Trump Administration’s CDC Layoffs Shutter STD Lab, Sending Ripples Through Biotech and Global Health

The Trump administration’s recent layoffs at the Centers for Disease Control and Prevention (CDC) have dismantled a critical laboratory, raising alarms in the biotech industry and public health sectors. On April 1, 2025, the administration terminated all 28 full-time employees and 10 fellows of the CDC’s Sexually Transmitted Diseases (STD) Laboratory Reference and Research Branch, effectively closing a cornerstone of STD surveillance. As a result, this move, part of broader cuts across federal health agencies, threatens to disrupt antibiotic resistance monitoring, STD testing accuracy, and global health strategies. Moreover, for the biotech industry, already grappling with a market downturn, the layoffs amplify uncertainty, potentially creating gaps that other nations could exploit. Here’s what’s at stake, why it matters, and where opportunities may emerge.

A Critical Loss for STD Surveillance

At the start of April, officials informed lab staff about the cuts as part of the 10,000 layoffs at the Department of Health and Human Services. Within the agency, officials warned that these layoffs will cause delays and disruptions to testing. The STD Laboratory Reference and Research Branch, housed within the CDC’s Division of STD Prevention, has been a linchpin in tracking sexually transmitted infections for nearly four decades. Its flagship Gonococcal Isolate Surveillance Project (GISP), launched in 1986, monitors antibiotic resistance in Neisseria gonorrhoeae, the bacterium behind gonorrhea. By testing samples from STD clinics nationwide for susceptibility to antibiotics like ceftriaxone and azithromycin, GISP informs treatment guidelines and helps curb the rise of drug-resistant strains, including the alarming “super gonorrhea.” 

However, with the lab’s entire staff laid off, GISP and other surveillance programs face an uncertain future. “The data will not be there this year, and that makes me sick to my stomach,” a former employee stated. The lab also served as the U.S.’s central reference for STD testing, ensuring the accuracy of diagnostic tools nationwide. Without it, experts warn of potential declines in testing reliability, which could hinder timely interventions and exacerbate STD outbreaks.

Ripple Effects on Biotech and Public Health

The closure comes at a precarious time. STD rates have surged in recent years, with a FAIR Health study noting a 4.8% increase in diagnoses among commercially insured patients from 2020 to 2023, including sharp rises in syphilis (29.4%) and gonorrhea (16.8%). Losing the CDC’s STD lab could weaken the U.S.’s ability to respond to these trends, particularly as drug-resistant gonorrhea threatens to outpace available treatments.

For the biotech industry, the layoffs compound existing challenges. The sector is already reeling from a prolonged downturn, with the S&P Biotech ETF index hitting an 18-month low in April 2025, down 20% this year. Mass firings at the Food and Drug Administration (FDA) and National Institutes of Health (NIH), alongside the CDC cuts, have sparked fears of delayed drug approvals and reduced research funding. Small- and mid-cap biotech firms, which rely on FDA feedback to advance clinical trials, face heightened risks. “The regulatory agency is impaired,” said Paul Ariano of Thornburg Investment Management, noting delays in FDA meetings and feedback.

Moreover, the layoffs disrupt the pipeline of innovation. The CDC lab’s work on antibiotic resistance directly informs biotech companies developing new antimicrobials and diagnostics. Without its data, firms may struggle to prioritize R&D, potentially stalling progress on next-generation STD treatments. The uncertainty has also chilled investor confidence, with biotech companies raising just $4.2 billion in 2025 compared to $11.1 billion the previous year.

Global Health Implications and Strategic Gaps

Moreover, the CDC lab was not just a domestic asset; it was one of three global reference laboratories for STDs under the World Health Organization (WHO) until the U.S. withdrew in 2024. Its closure leaves a void in international efforts to track drug-resistant STDs, particularly gonorrhea, which the WHO identifies as a growing global health threat. The absence of U.S. leadership could weaken coordinated responses, especially as only one reliable drug remains to treat gonorrhea. 

Meanwhile, the Trump administration’s broader health policy shifts add to the chaos. Health and Human Services Secretary Robert F. Kennedy Jr. has not outlined a plan to replace the lab’s functions, leaving STD prevention and control in limbo. The shuttering of the HHS Office of Infectious Diseases and HIV/AIDS Policy further signals a retreat from infectious disease leadership, raising concerns about the U.S.’s ability to address emerging threats.

Opportunities for Other Nations

The U.S.’s withdrawal from STD surveillance creates openings for other countries to fill the gap, particularly in biotech and public health. Nations with robust biotech ecosystems, such as China, Germany, and the United Kingdom, could seize the opportunity to lead in STD research and diagnostics. Here’s how they might capitalize:

– China: China’s biotech sector is rapidly expanding, backed by significant government investment. By enhancing its STD surveillance programs, China could position itself as a global leader in antimicrobial resistance research. Its advanced sequencing capabilities and large patient cohorts could accelerate the development of new diagnostics and treatments, attracting international partnerships. However, geopolitical tensions may limit collaboration with Western firms.

– Germany: Germany’s biotech industry, known for precision diagnostics, could invest in STD reference labs to serve Europe and beyond. Companies like Qiagen, already leaders in molecular diagnostics, could partner with the Robert Koch Institute to expand surveillance networks, filling the void left by the CDC. This move could boost Germany’s biotech market and attract EU funding.

– United Kingdom: The UK’s National Institute for Health Research and companies like GlaxoSmithKline have the expertise to develop advanced STD diagnostics and vaccines. By establishing a WHO-aligned reference lab, the UK could strengthen its global health influence and drive biotech innovation, particularly in antimicrobial development.

To succeed, these nations should prioritize public-private partnerships, leveraging biotech firms’ R&D capabilities alongside government-funded surveillance programs. They could also adopt the CDC’s model of connecting regional labs with clinics to ensure real-time data collection, a strategy that proved effective for GISP.

Industry Insights and Market Outlook

Furthermore, industry leaders are sounding alarms about the layoffs’ long-term impact. “The loss of experienced leadership at the FDA will erode scientific standards and broadly impact the development of new therapies,” said John Crowley, CEO of the Biotechnology Innovation Organization. The uncertainty has stalled major pharma and biotech deals, with executives navigating unpredictable White House policies and potential tariffs.

For investors, the focus is shifting to biotech firms with diversified portfolios and strong cash reserves. Companies like Arbutus Biopharma, which announced layoffs in March 2025 amid funding challenges, highlight the sector’s vulnerability. Yet, lower interest rates, if pushed by the Trump administration, could ease borrowing costs for capital-intensive biotechs, offering a potential lifeline.

As the U.S. grapples with the fallout from the CDC layoffs, the biotech industry faces a pivotal moment. The loss of the STD lab threatens not only public health but also the innovation pipeline that drives biotech growth. Other nations, sensing an opportunity, may step up to lead in STD surveillance and antimicrobial research, reshaping the global health landscape. For now, the industry watches closely, hoping for clarity from HHS and a strategy to restore critical capabilities. Until then, the fight against STDs—and the biotech market’s stability—hangs in the balance.

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Author

Bernice Lottering