FDA Matters Blog

Archive for the ‘FDA Appropriations’ Category

Sequestration Has Less Impact on FDA? Just Not True

Thursday, August 8th, 2013

“The Hill” newspaper recently reported that: “a survey of federal budgets devoted to developing and enforcing regulations found that many agencies will spend more in 2013 and 2014 than in previous years, indicating that the writing and enforcing of new regulations is largely unimpeded by the massive cuts, known as sequestration.”

That certainly sounds authoritative…until you look at the analysis. In fact, the report’s authors appear to know nothing about the federal budget and have used inherently unreliable data in calculating FY 13 and FY 14 spending levels.  One can only hope that the authors—allegedly academic experts–know more about regulatory policy than they do about federal budgets.

When I first saw the “regulatory spending analysis” from George Washington University in DC and Washington University in St. Louis, I expected to write about how FDA’s budget is mostly not regulatory spending. After all, what fractional part of the FDA’s budget is actually devoted to “writing and enforcing regulations?” And the claim that FDA is growing is highly suspect, as addressed below.

Equally troubling to the “innovation economy” is that funding for the Patent and Trademark Office is counted as regulatory, placing PTO on par with the Securities and Exchange Commission (see page 6 of the report).  It is not a subtle nuance to say they are fundamentally different.

FDA and PTO are the “federal regulatory agencies” projected to have the largest growth and are the linchpins of the GW/Washington University study. If most of their budgets are not regulatory spending, then it is impossible to draw conclusions about how regulatory agencies are faring under sequester.  

But I can’t leave it there because the analysis is riddled with serious methodological issues.

The first of many errors is the use of the proposed spending levels in the FY 14 President’s Budget Request as the measure of what agencies will have to spend in fiscal year 2014. One example of the variation this creates: FDA’s “regulatory growth” is calculated by including the President’s request for more than $200 million in food user fees, a proposal that has drawn no Congressional interest.

More broadly, no one really knows what the actual FY 14 spending levels will be. They are dependent on the resolution of the difference between the House and Senate budget bills (about $90 billion in FY 14 discretionary spending), the actual spending levels adopted by Congress in appropriations bills, the vagaries of funding under (likely) continuing resolutions, and the very real threat of yet another sequester in FY 14. Most federal agency heads would be exceedingly grateful to wind up with as much money as the President requested for them.

The study’s assertions about the FY 13 spending levels are equally unfounded. The GW/Washington University report uses estimated “outlay” numbers contained in the appendix to the President’s FY 14 budget. Since these tables were compiled before the passage of the FY 13 Ag/FDA appropriations or the final FY 13 continuing resolution, the GW study is using estimates based on the President’s FY 13 request (as ungrounded in reality as the FY 14 request), perhaps modified by part-year CR’s passed in late 2012.

In short, the actual FY 13 spending levels were not used in the analysis (indeed, weren’t even determined at the time of the President’s FY 14 budget request). So, the already-unreliable numbers in the report are unadjusted for the subsequent rescission and sequester. How can the authors conclude that “agency spending levels for regulation have increased modestly despite sequester,” without having reliable numbers that reflect the sequester?

Mark Twain once observed: “There is something fascinating about science. One gets such wholesale returns of conjecture out of such a trifling investment of fact.” Thinking of the GW/Washington University study, I can only say “amen.

Post to Twitter Tweet This Post

Funding Cutbacks at FDA: A Sequester Primer

Thursday, March 7th, 2013

 

At a time when FDA’s responsibilities continue to grow rapidly, the agency has been caught in an across-the-board reduction (sequester) in federal discretionary spending, effective March 2, 2013. Although Congress may yet reverse course and restore money to affected federal agencies, this is not considered a high probability.

 

Altogether, FDA will lose about $209 million between now and September 30, 2013. This will reduce inspections, slow drug and device approvals, and restrict implementation of the Food Safety Modernization Act and other recent legislation. Because of the many questions about the process and outcome, this is FDA Matters’ primer on the sequester of FDA funds.

 

How much of FDA’s FY 13 (current year) money is involved and which funds are cut? 

 

Sequestration

FY 13 CR (to 3/27/13)

Less sequester

Net amount

 

 

 

 

Budget appropriations

$2.521 billion

$ 126 million

$2.395 billion

User fees (inc. tobacco & generics UF)

$1.647 billion

$   82  million

$1.565 billion

 

 

 

 

Totals

$4.168 billion

$ 209 million

(rounded)

$3.960 billion (rounded)

 

 

 

 

 

 

 

Will all programs within FDA be cut by precisely the same amount? Generally, yes.  Unless Congress or OMB change the sequester rules (and they might), each Center and the Commissioner’s office will be cut by about 5.0% to achieve the $209 million reduction. However, fixed items (rent, utilities, etc.) will still cost the agency the same amount, creating an internal deficit. This will require additional cuts (above the 5.0%) from the agency’s program activities.

 

Beyond the specific dollars, why will the impact be greater on FDA than on most federal agencies?  FDA is a staff-intensive organization. More than 80% of its funding is spent on personnel-related costs. Much of the remainder is fixed costs, rather than grants or contracts that could be cancelled or cut back. Many federal agencies are hoping to meet their sequester obligations without personnel cutbacks. FDA will do its best to follow this model.

 

FDA has said that no employees will be furloughed as a result of the sequester. How is that consistent with the agency’s staff-intensive nature and the depth of the cuts? To absorb the $209 million without furloughs, most of the savings will have to come from unfilled and/or delayed filling of vacancies—a process that probably started months ago. Many offices are probably already short-staffed and most will become so as we get deeper into the sequester. Hence, the predicted impact of the sequester is slowdowns in food (and other) inspections, drug and device reviews, and implementation of new FDA legislation and its global responsibilities.

 

In offices where staff reductions are needed as part of the sequester but no vacancies exist, some appropriately qualified employees may be saved through internal transfers into slots that can be paid for by the Generic Drug User Fee program (FDA’s one big growth area this year and for which it will definitely need to be hiring).

 

How would you characterize FDA’s “story” about the impact of the sequestration?  While $209M is a large cut with severe consequences, it may well be achieved by a thousand little bits and pieces, a vacancy here, a training contract there, a bunch of cancelled plane flights, some underspending early in the year, etc. It doesn’t make for a very dramatic story, which may account for why FDA has been relatively quiet while other departments and agencies have been talking about the severe impact of the sequester cuts.

 

Conclusion

 

If food is less safe…if drug and devices reviews go more slowly….if problems with imports increase….and if regulatory science and agency modernization stall….then there is a huge loss to the American people.

 

This loss is made larger by the knowledge that the agency’s mission is not static.  Congress has passed 6 new laws since 2009 giving FDA substantially more responsibility. Globalization and complex science makes the agency’s job larger and more difficult each year.

 

FDA staff wasn’t large enough to get the whole job done last year. Problems will  multiply quickly over the coming months as existing employees represent an every smaller proportion of the numbers needed to carry out this year’s and next year’s responsibilities.

 

Steven

*  For purposes of disclosure: I am one of the founders and serve as Deputy Executive Director of the Alliance for a Stronger FDA, www.strengthenfda.org, a multi-stakeholder group that advocates for increased FDA funding.  For more information on joining, contact me at sgrossman@strengthenfda.org.

Note that my duties with the Alliance are in addition to, and apart from, the work of my policy and regulatory consulting firm, HPS Group, LLC, which is the publisher of FDA Matters.  The views expressed in FDA Matters are my own, and those of HPS Group, and are not necessarily the views or positions of the Alliance.

Post to Twitter Tweet This Post

FDA Funding: Agency Mission “At Risk”, Says Alliance President

Thursday, February 28th, 2013

FDA’s mission is “at risk” because of inadequate funding. So says Alliance for a Stronger FDA President Diane Dorman, testifying before the FDA Science Board. Her remarks come 5 years after the Science Board made a similar declaration, concluding that decades of underfunding had left FDA without the resources to fulfill its mandate and make science-based decisions.

Congress responded with more monies for the agency, but since then the FDA’s workload has increased even faster. The current threat to FDA comes from two sources: four major new laws to implement since 2009; and changes in the environment in which FDA operates, notably acceleration of globalization and increasing scientific complexity.

 

Ms. Dorman’s remarks are reprinted below. If you care about FDA, FDA Matters urges you to read her testimony, go to the Alliance’s site (www.StrengthenFDA.org) and join.

 

Testimony of Diane E. Dorman

President, Alliance for a Stronger FDA

Before the

Science Board of the U.S. Food and Drug Administration

February 27, 2013

 

Good afternoon and thank you for the opportunity to address the FDA Science Board.

 

My name is Diane Dorman and I am President of the Alliance for a Stronger FDA, as well as Vice President for Policy at the National Organization for Rare Disorders. The Alliance is a 200-member coalition of all FDA’s stakeholders—consumers, patients, health professionals, trade groups and industry. Our sole purpose is to advocate for increased appropriated resources for the FDA.

 

When we started in 2006, FDA appropriations stood at slightly less than $1.5 billion for an agency tasked with overseeing 100% of drugs, vaccines, medical devices, and personal care products and 80% of our nation’s food supply. Altogether, the products and industries regulated by FDA account for nearly 25% of all consumer spending in the United States.

In short, FDA was the victim of decades of underfunding. It was quite small, despite its vital, complex world-wide responsibilities. Presidents weren’t asking for nearly enough money for FDA and Members of Congress were responding by giving the bare appropriations that had been asked for.

The Alliance’s goal was to change this situation by galvanizing the FDA’s broad stakeholder community to focus attention on the consequences of underfunding. We never doubted the accuracy of our analysis or the importance of our cause.

Nonetheless, it was immensely helpful when–18 months after our founding–the FDA Science Board released its own report in November 2007. As the media described it—the FDA’s own Science Board evaluated the agency’s capacities and responsibilities and declared that the agency’s mission was “at risk.”  The word “crisis” was often used and was an appropriate description of the situation.

Subsequently—and with the Alliance’s broad stakeholder advocacy—the prospects for FDA improved. Policymakers acknowledged the underfunding and acted aggressively to reverse it.

 

Today, in FY 13, the FDA receives slightly more than $2.5 billion in appropriated funding. This amount, might have met the FDA’s funding needs in late 2007 when the Science Board report was issued…BUT NOT NOW.

 

Today, $2.5 billion is dramatically less than the amount the FDA needs. For reasons I will describe in my testimony, the agency’s mission is again “at risk.” Even without the possibility of funding cutbacks, the American people will lose if FDA does not receive increased funding.

 

FDA Responsibilities Grow Each Year Because Congress Enacts New Laws

 

Two months before the Science Board declared FDA to be “an agency at risk,” the FDA Amendments Act of 2007 was signed into law, renewing the prescription drug and medical device user fee programs. It added a slew of new responsibilities, notably in food and drug safety, regulatory science, clinical trial registries, and establishment of a program for risk evaluation and mitigation strategies for new drugs.

 

The new responsibilities–combined with delays in funding of existing and new programming–had severe consequences. For example, FDA’s efforts in the critical area of drug reviews and approvals were slowed substantially for nearly two years, as demonstrated by this CDER chart.

The message from this experience is clear, albeit not surprising: new laws take enormous resources to implement. Once implemented, they permanently increase agency responsibilities.

 

Since 2007, Congress has identified a number of new needs that fall within FDA’s jurisdiction. At least six new laws have been passed in the intervening five years:

  • Family Smoking Prevention and Tobacco Control Act (2009)
  • Biologics Price Competition and Innovation Act (2010)
  • Secure and Responsible Drug Disposal Act (2010)
  • Combat Methamphetamine Enhancement Act (2010)
  • Food Safety Modernization Act (2011), and
  • FDA Safety and Innovation Act (2012), including re-authorization of the Best Pharmaceuticals for Children Act and the Pediatric Research Equity Act

This is hardly the end of it. Congress is already looking at a number of legislative initiatives for 2013, covering topics such as:

  • Bio-security
  • Track and trace/counterfeit products,
  • Drug compounding, and
  • Drug shortages.

 In addition, this year’s legislative requirement–renewal of two Animal Drug User Fees–is widely seen as a vehicle for other legislative mandates that FDA will need to implement.

 

The problem is not solely Congress’ urge to legislate. While some of our Alliance members may quibble with some of the new programs and requirements, overall I believe there is strong public and stakeholder support for Congress addressing unmet needs and emerging challenges. We all want safe foods and safe and effective medical products.

 

Ultimately, the real problem is Congress’ failure to acknowledge FDA as a funding priority despite the austere budget environment. Transforming FDA’s mission and responsibilities needs to be met by the necessary resources to do the job well. The current appropriations level is totally inadequate to make up for decades of underfunding AND all of the new laws enacted since 2007.

 

FDA Responsibilities Grow Each Year Because of Globalization and Scientific Complexity

 

Even were Congress not active in legislating new mandates for FDA, the agency’s mission and responsibilities would grow enormously each year for reasons unrelated to new laws. While the list is long, my remarks will concentrate on two: globalization and increasing scientific complexity.

 

One of FDA’s highest priorities since the Science Board report has been to re-align to adjust for the accelerating globalization in all product categories overseen by the agency. While there is no one way to fully convey the enormity of this shift and the resources required, I offer the following sample of key facts:

      Food Imports are growing 10% annually. Altogether, 10-15% of all food consumed in the U.S. is imported. This includes nearly 2/3 of fruits and vegetables and 80% of seafood.

      Device Imports are also growing about 10% annually.  Currently, about 50% of all medical devices used in the US are imported.

      Drug Imports are growing even more quickly, about 13% annually.  Approximately 80% of active pharmaceutical ingredients (API) are manufactured abroad, as are 40% of finished drugs.

 

Inspections at U.S. ports-of-entry are critical, but ultimately less than 2% of shipments can be inspected. The better alternative–the one encouraged by Congress and chosen by FDA–is to increase foreign inspections and to establish foreign offices to work globally to improve the standards and quality of products entering the U.S.

 

The value of this approach cannot really be quantified. We know that the cost of illness, death and lost markets–from just a single bad actor in a single food category–can cost as much or more than the entire investment we put into FDA’s food safety activities. Drugs and devices are harder to track for a variety of reasons, but there is no reason to doubt a similar effect.

 

In contrast to globalization, greater scientific complexity is diffused into every part of the agency and its mission. That makes dealing with it less visible, but doesn’t make it any less costly.

 

FDA has adopted several approaches, many from the FDA Science Board Report. These include creation of a commissioner-level science office, investment in regulatory science, expanded and more intensive training, changes in time and manpower allotments for complex assignments, and significant reworking of the drug and medical device approval pathways.

 

Specifically, we have identified five areas that FDA is working on to improve the review process and respond to more complex science. Each comes at a cost in additional dollars and manpower:

      Sponsors Need More Meeting Time and Other Feedback from FDA

      Product Applications Require More Patients, Study Sites and Analysis

      Enhanced Timeliness and Consistency of Product Review is Paramount

      Expansion of Pre-and Post-Market Safety is Essential

      Sustain and Increase Core Programs That Enhance Innovation, Speed Approvals

 

Further, safety inspections have also become more complex—requiring more scientific training, more preparation and, often, more time during the inspection itself.

 

FDA: An Agency Still Very Much “At-Risk” for Lack of Adequate Funding

 

It is important to recollect that FDA is a staff-intensive organization. More than 80% of its budget is devoted to staff-related costs. Of the remainder, rent and utilities are fixed costs that must be paid first. There is little grant and contracting to cut.

 

Sequestration is the most immediate threat to the FDA’s already-inadequate funding. Just a few days from now, the agency faces a loss of 5.1% of its FY 13 (current year) budget. This is the nominal rate. The Alliance’s analysis, confirmed by OMB testimony, is that the actual impact will be close to 9%.

 

Even if sequestration is avoided, FDA faces challenging funding battles in FY 14 and beyond.

If cuts occur now or in FY 14—or even if the agency budget stalls and fails to grow over the next few years:

      food will be less safe and consumers put at risk,

      drug and device reviews will be slower, conflicting with promises made to consumers and companies,

      problems with imports and globalization will become more numerous, and  

      critical efforts to modernize the agency and improve its support for innovation will stall.

 

Is FDA’s mission again at risk? Absolutely, yes.

 

And those who have the most to lose are the American people.

 

FOR MORE INFORMATION: www.StrengthenFDA.org or contact Steven Grossman of the Alliance staff at (301) 539-9660, sgrossman@strengthenfda.org.

Post to Twitter Tweet This Post

FDA Post-Election: Continuity and Progress Likely to Mark 2013

Tuesday, January 29th, 2013

Looking back over the last 40 years at FDA (as I have), there are three characteristics that create a more progressive environment at the agency: continuity of leadership, presidential support, and increased funding. For FDA in 2013 (as the saying goes): 2 out of 3 ain’t bad.

In particular, medical innovation seems poised to flourish in an FDA environment where there is continuity of policy and leadership, instead of a new team learning the ropes. I explore this and other themes in the latest issue of Pharmaphorum.com. You can read my thoughts at: http://www.pharmaphorum.com/2013/01/29/fda-post-election-continuity-and-progress-likely-to-mark-2013/.

Steven

Post to Twitter Tweet This Post

FDA After the Election—Part 1: Budget

Monday, October 29th, 2012

 

Apart from an occasional reference, FDA is not part of the campaign dialogue leading up to the November 6 nationwide U.S. election. FDA Matters believes this is probably good—any intelligent  discussion of FDA’s future requires a long-term perspective and a mastery of detail and nuance—both of which are in short supply during “sound bite”-oriented politicking.  

Yet, FDA will be strongly impacted by the election’s outcomes. Part 1 of “FDA After the Election” concentrates on the agency’s budget situation, while Part 2  focuses on leadership and change (http://www.fdamatters.com/?p=2164).

Both parts reflect that ultimately FDA is people-driven—not only by who leads, but also because over 80% of the agency’s costs are people-related. More money = more people = more capability and activity. Less money will have the opposite effect.

The Potential for 8.2% Cuts in January 2013. Most of the current focus is on the potential 8.2% across-the-board federal budget cuts slated for January 2, 2013. Sequester, as the process is known, will leave FDA with about $320 million less to spend in FY 13 than it did in FY 12.

This includes cuts to taxpayer-funded FDA appropriations (about a $2.5 billion base) and user fee revenue (nearly a $1.4 billion base). If the cuts were applied entirely to FDA personnel, the agency would have to lay-off or furlough about 1000 employees.

We know that the sequester of FDA funding has consequences:  food will be less safe; drug and device approvals will be slower; problems with imports and globalization will become more numerous; and FDA modernization will be severely slowed. Note that this is the opposite of what everyone–critics included–wants. The precise impact is hard to quantify because FDA will try to prioritize its remaining manpower to avoid immediate disasters and avoid any visible failure to approve life-saving therapies.

Congress does not want to reduce the federal deficit through a sequester. This view is supported by President Obama and his opponent, Governor Romney.  Despite this seeming unanimity, an alternative deficit reduction package would need to deal with entitlement programs and taxes. So—politically—deficit reduction is a mess and sequester may happen.

Budget Threats Will Continue, Regardless of Sequester. Even if sequester were somehow to be avoided, pressure on federal spending will continue far beyond the immediate future. Sequester is the most immediate hurdle in what is likely to be an annual challenge to all federal agencies, including (and especially) FDA.

In the face of this, the Alliance for a Stronger FDA* is asking Congress for three sane and sensible things that should help FDA:

  • Recognize and properly fund the special and growing role of FDA as a protector of food and drug safety and a gateway to medical innovation and science.
  • Find alternative means to reduce the budget deficit and avoid the across-the-board sequestration of 8.2% of federal agency funding on January 2, 2013.
  • Return federal budget-making to a process under which national priorities (such as FDA) are adequately funded.

The Alliance’s call for a return to funding based on national priorities is a statement of faith: that FDA is a core function of national government and that we can demonstrate that funding the agency is essential.

Re-affirming FDA as a National Priority. We should not, however, assume that FDA’s core governmental role is self-evident to everyone. We need to convince policymakers, the media, and the public that we belong in the very special group of federal programs that need to grow–even as other important programs suffer cutbacks and some even wither and die. Implicitly, the responsibilities of the federal government are going to be redefined, whether consciously or as the residue of decisions that will be forced on the President and Congress after the election and over the next few years.

How well will FDA compete for scarce dollars, assuming that the situation is not pre-determined by across-the-board cuts? The elite tier of federal programs has some heavy-hitters, such as air-traffic controllers and the nation’s judiciary. The absence of funding in their areas often has more concrete and immediate consequences than a lack of funding for FDA.

With FDA funds being used to oversee products and services that mount in the trillions and encompass 25% of consumer spending….our case is equally compelling. Everyone involved with FDA has an obligation to make themselves advocates for increased funding.

Steven

*  For purposes of disclosure: I am one of the founders and serve as Deputy Executive Director of the Alliance for a Stronger FDA, www.strengthenfda.org. It is the only multi-stakeholder (consumers, patients, health professionals, industry) that advocates for increased FDA funding. Our strength is in the breadth and number of our members, so I urge you to contact me for more information about belonging. Contact me at sgrossman@strengthenfda.org.

Note that my duties with the Alliance are in addition to, and apart from, the work of my policy and regulatory consulting firm, HPS Group, LLC, which is the publisher of FDA Matters.  The views expressed in FDA Matters are my own, and those of HPS Group, and are not the views or positions of the Alliance.

Post to Twitter Tweet This Post

2012 Mid-Year Report on FDA: Opportunities, Threats and Accomplishments

Monday, July 9th, 2012

 

So much is going on at FDA right now, that it is difficult to pick just one topic for this week’s FDA Matters. Instead, we are going to take a quick tour of some “hot spots” at FDA and how they might affect the agency over the remainder of the year and beyond.

Please read on…there is something for everyone in the topics covered.

The “Lost” FSMA Regulations. At the very end of 2010, Congress passed the Food Safety Modernization Act (FSMA). The law was intended to fundamentally re-set the term under which FDA acts to assure a safe food supply. It focuses on preventing problems, rather than fixing or limiting them afterward. FSMA provides the agency with new authorities and additional resources consistent with FDA’s role of overseeing a global food supply.

The first provisions of FSMA went into effect in January 2012 and additional requirements become effective this month. To guide implementation of these requirements, FDA has produced four draft regulations. None have been published; all are stuck in the review process at OMB.

The mystery of the “lost” FSMA regulations prompted two reporters to call me this past week and ask: is OMB holding back these (and other) regulations until after the election, presumably for political reasons. I couldn’t see an electoral connection, plus the first of the proposed regulations was submitted to OMB in December 2011, a very long time before the election.

The “lost” FSMA draft regulations are worrisome by themselves, but especially with so much else going on at FDA that may require OMB review.  

FDA’s Drug Safety Monitoring Program Hits Target, Will Expand. We don’t read often enough about the successes that come from cooperation and hard-work at FDA. In the 2007 user fee reauthorization legislation, Congress directed FDA to construct a nationwide electronic post-market safety monitoring system that would allow FDA to examine tens of millions of patient records to discover or refute possible safety concerns about FDA-approved products.

In a recent edition of FDA Voice, the FDA’s own blog site, the agency reported that the monitoring system, called “Sentinel,” now has access to the de-identified medical and/or insurance records of about 126 million Americans, collected through 17 data sources (e.g. VA, Kaiser). Sentinel is definitely still a “work in progress” on a number of levels, but it will be of increasing value as medical products become even more complex and even more integral to medical care.  

Funding Ups and Downs. Despite Congressional reauthorization of the prescription drug and medical device user fee programs, the budget authority (BA) (taxpayer-funded) portion of FDA’s budget is still the bulk of the dollars. The Senate has included a small increase in BA funding for FDA for FY 13; the House has proposed a small decrease.

Of compelling concern is the strong potential that FDA (along with all federal discretionary funding programs) will be hit with a 7% to 10% “sequestration”—an across-the-board cut–on January 2, 2013. This would reduce the agency’s budget  by between $175 million and $250 million in FY 13. This is FDA’s “contribution” to saving the federal budget more than $1 trillion over the next 10 years. 

If sequestration occurs, FDA will try to avoid lay-offs by shifting more employees from taxpayer funding to user fees. In that case, increases in user fee income will be backfilling the BA cuts, rather than contributing to real agency growth. Yet, FDA will be obligated to undertake the user fee-driven activities and meet the law’s performance measures as if the new user fee money was paying for additional staff.

User Fee Reauthorization Will Drive, Not Disrupt, the Agency Agenda. Five years ago, the user fee reauthorization (PDUFA 4) didn’t become law until late September, a few days before fiscal year 2008. The combination of immediate deadlines, delays in collecting user fees, and insufficient trained personnel set off a series of problems that took three years to fully overcome.

This time, Congress finished the reauthorization in late June and FDA has been planning the law’s smooth implementation for months. Instead of panic, CDER in particular, seems to be feeling good about the path forward and the many changes called for in PDUFA 5. 

Dr. Janet Woodcock, head of CDER, has listed her priorities as, among other things: timely transition to new user fee requirements (including start-up of new generic drug and biosimilars user fees); dealing with drug shortages, moving forward on data standards and new IT support systems, and advancing regulatory science.

Results are still what matters and there are always critics….but a sense of optimism at CDER is always welcome.

 Steven

Post to Twitter Tweet This Post

FDA Progress “At Risk:” An Update on Funding and a Call to Action

Sunday, March 25th, 2012

FDA MattersState of the FDA—January 2012 identified agency funding as the greatest threat to the FDA’s future. The agency received a very small increase in FY 12 appropriated funding, reflecting the severe budgetary pressure on all U.S. federal agencies. That pressure continues and FDA faces potential cuts in FY 13 (starting October 1, 2012).

Advocacy by the Alliance for a Stronger FDA and other stakeholder groups is critical to sustaining the agency’s appropriated funding and pressing Congress for increases to meet the growing demands on FDA. This column explains the budget situation and calls upon all stakeholders to support increased FDA funding. 

FDA was massively underfunded for two decades. Since 2007, Congress has reversed course and increased the agency from $1.5 billion to $2.5 billion in annual appropriated (non-user fee) funding. The agency is also viewed much more favorably than it was then.

However, the agency received a miniscule $50 million increase in FY 12 appropriated funding. Although this was more than many federal agencies, it is inadequate for FDA’s growing responsibilities. Even still, the agency made good progress on its key objectives in FY 12, mostly by stretching the dollars as best it could.

FY 13 funding could be much worse, while the agency’s responsibilities continue to grow. New Congressional mandates include the Food Safety Modernization Act (FSMA), the Biologics Price Competition and Innovation Act (biosimilars), and bio-defense. In addition, amendments to the user fee reauthorization legislation will impose new requirements (unfunded mandates) on the agency beyond what will be paid for by user fees.

The other sources of growth in FDA’s responsibilities are unrelated to Congress. These include: continuing growth and increased demands of globalization; science’s growing complexity; agency initiatives to promote innovation and regulatory science; and “the unexpected,” whether new foodborne pathogens, drug shortages, or new scientific discoveries that add to the agency’s responsibilities.

FDA must overcome two barriers to obtain more funding. The first relates to how Congress views FDA. Does Congress recognize FDA as providing essential governmental services that must be supported, regardless of budget cuts? Does Congress view FDA as doing a good job with the money it receives? In particular, has it used the increased funding over the last 6 years to improve its effectiveness? Does Congress feel any urgency about funding those FDA activities (e.g. implementation of FSMA) that can only occur if funding is increased in FY 13? 

The second barrier is the overall environment in which budget decisions are being made, especially the aggregate amounts Congress is willing to spend on domestic discretionary programsThe FY 12 appropriations process was driven by pressures to reduce spending. Largely because of lower House spending ceilings, FDA faced the possibility of a $275 million cut under the House-passed bill. FY 13 now looks like it may become a repeat of last year, with the House again choosing lower aggregate spending levels than the Senate. This sets up the possibility (maybe even likelihood) that the House will again vote for a large cut in FDA funding, while the Senate may be barely able to maintain current funding levels.

This is not an acceptable situation. FDA oversees nearly 25% of all consumer spending and touches the lives of every American every day. It’s not just the food, drugs and devices that we commonly think about, but also vaccines, diagnostics, cosmetics, pet food, dietary supplements and so on.

Further, as this blog’s growing global readership  attests….FDA’s decisions affects the lives of hundreds of millions of people outside the U.S. Many countries rely on FDA’s standards of quality and its regulatory decisions. Further, every country in the world is part of the global market in the import and export of FDA-regulated products.

Belonging to the Alliance for a Stronger FDA helps demonstrate support for the FDA. The Alliance’s membership includes all stakeholders —consumer, patient and research advocacy groups, professional societies, companies and trade groups, consulting firms and individuals. A stronger FDA is the only thing they all agree upon…and this carries great weight with Congress. The Alliance’s views on FY 13 FDA funding can be found here. 

For more information about the Alliance, go to www.StrengthenFDA.org or write to me at sgrossman@StrengthenFDA.org.

Steven 

For purposes of disclosure: I am one of the founders and serve as Deputy Executive Director of the Alliance for a Stronger FDA.

 

My duties with the Alliance are in addition to, and apart from, the work of my policy and regulatory consulting firm, HPS Group, LLC., which is the publisher of FDA Matters.  The views expressed in FDA Matters are my own, and those of HPS Group, and are not the views or positions of the Alliance.

Post to Twitter Tweet This Post

The State of the FDA—January 2012

Tuesday, January 24th, 2012

FDA is the only federal agency that touches the lives of every American several times every day. Its remarkably broad mandate includes all medical products and 80% of the nation’s food supply, plus countless other products. Despite this, when the President delivers his State of the Union (SOTU) address to Congress this week, it is unlikely that FDA will rate a mention.

FDA Matters will instead provide its second annual “State of the FDA.” As reflected in last week’s column, FDA did well in 2011, but one year’s progress does not change the continued precarious state of the FDA. Here is our analysis:

Strengths: FDA’s most important strength is the dedication of the agency’s staff  and the leadership of Commissioner Hamburg’s team. In the current environment, their efforts are invisible to the public they serve and largely unappreciated. If safe foods and safe and effective medications are important to you, say “thank you” to the FDA staff that make it possible.

The agency’s independence is another key strength of the FDA. At the moment, many FDA observers don’t see it that way, viewing the HHS Secretary’s decision to overrule FDA on Plan B as evidence that the agency is weak and dependent. However, Plan B is a ‘one-of-a –kind” controversy, presenting uniquely difficult and combustible issues that aren’t present in 99.9 percent of FDA’s decisions. If you look at the totality of FDA actions, the agency is remarkably independent from HHS and the White House. Rather than a weakness, this is one of the agency’s strengths.

Weaknesses: Despite a number of recent, laudable efforts at improvement, the FDA is still disorganized and largely ineffective in communicating its messages to the public, media, stakeholders and Congress. Notably, an analysis published in the journal, Medical Care, last week concluded that: although some [FDA] communication efforts had a strong and immediate effect, many had little or no impact on drug use or health behaviors and several had unintended consequences.

FDA’s information technology (IT) systems continue to be grossly inadequate for an agency with such large, far-flung and complex responsibilities. Some progress has been made with analytic data bases, such as the Sentinel program to track post-market safety, and with data bases that improve the flow of information within the agency and between field and headquarters. The October 2011 appointment of a new chief information officer with industry experience is a hopeful sign.

Opportunities: The promise of science has never been brighter. And Dr. Hamburg, to her credit, has made it a priority to improve the agency’s scientific bench strength—better credentials, better training and better tools.

This provides FDA and the medical products industries with the opportunity to forge a new “social contract” with regard to scientific standards and product approvals. FDA must commit to becoming less formalistic and bureaucratic in its dealings with companies. It must demonstrate (not just accept) that advancing medical innovation is an integral part of the FDA’s role in promoting public health. In turn, industry needs to accept that “science, fairly evaluated within predictable guidelines,” is an appropriate expectation as opposed to a system based on short-cuts to market and ill-defined, “leap of faith” assumptions about safety and efficacy. In addition, industry bashing of FDA needs to end. It is counterproductive to everyone’s interests.

Equally promising is the opportunity to significantly upgrade the safety of the American food supply. Even with the devotion of FDA staff to this cause, we are lucky that the reported levels of foodborne disease and product adulteration are not higher. The year-old Food Safety Modernization Act (FSMA) is, by general agreement, a blueprint for moving to a new level, one where a safer food supply reflects smart decisions.

Threats: The largest threat to FDA is inadequate funding. As science has become more complex, industry more global and information more integral to every human interaction, FDA oversees a rapidly expanding portfolio of products and responsibilities. Even without the threat of budget cuts facing all federal agencies, it would be hard to grow the FDA budget enough to stay ahead.

A related threat is the potential for massive expansion of FDA’s unfunded mandates during Congressional reauthorization of the drug and medical device user fee programs. FDA is almost certain to be given new (and needed) authority for drug import inspections and drug shortages. In addition, Congress will consider and most likely pass a dozen or more other new programs or significant changes in FDA regulation. FDA will almost certainly have to implement these new requirements without additional appropriations. 

Steven

For those who may be interested, here is a link to “The State of the FDA—January 2011” http://www.fdamatters.com/?p=1240.

Post to Twitter Tweet This Post

FDA and Congress: Prospects for 2012

Monday, December 19th, 2011

Barely more than a year ago, the US experienced a “wave” election—sweeping a Republic majority into the House of Representatives and reducing the Democratic majority in the Senate. As a result, FDA faced a Congress in 2011 that contained fewer friends and less support than previously.

The consequences, thus far, have been small. Congress became so absorbed with deficit reduction that it accomplished little else this year and spent almost no time on FDA issues. Circumstances will change this in 2012 and, fortunately, we have strong clues about Congressional attitudes and priorities.

At the end of 2010, FDA Matters devoted six blog columns to examining the impact of the election on FDA and its regulated industries. As predicted, Congress was more interested in deficit reduction in 2011 than any other topic. This shows no sign of abating.

For FDA, this means constant pressure from Congress on funding, particularly from sequestration and other threats of across-the-board cuts in federal spending. FDA’s best position is always to have its needs evaluated on an individual agency basis—rather than being part of a larger funding action.

Congress chose not to address FDA’s FY 11 appropriation in the post-election session. Instead, it addressed this in April of 2011 on fairly favorable terms to the agency.

Similarly, FY 12 appropriations demonstrated that Congress was still receptive to partially meeting FDA’s growing resource needs, but it became clearer that future funding increases will be even harder to get. Arguments for FDA being an exception to deficit reduction will be made often next year by agency supporters within Congress and by outside advocates.

In general, very little legislation passed Congress in 2011 and virtually none without bi-partisan support. FDA Matters pointed out that achieving such consensus was possible on FDA issues when Democrats from technology-oriented regions joined with Republicans on positions that could enjoy industry/patient or industry/consumer support. This approach did not produce any legislation in 2011.

However, technology-oriented Democrats are likely to join Republicans in shaping the user fee reauthorization legislation, which Congress “must-pass” in 2012. It seems certain that the bi-partisan pathways will produce most of the legislation, including new authority for drug import inspections, incentives for development of antibiotics and provisions to address drug shortages.

I expected a substantial ramp-up of Congressional oversight and investigations of FDA and regulated industries, which never materialized. There were a few hearings, but never the vehemence or persistence that would have represented a major change from the previous Congress.  I still believe there will be an uptick in these activities, but most likely it will be deferred until late 2012 or 2013, after Congress adopts the user fee reauthorization legislation.

A final column last year asked the provocative question: will the new Congress be good for FDA-regulated industries? Republicans generally want federal regulations and regulatory agencies trimmed back significantly. In contrast, FDA-regulated industries generally want more flexible regulatory requirements and greater certainty in their implementation, but are not interested in eliminating FDA’s regulatory responsibilities or limiting its ability to assure public health and safety.

So far, this Congress has not come to a firm conclusion about FDA. It has not embraced FDA as an essential government service—like national defense and air-traffic controllers—but neither has it marked FDA as a particular target to starve, roll-back, harass or marginalize.

The deciding factor may be how FDA responds to Congress’ insistence that FDA be a positive force in the advancement of American innovation and a contributor to US competitiveness. This is precipitating an identity crisis at FDA, which the agency is working hard to resolve.

If FDA succeeds in integrating innovation into its mission, priorities and processes, then Congress will be able to see FDA (and the support it enjoys) as being essentially different than other regulatory agencies that do not have widespread public support.  This is the optimum position for FDA in its relationship with Congress.

Steven

Post to Twitter Tweet This Post

FDA’s Fuzzy Funding Future

Monday, November 28th, 2011

While not all of FDA’s problems are caused by a lack of resources, few of its problems can be solved without better funding. Money matters. “Safer foods” requires funding to implement the Food Safety Modernization Act. “Faster and safer drug and device approvals” are only possible with funds to pay additional reviewers and build improved regulatory systems.

FDA has an enormous job and its responsibilities grow every year. Funding increases over the last five years have not offset decades of underfunding and under-investment in the agency. FDA Matters believes the next 12 months will determine FDA’s funding future.

The Outlook for Appropriations. FDA’s FY 12 funding is now set. The agency will have $50 million more to spend this fiscal year, for a total of $2.5 billion. While this increase is not large, FDA did quite well in the face of a possible $285 million cut. The agency was one of the few federal programs to receive more dollars than in FY 11.

 It’s too early to project next year’s appropriation. The President’s FY 13 request will be released in early February 2012. Because the Budget Control Act (BCA) of 2011 requires aggregate domestic discretionary spending to be lower than FY 12, competition for funding will become even more intense. Congress will need to be persuaded that FDA funding is a priority and needs to be an exception to funding constraints.

Also as a result of BCA, there is a very real threat to FY 13 FDA funding, as part of mandatory across-the-board cuts (“sequestration”) scheduled to take place on January 1, 2013. Unless Congress passes substantial deficit reduction legislation next year in lieu of sequestration, FDA must prepare for a possible cut in the range of $150 million to $250 million.   

Prospects for User Fees. In addition to appropriations, the Prescription Drug User Fee Act (PDUFA) provides FDA with supplemental funding from industry to support review of applications for new drugs and biologics. A similar program (MDUFMA) supports review of medical devices. There are also several smaller fee programs, as well as user fees that support the FDA’s tobacco center.  This chart shows the amount and growth of revenue derived from industry fees:  

All numbers approximate

FY 2009

FY 2010

FY 2011

PDUFA

$    512 million

$    573 million

$   667 million

MDUFMA

$      47 million

$      57 million

$     57 million

TOBACCO

——

$    235 million

$   450 million

       

All Fee Revenue (inc. smaller programs)

$    637 million

$    922 million

$ 1.224  billion

PDUFA and MDUFMA are expected to be renewed in FY 12 with higher revenue targets. With so much pressure on appropriations, Congress will be tempted to see user fees as the answer to FDA’s growing funding needs. However, user fees are only available for specific purposes and do not support FDA’s full mission.

Further, Congress has no qualms about increasing the amount of user fees, then bemoaning the agency’s increasing reliance on industry funding.  This is not a situation where “all money is green.” Increases in appropriated funding are still critical to a well-functioning FDA.

Delays in Enacting User Fee Legislation and the Possible Impact of Unfunded Mandates. FDA’s future funding is further obscured by the nature of the process of renewing the user fee programs. For example, delays in adopting legislation could result in funding shortages in early FY 13, making it harder for FDA to fulfill its obligations. In turn, this will contribute to Congressional concerns about whether FDA is spending monies efficiently and effectively.

Further, Congress “must pass” renewal of user fee programs in 2012, creating a situation where multiple FDA-related amendments are certain to be considered. Such amendments, if they become law, are likely to expand the agency’s responsibilities without adding additional funds for implementation.

Steven

Here are November 2011 columns you may have missed:

Animal Research: An Update on One of FDA’s Core Values     November 22nd, 2011

Bold Discussions: Possible New Approval Pathways for Breakthrough Drugs November 14th, 2011

By Whose Standards: FDA’s Identity Crisis and the Level Playing Field  November 7th, 2011

Post to Twitter Tweet This Post

© 2009-2012 by HPS Group. All rights reserved. Permission is hereby granted to those wishing to quote or reprint from this site, providing it is properly attributed to FDA Matters: The Grossman FDA Report™.