Authored by Baker Tilly’s Mark Scallon
Life sciences companies must work to sustain healthcare advancement and development while uncertainty around National Institute of Health (NIH) funding and other administrative changes stress the industry. Gaps in funding may be filled by an increase in stewardship activities, such as:
- Medical Education Grants
- Research Grants
- Investigator-Initiated Studies (IIS) / Investigator-Initiate Trails (IIT)
- Charitable Contributions
- Social programs supporting research and development (R&D)
While these initiatives are critical to progress, the expected surge in funding requests amplifies compliance risks. In this article, we explore strategies for balancing ethical engagement with meaningful impact and why automation is key to managing this evolving landscape.
Stewardship
Stewardship is the careful and responsible management of resources entrusted to your case, including natural resources, assets or even time and talents. It means acting as a caretaker for assets you do not own, with the goal of protecting and preserving them for the future.
The funding landscape: A perfect storm
Recent policy shifts have dramatically altered the research funding environment:
- Cancelled grants: In the last year, more than 1,800 active NIH research grants have been terminated, reducing awarded funds by approximately $8 billion compared to 2024.
- Targeted research cuts: Programs focused on diversity, equity and inclusion (DEI), environmental harms and critical health areas—including sickle cell disease, HIV/AIDS and mental health—have been affected by these cuts.
- Projected budget reductions: For 2026, the administration has proposed slashing the NIH budget by 43%, an $11.6 billion reduction from 2025 levels. Additional proposed cuts include $3.6 billion from the Center for Disease Control and Prevention (CDC) and $674 million from Centers for Medicare and Medicaid Services (CMS).
- Indirect cost cap: In February 2025, reimbursement rates for indirect research costs were capped at 15% for universities and research institutions, challenging the infrastructure that supports scientific progress.
These changes signal a long-term trend: external funding requests will rise sharply as organizations seek alternative sources to sustain research and development.
The compliance challenge
An influx of grant and contribution requests brings heightened risk. Manual processes struggle to keep pace with increased volume, creating vulnerabilities in:
- Documentation and audit trails
- Conflict-of-interest checks
- Regulatory compliance across jurisdictions
Without robust controls, organizations risk reputational damage, financial penalties and erosion of stakeholder trust.
Automation as a strategic tool
To navigate this complexity, life sciences companies must embrace automation. Solutions like stewardshipNOW streamline workflows, embedding compliance controls directly into the process. These automations enable:
- Efficiency: Automated routing and approvals reduce administrative burden and accelerate decision-making.
- Risk mitigation: Built-in compliance checks ensure adherence to regulatory standards.
- Scalability: Systems can handle increased request volumes without compromising oversight.
By integrating technology and automation with stewardship principles, organizations can achieve a balanced approach while supporting innovation and remaining compliant.
Conclusion
The life sciences sector stands at a crossroad. Funding uncertainty and rising compliance demands require a proactive strategy rooted in stewardship and enabled by automation. Companies that act now will not only weather the storm but emerge as leaders in ethical engagement and corporate responsibility.
For more guidance, contact an experienced Baker Tilly industry practitioner about your life sciences organization today.
