NASA is making big decisions regarding commercial space. Amid concerns about the viability of the market for private successors to the ISS, the agency is derisking its approach by shifting from major investor to incremental funder.
NASA’s move away from clearly supporting free-flying stations in favor of financing a “core module” is signaling the agency’s tempered view of future customers for LEO. No matter what NASA decides, LEO will still have a major problem: lack of demand.
LEO’s most promising market opportunity—in-space manufacturing—doesn’t yet have the commercial demand to sustain itself. Government support is what will get us there.
The state of LEO: So far, the US government took minimal steps to put its full weight behind LEO-based manufacturing.
- The government is not supporting the necessary orbital infrastructure, by fully funding research or establishing regulatory pathways to incentivize private investment.
- The administration is also not staking out US leadership in microgravity in a way that signals strategic priority.
- Further, NASA’s FY27 budget request makes no mention of supporting microgravity-based manufacturing for the benefit of life on Earth.
And yet, America is on the cusp of a new era. We’re returning to the Moon, and setting our sights on Mars. Artemis II has propelled us into the next phase of human ingenuity in space—one that will expand the bounds of knowledge, inspire a generation of scientists, and provide common purpose.
But the lunar era will be enabled by what we choose to do closer to home, while also returning direct and tangible rewards for all of humankind. The most immediate benefits of the modern space race will reach us from LEO, just 250 miles away.
We’re past the proof-of-concept stage. More frequent, reliable launches are making LEO an accessible frontier that can support manufacturing innovation. In many cases, humans don’t even need to be there. Autonomous, uncrewed systems will play a large part in leveraging microgravity for paradigm-shifting medicines, 3D-bioprinting, semiconductors, and other cutting-edge materials. The question is whether we are willing to support and scale commercial production in LEO to industry-relevant levels.
Past proof: Consider the biotechnology use case. Two decades of ISS research led to improvements that would be impossible in terrestrial labs. Protein crystal research undertaken on the ISS enabled Merck to reformulate the company’s best-selling intravenous cancer drug into a subcutaneous injection, which can increase ease of use for patients.
Looking forward, research development, and manufacturing in microgravity will help us identify treatments for rare diseases, grow micro-organs that can test drugs without the need for animals, and even provide patients with new retinas.
Pharmaceutical and biotechnology companies are finally beginning to explore these capabilities, but progress is slow, platforms are few, and health agencies have not yet caught on to the potential.
A demonstration from the $1.5T pharmaceutical sector, showin it is serious about partnering with space companies would send a powerful signal to investors. But we haven’t seen that yet. The government is partly responsible for that through its absence of enabling decisions.
Recommendations: First, infrastructure. The future of LEO will be built on in-space manufacturing, anchored by a hybrid system of orbital hubs and distributed production platforms. The hubs will provide integration, validation, logistics, and shared services. Free-flying manufacturing nodes will enable scalable, distributed production in stable microgravity environments. This is the kind of infrastructure required to take decades of ISS science from isolated experiments to scaled solutions.
- NASA should support all of these diverse elements (and will need more than its requested FY27 budget to do so). In addition, the Department of War should acknowledge the economic security imperative of a thriving LEO economy, by providing strategic direction for in-space manufacturing.
Next, regulatory. While the US considers its options, the UK is strategically seizing the day, having just announced a cross-governmental approach to catalyze microgravity innovations, while creating regulatory clarity that will allow innovations to be commercialized and put into wide use. The UK government is working across space, health, and civil-aviation authorities to issue coordinated guidance, to provide regulatory proposals, and to engage the full supply chain to ensure success. In the US, Food and Drug Administration (FDA) conversations with industry are extremely nascent and nowhere close to regulatory clarity yet.
- The FDA should align regulatory frameworks with in-space manufacturing capabilities, create equivalent pathways for space-manufactured products, and work with federal biomedical funders to spur drug development and regulatory innovations that lead to approvals.
Last but not least, leadership, policy, and political prioritization. As NASA considers the physical and regulatory architecture that will best enable a thriving LEO economy, the choices it and other government agencies make could propel commercial opportunity, national security, scientific advancement, and public good. NASA cannot do this alone.
- The Department of Health and Human Services, the NSF, and Department of War should convene to shape a coherent strategy that links space, health, and advanced manufacturing.
The bottom line: The Trump administration wants to build a vibrant LEO-based economy that will attract $50B in private investment. But absent these government enablers, we risk surrendering LEO to other countries, including China. In 2024, Europe and China together accounted for more than 50% of global space venture capital funding—–for the first time, US ventures secured less than half of the global investment pie.
Realizing LEO’s broad manufacturing future means investing in in-space manufacturing technologies, materials systems, and orbital platforms. For the near-term biotechnological use case, regulatory frameworks must be aligned to produce better therapies, longer shelf stability, and possibly long-term cost reductions in some of the priciest treatment regimens. This approach means working across federal agencies to strategically incentivize industry, as a market catalyzer.
We can lead, or we can follow. We urge the Trump administration to prioritize the investments, regulations, and inter-government collaborations required to lead. We can innovate and scale in the unique microgravity environment to catalyze a space industrial base that will benefit all of humanity—–or we can cede these advances to other countries.
Now is the moment for us to translate LEO’s potential into approved, deployable space-manufactured products that improve lives right here on Earth.
Anne Cheever, PhD and Ellen P. Carlin, DVM, are senior advisor and partner, respectively, at Pathway Policy Group, a DC-based advisory and advocacy firm.
Cheever was previously a program manager at DARPA, and director for technology and national security at the White House National Security Council from 2023 to 2024.
Carlin previously served as senior staff for the House Committee on Homeland Security, and was co-director and founder of the Bipartisan Commission on Biodefense from 2014 to 2017.
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