By Josh Nathan-Kazis

The Trump administration began slashing jobs at U.S. public-health agencies on Tuesday morning, and the impact on the Food and Drug Administration so far has been dire, according to current and former employees.

"The FDA as we've known it is finished, with most of the leaders with institutional knowledge and a deep understanding of product development and safety no longer employed," former FDA Commissioner Dr. Robert Califf wrote in a LinkedIn post Tuesday morning.

Drug stocks were falling Tuesday. The S&P 500 Pharmaceuticals industry index was down 2.3%, even as the S&P 500 was trading in positive territory. Shares of all of the U.S.'s largest drugmakers were taking hits: Pfizer was down 2.5%, Merck was also down 2.5%, Bristol Myers Squibb was down 2.2%, and Eli Lilly was down 1.6%. Biotech stocks were also falling, and the SPDR S&P Biotech ETF was down 2.5%.

The drug industry relies on a well-staffed, stable FDA to approve and regulate its medicines. While drugmakers and their lobbyists have been uniformly supportive of the Trump administration since the November election, and spoken optimistically about what Trump's leadership will mean for their industry, the layoffs at FDA are unveiling a different reality.

One of the top FDA leaders pushed out, Dr. Peter Stein, confirmed to Barron's Tuesday morning that he had been removed from his role.

Stein was longtime head of the Office of New Drugs, a key office within the FDA that is responsible for reviewing applications for new medicines.

Stein wrote to Barron's that he had been offered "a nonsensical position, " which he declined. He wrote that he is "on administrative leave until I'm separated from FDA."

The U.S. Department of Health and Human Services had said last week that it plans to cut up to 10,000 additional jobs across public-health agencies, including 3,500 at FDA.

Stein said he is "saddened" that so many staff within the Office of New Drugs had been included in HHS' reduction in force. HHS had said last week that the staff cuts wouldn't affect drug reviewers.

"The loss of staff with huge experience, dedication, and expertise -- in essential roles -- will undermine critical functions at FDA," Stein wrote. "It's hard to imagine more foolish, poorly considered, and thoughtless actions -- actions that will hurt Americans. All I can say is it is a dark day for our healthcare system -- as the impacts will be long-lasting."

The layoffs come days after another top FDA official, Dr. Peter Marks, said he was leaving the agency amid a dispute over vaccine safety. Marks wrote in a resignation letter that he was willing to work to address the concerns of Robert F. Kennedy Jr., the U.S. health secretary, about the safety of vaccines, but that Kennedy "wishes subservient confirmation of his misinformation and lies."

On Monday, analysts at Cantor Fitzgerald called on the White House to remove Kennedy as U.S. health secretary over Marks's forced resignation. "RFK Jr. is undermining the trusted leadership of healthcare in this country," the analysts wrote. "HHS cannot be led by an anti-vax, conspiracy theorist with inadequate training."

One of the analysts, Eric Schmidt, told Barron's Monday that the industry groups that represent drugmakers had so far looked to negotiate with the administration. "I think we're past that, in my opinion," he said. "I think the administration has played those industry groups."

HHS didn't immediately respond to request for details about the termination notices issued Tuesday morning. The Associated Press reported that multiple senior leaders had been terminated Tuesday at the National Institutes of Health, and the healthcare news website STAT reported that there had been layoffs at the Centers for Disease Control and Prevention.

In his LinkedIn post, Califf, who was FDA commissioner from 2015 to early 2017, and again from 2022 through this past February, wrote: "I believe that history will see this [as] a huge mistake."

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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April 01, 2025 13:46 ET (17:46 GMT)

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