The Trump administration has launched a large-scale layoff initiative, severely impacting US public health institutions, with the Food and Drug Administration (FDA) bearing the brunt. Current and former employees have issued warnings that this move may have far-reaching consequences for the US pharmaceutical industry and the public health regulatory system.

 

In a LinkedIn post on Tuesday, former FDA Commissioner Dr. Robert Califf stated, "The FDA as we once knew it has come to an end. A large number of leaders with institutional knowledge, extensive product development experience, and safety regulatory capabilities have been dismissed."

Affected by the layoffs, the stock prices of the US pharmaceutical industry have dropped significantly. As of the close of trading on Tuesday, Pfizer (PFE.US) fell by 2.5%, Merck & Co. (MRK.US) dropped by 2.5%, Bristol Myers Squibb (BMY.US) declined by 2.2%, and Eli Lilly and Company (LLY.US) decreased by 1.6%. Meanwhile, the biotech industry has also been severely hit, with the SPDR S&P Biotech ETF falling by 2.5%.

For a long time, the pharmaceutical industry has relied on a stable and efficient FDA for drug approval and regulation. However, despite pharmaceutical companies and their lobbying groups having supported the government and held expectations for its policies since Trump's re-election in November last year, the sudden large-scale layoffs at the FDA have caught them off guard.

Dr. Peter Stein, the head of the FDA's Office of New Drugs, confirmed on Tuesday that he had been removed from his position. In an email to the media, Stein said he was offered a "meaningless position," but he chose to decline. Currently, he is on administrative leave, awaiting formal termination.

Previously, the US Department of Health and Human Services (HHS) announced plans to lay off 10,000 employees from public health institutions, with 3,500 of those layoffs coming from the FDA. Stein said that many employees in the Office of New Drugs were on the layoff list, which left him "deeply grieved."

"The FDA has lost a large number of experienced, dedicated, and highly knowledgeable employees, and their positions are of great importance," Stein warned. "This decision is foolish, ill-considered, and shortsighted. In the end, the American people will suffer. All I can say is that this is a 'darkest hour' for the US healthcare system, and its impact will be profound and long-lasting."

Just a few days before the FDA layoff turmoil, another senior FDA official, Dr. Peter Marks, announced his resignation due to differences over vaccine safety issues. In his resignation letter, he mentioned that he had been willing to communicate with US Secretary of Health Robert F. Kennedy Jr. about vaccine safety, but Kennedy "only wanted to hear statements that aligned with his misinformation and lies."

Marks' departure has triggered a strong reaction on Wall Street. Analysts at Cantor Fitzgerald publicly called on the White House to remove Kennedy from his position on Monday, believing that he is undermining the credibility of the US healthcare system.

"Robert F. Kennedy Jr. is weakening the leadership of the US medical industry," the analysts wrote in the report. "The HHS cannot be led by an anti-vaccine advocate, a conspiracy theorist, and someone lacking professional background."

Eric Schmidt, an analyst at Fitzgerald, further pointed out that the pharmaceutical industry had previously tried to negotiate with the Trump administration to reach a consensus, but now they have found that "the government has completely abandoned them."

As of now, the HHS has not responded to the specific details of the layoff notices issued on Tuesday. However, according to media reports, several senior officials from the National Institutes of Health (NIH) were fired on Tuesday, and layoffs have also occurred at the Centers for Disease Control and Prevention (CDC). In his LinkedIn article, former FDA Commissioner Califf bluntly criticized the layoffs, stating, "History will ultimately prove that this is a huge mistake."