Why due diligence is crucial in the face of NIH funding cuts

On February 7, the Trump administration announced its plan to cut billions of dollars from the US National Institutes of Health (NIH) budget, the largest research funding source for medical research in the world. With $1.5 billion in research funds on hold and 16,000 grant applications suspended, many groundbreaking medical projects now face an uncertain future. As government research funding hangs in the balance, research institutions are turning to alternative sources to keep their work moving forward. 

Funding cuts increase the risk of research misuse

For decades, NIH grants have provided reliable funding for medical institutions engaged in sensitive research. Researchers could conduct their work with integrity without external influences or conflicts of interest. However, recent proposals to reduce NIH grant support for indirect costs from 40% to as low as 15% jeopardise this stability.

These cuts will make securing research funding more challenging for medical institutions. For example, UT Health San Antonio anticipates it’ll need to replace up to $35 million in funding.

Because of this, institutions may turn to funding from private sector partners or non-traditional sources. However, most lack the resources and expertise to assess more unfamiliar risks. This is particularly critical in fields, like biotechnology and biomedical science, where misused findings can have serious public safety consequences.

The importance of thorough due diligence 

Unlike NIH grants, where institutions could traditionally trust the source, today’s world requires institutions to assess potential funders through a broader risk lens. While some risks are clear, others are more subtle and harder to spot at first.

For instance, a potential funder might seem legitimate on the surface, but further scrutiny could reveal links to a high-risk jurisdiction or connections to individuals with questionable motives. Perhaps even foreign interests aiming to influence research for strategic gains. 

This makes a formalised due diligence process essential. Clear procedures and tools must be in place to help researchers quickly identify which research funding sources match their values, and which ones could cause more problems than they’re worth. With clear guidelines, researchers can focus their time and energy on more promising opportunities, instead of spending time with funders who don’t fit with their institutional mission or present potential risks.

More importantly, a formalised due diligence process ensures responsibility across the entire research institution. From small grants to large, multi-partner collaborations, the due diligence process can be applied at every level. 

What a strong due diligence process looks like

A strong due diligence process begins by screening potential partners against AML databases to ensure they aren’t sanctioned. This preliminary check ensures that you are legally able to accept funds from them.

Researchers must then interpret that data within a broader context, using information from the entire indexed internet to truly understand who they’re looking to work with. This requires internet research, typically done using search engines such as Google. 

When using Google, it’s important to go beyond the first few pages of search results. While obvious red flags will usually appear on page one, deeper, more nuanced risks might be buried further down, sometimes not surfacing until page twenty or thirty. For example, a high-profile individual might have a seemingly clean record in the top search results but could have legal controversies further in that didn’t make initial headlines.

Sorting through all these data points, cross-referencing multiple databases, and staying on top of the constantly evolving nature of public information can quickly become overwhelming for researchers. This is where AI technology makes a difference. 

AI can automate the time-consuming tasks of data gathering and analysis, sifting through vast amounts of unstructured data to provide concise, contextual summaries. This enables researchers to gain deeper insights into the background of potential partners, insights they might not have uncovered had they done it manually. 

“Xapien has transformed us from information gatherers to true analysts, which enables us to apply meaningful analysis.” Craig Leonard, University of Michigan

Deep due diligence on partners at scale 

Xapien is an automated due diligence tool, that enables institutions to assess a pool of potential partners or collaborators. Running detailed reports in minutes, Xapien screens subjects against AML databases to check for sanctions, watchlist status, or political exposure, with all findings clearly flagged. The system then examines the entity’s background by gathering and analysing data from across the indexed internet, flagging any adverse media related to issues like financial crimes, fraud, or governance concerns. Xapien offers a categorised breakdown of risks and provides fully sourced articles for further investigation.

“Xapien is our first stop for reputational risk.” Michael Foote, Dartmouth College 

Xapien summarises information like company ownership structure, controversies and legal proceedings, and international connections between organisations, such as foreign medical research centres. It helps researchers quickly identify and assess risks associated with specific entities, including legal, regulatory, or international concerns, such as links to high-risk jurisdictions.

The platform allows users to ask specific questions, such as querying potential relationships with particular countries and delivers detailed insights from a wide range of sources. By automating time-consuming research tasks and offering an intuitive interface for risk analysis, Xapien enables institutions to make more efficient and informed research funding decisions.

Moving forward with new funding sources

Government funding cuts bring uncertainty to medical research, but there are still many ways to secure new sources of funding. If institutions invest in the right technology, they can reduce the risks associated with private funding, protect the integrity of their research, and avoid abandoning years of work that could make a real difference in the world.