In the latest of a string of clawbacks, the Department of Health and Human Services (HHS) is now sharing plans to cut contract spending by 35% across all divisions.
“Every agency within HHS is committed to reducing contract expenditures by this target,” an HHS spokesperson told Fierce Biotech. “These cuts are designed to ensure that every dollar is used more efficiently while continuing to focus on our core mission of improving public health and services.”
The cuts span all agencies housed in the HHS, including contracts across the FDA, the Centers for Disease Control and Prevention, the Centers for Medicare & Medicaid Services and the National Institutes of Health, among others. The terminations were first reported by NPR.
The HHS spokesperson did not respond when asked how much the administration expects to save from the contract cancellations.
Since Jan. 21, the HHS has terminated at least 80 contracts related to diversity, equity, inclusion and accessibility, according to the department. Examples of canceled contracts (PDF) include an FDA partnership with the Hispanic Association of Colleges and Universities, NIH contracts with the University of Nebraska and the University of Alabama and an Administration for Children and Families pact with the Urban Institute.
The federal health department has also eliminated at least 254 other contracts across marketing and advertising, media, subscriptions and consulting at the HHS.
"Amid the disorganized mass layoffs of HHS staff and the reorganization of the agency, the rushed cuts are more likely to cause problems than to accomplish anything constructive," Robert Steinbrook, M.D., health research group director at the consumer rights advocacy group Public Citizen, told NPR.
At the end of March, HHS head Robert F. Kennedy Jr. announced 10,000 federal layoffs, including 3,500 full-time FDA employees and 1,200 NIH workers. A previous wave of early retirements and other downsizing efforts account for the reduction of an additional 10,000 staffers.
A few days later, the HHS secretary said an estimated 2,000—or 20%—of the most recent job cuts were done in error, adding that reinstatements were "always part of the plan."
The cuts align with President Donald Trump's executive order "Implementing the President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative.”
Alongside the contract and staffing reductions, the Trump administration has also ousted several key health leaders, including Peter Marks, M.D., Ph.D., former head of the FDA’s Center for Biologics Evaluation and Research.
“Leadership in the agency’s been decapitated, and I think that was somewhat deliberate,” Janet Woodcock, M.D., former acting FDA commissioner and former principal deputy commissioner of food and drugs, said during an April 7 session of the Biopharma Congress.
“You’re not going to see everything come to a stop in the actual review of documents and development programs,” she said. “But the whole apparatus to get a drug on the market, a lot of that is missing, and you're going to see mistakes.”
Editor’s note: Fierce Healthcare's Noah Tong contributed to this report.