. With USAID dismantled, there are few remaining health officials to oversee the program. (NYT) As a result, even the lifesaving HIV services permitted under a waiver are in jeopardy. (Devex)
  • Cuts to Gavi, the global vaccine alliance, could result in over a million child deaths over five years. (NYT)
  • Approximately 3.8 million women globally have lost access to contraception, potentially leading to a rise in unplanned pregnancies and related health issues. (Vox)
  • The elimination of funding for mosquito control and polio eradication could lead to a resurgence of mosquito-borne diseases and an additional 200,000 polio cases annually. (US News)

HHS and Medical Research Update

  • On April 1, U.S. HHS top officials, scientists, and staff across the NIH, FDA, and CDC were put on leave, impacting around 10,000 employees, culminating in a 25% total reduction in the HHS workforce due to buyouts and retirements. This massive cutback has raised concerns about its potential to disrupt vital health initiatives and weaken the ability of the U.S. to monitor disease outbreaks, ensure food and medical safety, conduct medical research and clinic trials, and administer health insurance for nearly half of the U.S. population. 
  • Legal experts are questioning the legality of these firings, citing potential procedural law violations and the broad, rapid scope of the reductions that could severely affect agency operations. (STAT)
  • Other disruptions loom, including a demand by HHS for all of its agencies to cut their total contracted funding by 35%. 
  • At NIH, the 35% cuts could eliminate many contract scientists who help run research labs and halt clinical trials on the NIH campus and beyond, among other impacts. The staff losses at the agencies also come amid wider turmoil in biomedical research, following NIH cuts to hundreds of grants touching on topics such as diversity and gender research, Trump’s threats to freeze or cancel grants to universities whose policies he dislikes, and an order to slash NIH’s overhead payments to universities. (Science) A judge has paused the overhead cuts, and court battles could determine the fate of all three moves. (Science) Most seminal discoveries in medicine have been supported by the NIH and nearly all FDA-approved drugs that improve life quality or longevity are linked to NIH involvement in their development, according to several former NIH leaders. 
  • On April 4, a federal judge in Rhode Island stopped a Trump administration attempt to cut over $11 billion in public health grants related to the COVID-19 pandemic and pandemic preparedness.The temporary restraining order came after 23 states and the District of Columbia sued, claiming the cuts were arbitrary, lacked proper notice, and endangered public health by potentially affecting states’ ability to manage infectious diseases and vaccine access. (Axios)
  • The ramifications of these cuts extend beyond health services. In response to the HHS layoffs, the S&P pharmaceutical index fell 4% due to these layoffs, signaling market fears about the economic impact heightened by the potential loss of institutional knowledge and the disruption of critical health functions, such as drug approvals. (Axios
  • Financial analysts highlight that the minor budget savings could be offset by broader economic damages to the healthcare sector. (Washington Post
  • In addition, nearly half of all U.S. counties will experience economic losses of at least $250,000 as a result of the Trump administration’s planned cuts to indirect funding by the NIH, per the Science & Community Impacts Mapping Project. More than 500 counties will lose more than $6.25 million in funding, their data shows. (Axios)
  • For decades, the U.S. has been the global leader in biotechnology innovation. A new report by the National Security Commission on Emerging Biotechnology finds that the U.S. is dangerously close to falling behind China. The Commission’s assessment is that the future of American biotechnology leadership is only possible through strategic federal action that encourages innovation by spurring private investment. This includes targeted investments and strategic government reforms to reduce regulatory bottlenecks. (Biotech
  • Reduced government support is risking a brain drain as it may deter scientists from pursuing entrepreneurial endeavors, potentially stifling innovation. Many U.S. scientists are considering opportunities abroad due to cuts in research funding at higher education institutions. These funding reductions pose academic, economic, and national security concerns. (Science
  • Thousands of U.S. universities, including Alliance academic members, offer programs designed to prepare the next generation of public health, global health and international development professionals. However, with the recent dismantling of USAID leading to a depleted job market, there is uncertainty about the future of these courses and the students enrolled in them. Universities are already facing tough times with the NIH cuts and political targets; this is one more. (Devex)

 

In our next issue, we will focus on the future—curating unfolding strategies and surfacing new ideas to navigate these challenging times and re-envision the future of global health. We encourage all members to contribute their insights by emailing us at communications@bayareaglobalhealth.org or completing this anonymous member survey to share USG policy impacts and ideas. Your perspectives are crucial as we strive to support our multi-sector members and collaboratively forge a responsive and resilient future, leveraging our collective expertise.

Resources

Advocacy and Mobilization

Navigating the Legal Questions and Resources for Workers

Sources and What We Are Reading

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For further sources, see our previous recaps here and here.