The NIH is running out of time to spend billions of dollars

The National Institute of Health still has billions of dollars the agency has yet to spend in the current federal fiscal year, and time is running out to use that money.

The NIH, the prime source of federal funds for medical research, has yet to spend billions that Congress has already approved for the agency in the current fiscal year, according to an analysis by the Association of American Medical College. The analysis examines money Congress agreed to spend a year ago. It does not include the many grants that the NIH has terminated to medical schools and hospitals this year.

Through June 30, the NIH had spent $30 billion, compared to $34.7 billion the agency obligated during the previous year. The delays in distributing funds are slowing academic research, says Heather Pierce, the AAMC’s senior director for science policy and regulatory counsel.

“These are already allocated funds. Congress has signed off on them," Pierece tells Chief Healthcare Executive®.

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With the federal fiscal year ending Sept. 30, NIH funds which haven’t been spent could be lost, Pierce says.

“There's no precedent to having this much money remaining this close to the end of the federal fiscal year,” Pierce says.

“The federal fiscal year ends September 30, and funds that haven't been obligated yet typically revert to the U.S. Treasury. That means the money that was given to NIH by Congress for fiscal year 2025, would be lost from the research enterprise entirely,” she says.

(See more from our conversation in this video. The story continues below.)

NIH Director Jay Bhattacharya, MD, has pledged to make sure all of the money is spent by the end of the federal fiscal year, which Pierce says is reassuring.

But she notes there are many steps that must take place before those grants can go out the door. Many applications have yet to be reviewed and approved.

“The selection of a research project for an NIH grant is a multi-step, highly rigorous, complicated process that includes thousands of peer reviewers across the nation,” she says.

The mechanisms of the grant approval process have slowed, Pierce says. And while it’s typical for the NIH to award a high number of grants as a federal fiscal year closes, the agency is dealing with an unusually large amount of money that has yet to be spent.

“There's already a crunch at the end of the year,” she says. “We're only a month away. That far behind, it makes things very complicated for the agency.”

When asked if it’s feasible to ensure that billions in unspent funds can be allocated, she says she is hopeful that the NIH has mechanisms it can use to accelerate the process.

“How is this all going to take place? We don't know, having never seen this big of a gap before, exactly how that'll take place,” she says.

The AAMC’s analysis of the unspent grants shows that virtually all states are being affected by the delay in distributing NIH funds. Some states have received hundreds of millions less in NIH funding than they did a year ago.

“That was one of the interesting pieces of our analysis when we started looking at where these gaps are concentrated,” Pierce says. “It was across the country, virtually every state, every geographic region.”

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The unspent funds complicate what has already been a difficult year for hospitals, academic medical centers and universities that rely on NIH funding.

The NIH has terminated 3,000 grants across the country, Pierce says. Although some of those grants have been restored, the vast majority of those grants have not been reinstated, she said. The AAMC and other groups have filed legal challenges of the terminations of those grants.

More than 2,200 NIH grants have been terminated and yet to be restored, including more than 1,100 NIH grants to hospitals and medical schools, according to an AAMC analysis. Altogether, more than $3.7 billion in NIH grants have been terminated.

Hospitals and universities have laid off staff in the wake of grants being cut, and some research projects have been halted, AAMC officials note. Vanderbilt University Medical Center announced the layoff of more than 600 workers in June, with the institution citing the impact of cuts in federal funding.

The Supreme Court ruled in August that the NIH can move forward with cutting nearly $800 million in grants tied to diversity and issues affecting minority groups, although the decision allows a legal battle over those grant terminations to continue. The AAMC, which joined other groups opposing those grant terminations, said the Supreme Court “made the wrong choice.”

Pierce said it’s possible that “the merits of that case may eventually end up back at the Supreme Court.”

The AAMC and other medical groups are counting on Congress to authorize more money than President Trump’s administration has proposed for the 2026 fiscal year. The NIH would see a 40% cut in its budget under the White House spending plan. However, the Senate Appropriations Committee went beyond the administration’s request and approved a $400 million increase for the NIH in 2026.

Pierce says she’s hopeful that Congress will ultimately prevent steep cuts to the NIH budget for next year.

“The indications we've had so far are very positive,” she says. “There has been terrific bipartisan support in the Senate, as always, for the promise of NIH, and I think that we're very hopeful that that trend will continue. The recognition that NIH is something that needs to be funded and stable, and that drives scientific progress, is a story that is and continues to be compelling.”