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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.

Posted in FDA and Congress, FDA Appropriations, Planning for FDA's Future | No Comments »

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

Posted in Drug Approval and Access, FDA Appropriations, FDA Leadership, Planning for FDA's Future | No Comments »

“Governing,” Not “Campaigning,” Key to Post-Election FDA

Monday, November 5th, 2012

Since last week’s two columns on “FDA After the Election” (here and here or a combined version here), FDA Matters has been treated to some wild speculation about what will happen next. I have been told, in effect, that “if Obama is re-elected, there will be massive new industry regulation” and also that “if Romney is elected, FDA will be transformed into a non-entity that only says ‘yes’ to industry.”

What history tells us is different: whoever wins will have the burden of governing. As a result, massive new regulation is no more likely than FDA becoming a toothless regulatory agency. Winners, it turns out, spend a lot of time explaining why campaign promises haven’t been translated into action.

Of course, everyone is entitled to their own opinion—particularly to imagine their own worst fears.

My advice, however, is to pour a glass of your favorite beverage (alcoholic or not) and watch the election returns with the calm that is appropriate for democratic elections in the United States. Our Founding Fathers intentionally created a system of checks and balances that limits the ability of any one party or any one election to radically re-create government institutions.

FDA is one of those institutions that is changeable (which is actually a good thing), but not likely to be transformed into something dramatically different.

If Obama Wins.  Year 5 of an incumbent President almost always stresses changes in personnel and policies, rather than continuity.  The focus will shift toward new ways of dealing with budget and fiscal matters, jobs and unemployment, and stabilizing our nation’s global position while winding down our involvement in Afghanistan.  Implementing ObamaCare will likewise be a key priority, as major provisions of the law go into effect over the next few years.

While Obama’s focus will follow the campaign promises, the specific actions will probably not. Most likely, he will still be dealing with a hostile House of Representatives and a sharply divided Senate. Events will occur that will also reshape what happens—something unforeseeable like 9/11 or Hurricane Sandy or something foreseeable like a massive fight over the next extension of the federal debt ceiling.

Given this larger picture, what is the probability that FDA will suddenly turn regulation-happy and start a major push to burden industry? I say “none at all.” The entire tenor of Commissioner Hamburg’s tenure—public statements and actions—has been to try to create more science-based decisionmaking, publish more guidances for industry, and to listen to both Congress and industry about FDA’s role in supporting medical innovation.

If there is more regulation in 2013 and 2014, it will be largely to satisfy the legal requirements of new laws passed by Congress on a bi-partisan basis over the last three years. If that winds up feeling excessive to industry, it will certainly not be because of President Obama’s philosophy.

If Romney Wins. Year 1 of a new President is inherently one of change—but remembering back to four years ago, one could argue that the predominant motif is uncertainty, not change. If Governor Romney is elected, there will be a continuous stream of speculation. Nobody knows…and those fearing the worst will get the most attention.

A newly-elected President Romney will actually be dealing with the same issues as President Obama would be: budget and fiscal matters, jobs and unemployment, foreign policy and implementing (or failing to implement) ObamaCare.  FDA will be very low on the list of priorities—if it appears at all. (A conclusion also reached by Matthew Herper of Forbes).

What changes should we expect with a Romney victory and when will we know? The answer is nothing too dramatic and it will take months to play itself out.

I have argued that a Romney Administration would do best to find a well-known, well-respected, candidate who could win easy Senate confirmation. Taking me at my word, Ed Silverman in a Pharmalot column has suggested that Romney could nominate a well-respected commissioner to cut back on safety and speed up approvals (i.e. carry out Romney’s campaign promises and please industry). However, Senate confirmation will not be easy for such an individual—regardless of how well respected—unless they commit to fairly specific boundaries for such changes. (If Romney wins, you will be hearing much more about this in future columns).

If you are an American citizen, please take the time to vote.

Steven

Posted in FDA and Congress, FDA and Industry, FDA Leadership, Planning for FDA's Future | No Comments »

FDA After the Election—Part 2: Leadership and Change

Tuesday, October 30th, 2012

Apart from an occasional reference, FDA is not part of the campaign dialogue leading up to the November 6 nationwide U.S. election. Yet, FDA Matters believes that FDA will be strongly impacted by the election’s outcomes.  Part 1 of “FDA After the Election” concentrated on the agency’s budget situation.

Part 2 of “FDA After the Election” focuses on leadership and change–directly and as they may be affected by potentially large budget cuts. There are some predictable elements, but other elements with great impact may depend upon the perspective of those in power for the next two years and beyond.

Drivers of Change, Post-Election.  Whether President Obama is re-elected or Governor Romney becomes President-elect, FDA’s primary responsibilities remain roughly the same: to be the guardian of food, drug and device safety and to provide a reasonable and responsible pathway for pre-market review of drugs and devices. Likewise, no President has the power to alter the main drivers of FDA’s increasing workload: globalization, scientific complexity, growing regulated industries and new legislative and regulatory mandates in food safety, drugs and devices.

Historically, change at FDA is affected by:  

  • the interest level of the President (most Presidents aren’t interested in FDA),
  • a growing or shrinking agency budget  (budget cutbacks distract, reduce options),
  • an acting vs. a confirmed Commissioner (“acting’s” tend to be placeholders),  and
  • the political will of Congress (legislation, oversight/investigations, or indifference).

If President Obama is Re-elected….then the two main drivers of change are likely to be whether Commissioner Hamburg decides to stay and the federal budget situation.  

This chart explores the variables and draws some conclusions about the opportunities for change. Not surprisingly, they are greatest if Dr. Hamburg stays and there is no sequester. The worst case would be a sequester and a long-term “acting” commissioner; it is only a slight exaggeration to suggest the agency would be set adrift and some panic might set in.

President

Commissioner

Most like what prior situation?

Budget Status

Opportunities for change

 

 

 

 

 

Obama Year 5

Hamburg

Kessler 1993-1994

No sequester

Change continues

Sequester

Orderly retreat?

 

New nominee

Von Eschenbach    2006-08

No sequester

Orderly transition: some change

Sequester

Disorderly retreat?

 

“Acting” for >  than 6 months

Crawford 2004-05

No sequester

Orderly transition: few changes

Sequester

Agency set adrift?

 

If Governor Romney is Elected…..then the main drivers of change are likely to be his interest level (his plate is likely to be full elsewhere), how quickly he nominates a new commissioner, how controversial his nominee is, and the federal budget situation.

This chart (as the one above) explores the variables and draws some conclusions about the opportunities for change. The best situation would be a well-known, well-respected, candidate who could win easy confirmation. That person would have the opportunity to make a lot of changes—although there would be notable differences if a new commissioner faces budget cuts. The worst case for change would be a replay of 2001-2002, when President Bush allowed more than 18 months to go by without a commissioner in place.

President

Commissioner

Most like what prior situation?

Budget Status

Opportunities for change

 

 

 

 

 

Romney Year 1

New nominee easy to confirm

Hamburg  2009-2010

No sequester

Time to shake the place up

Sequester

Accelerates shake-up?

 

New nominee  hard confirmation (not “acting”)

None?

No sequester

Congressional constraints in exchange for confirmation?

Sequester

How long is someone acting?

 

“Acting” for >  than 6 months

2001-2002

No sequester

Confusion: who to serve?

Sequester

Panic in the streets?

 

Timeframes.  While the charts provide a more comprehensive overview of the prospects for leadership and change at FDA, the scenarios will actually unfold over a period of months. Presumably, we will know who will be President within a day or two of the election. However, sequester (or other budget cuts) are not likely to be determined until later this year or may be delayed into next year.

Whether Dr. Hamburg stays will be both her decision and that of President Obama. That might be announced quickly or not.  If there is to be a Romney Administration, it is likely to be at least March 2013 (more likely later) before a nominee is announced.

Steven

Posted in FDA and Congress, FDA and Industry, FDA Leadership, Planning for FDA's Future | No Comments »

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.

Posted in FDA and Congress, FDA and Industry, FDA Appropriations, Planning for FDA's Future | No Comments »

FDA and the Republican Platform: Harsh Words, Unclear Intent

Monday, September 3rd, 2012

 

Between “the FDA today” and the “FDA in 2013” stands a U.S. presidential election—one that appears to offer Americans a choice of philosophy about the size of government and the role of regulatory agencies.  FDA Matters’ previous blog laid out some very early comparisons between the candidates on regulatory policy and the role of Commissioner.

Along with nominating Mitt Romney as its Presidential candidate, this past week’s Republican Party convention produced the party’s 2012 Platform –a series of policy positions to guide the campaign. FDA reform commands about 180 words—laying out the case for aggressive (although unspecified) changes.

Campaigning vs. Governing. Before looking at the specific words and thoughts in the Republican Platform, it is worth providing some context. One of the enduring lessons of my 50 years watching American politics is that there is often a profound difference between campaigning and governing. The Platform is put together by party delegates from every state, working with subject-matter experts and overseen by the Presidential nominee’s team.

Mitt Romney would not allow a party platform with which he disagreed. However, should he be elected, he will not feel bound by the positions taken in it. That said, the Platform’s words on FDA reform appear to generally reflect other things that Mr. Romney (and his surrogates) have said on other occasions.  What he will want to do about FDA if elected (or even what he will be able to do) is unknown.

The 2012 Republican Platform on FDA Reform. The  platform report states:

America’s leadership in life sciences R&D and medical innovation is being threatened. As a country, we must work together now or lose our leadership position in medical innovation, U.S. job creation, and access to life-saving treatments for U.S. patients. The United States has led the global medical device and pharmaceutical industries for decades. This leadership has made the U.S. the medical innovation capital of the world, bringing millions of high-paying jobs to our country and life-saving devices and drugs to our nation’s patients. But that leadership position is at risk; patients, innovators, and job creators point to the lack of predictability, consistency, transparency and efficiency at the Food and Drug Administration that is driving innovation overseas, benefiting foreign, not U.S., patients.

We pledge to reform the FDA so we can ensure that the U.S. remains the world leader in medical innovation, that device and drug jobs stay in the U.S., that U.S. patients benefit first from new devices and drugs, and that the FDA no longer wastes U.S. taxpayer and innovators’ resources because of bureaucratic red tape and legal uncertainty.

While the rhetoric expressed in the platform is not new to FDA Matters—it has a certain menacing quality when it is “the voice” of an American political party as opposed to a “government is bad” Tea Party leader or a frustrated medical device executive.

It begs the question: didn’t America’s global leadership in the life sciences come in part from the FDA’s competence and high standards and not despite them? I would emphatically say “yes,” but there certainly seem to be others that would answer “no.”

Harsh Words for FDA: Consistent with the Overall Tone of the Platform. FDA definitely needs some improving—as past FDA Matters’ columns have made clear. I try to stay constructive and be mindful that complex problems rarely have simple solutions.

Perhaps more to the point, FDA—by itself and working with Congress—seems to have made enormous strides over the last few years. One could even argue that FDA is already working hard on implementing a “pro-innovation” and “create more predictability” agenda that Republicans should like.

This, perhaps, brings us full circle around to our prior warning not to read too much into campaign rhetoric.

FDA reform is two paragraphs in a 50 page document—one that stridently and broadly promotes smaller government and fiscal prudence, almost regardless of consequences. For example, on budget issues, the Platform calls for “Reining in Out-of-Control Spending, Balancing the Budget, and Ensuring Sound Monetary Policy.”

When government is cast as incompetent and out-of-control, it leaves little space to say good things about federal agencies, such as FDA, that work hard, are underfunded, and are committed to improving their performance. When it comes to FDA, we can be hopeful that Republican candidates are more judicious while campaigning…..and, if elected, more restrained in their actions than their rhetoric suggests.

Steven

Posted in Drug Approval and Access, FDA and Industry, FDA Leadership, Planning for FDA's Future | No Comments »

FDA and the 2012 U.S. Presidential Election

Wednesday, August 1st, 2012

 

FDA Matters has been wondering: when is the right time to start talking about the 2012 U.S. Presidential election and how it might affect FDA’s future? The best answer is: when Congress has finished its FDA policy work for the year. With the enactment of FDA user fee reauthorization legislation and a pending agreement on government funding for the first half of FY 2013 (starts October 1, 2012), it is now time to start talking. 

 

Without picking sides: what issues face FDA after the election and in 2013? How might the agency be affected by whether President Barack Obama is given another four year term or challenger Mitt Romney is elected President?

 

For those of us deeply involved in the FDA world, the most important difference between the candidates might well be their approach to the agency and particularly toward FDA leadership.

 

President Obama has not yet issued any statements about FDA on his   campaign website  . However, based on the last 3 ½ years, he supports FDA and its mission and sees that the agency’s role is likely to continue to grow because of globalization, public health and safety, and the need to encourage innovation. 

 

His overall regulatory positioning might be considered less favorable to FDA. New agency regulations must pass through the Office of Management and Budget (OMB)’s Office of Information and Regulatory Affairs (OIRA). Cass Sunstein, a distinguished legal scholar appointed to head OIRA in 2009, is considered to be more open to de-regulatory approaches that may be inconsistent with FDA’s growing responsibilities. For example, it is his office that is currently holding up some of the regulations needed to implement the Food Safety Modernization Act.

 

The Republic nominee, Mitt Romney, has not yet issued any specific policy statements on FDA. However, he appeared at a medical device company event in late March and       su   ggested     that FDA is part of an “attack on free enterprise” by “the thousands upon thousands of bureaucrats that work in Washington.”

 

His campaign website does not reference FDA, but it does have a position paper on regulation. In it, he advocates:

·                  Imposing a regulatory cap of zero dollars on all federal agencies*

·                  Requiring congressional approval of all new “major” regulations

 

One should never take campaign speeches too seriously. Even allowing for that, it would appear there are significant differences in how the two candidates view FDA today.  These differences may narrow or expand in the three months until Election Day. 

 

Just as the two candidates appear to differ strongly on the role of FDA, they are also likely to differ on their choice of FDA commissioners. This is not just a matter of whether Romney wins, but also if Commissioner Hamburg is thinking about leaving (and we have no knowledge of this, only that it is not uncommon for Administration leaders to leave in the year after a President is re-elected).

 

The history of appointments of FDA commissioners is quite varied, starting with 1991 when Dr. David Kessler became the first Commissioner to face a Senate confirmation hearing. He resigned at the beginning of Clinton’s second term (analogous to an Obama victory and a decision by Dr. Hamburg to leave). It took nearly two years for President Clinton to appoint his successor and the Senate to confirm the appointment.

 

Hiring a new commissioner was not a priority for the new Bush Administration in 2001. Dr. Mark McClellan was confirmed in November 2002, more than 20 months after the new Administration took office. In contrast, Dr. Hamburg was appointed by the Obama Administration and was confirmed by May, a delay of less than 5 months.

 

So, if Romney wins or Obama wins/Hamburg resigns….we may have a new Commissioner quickly or the job may be vacant for a long time.

 

Overall, the differences between Barack Obama and Mitt Romney are likely to matter a great deal to FDA. In turn, this will affect FDA stakeholders….regardless of their politics or their views on whether FDA needs continuous improvement or an outright overhaul.

 

   Steven

 

*   My understanding of this: the private sector cost impact of any new federal regulation must be offset by the private sector savings from repealing or significantly revising an existing federal regulation.

 

P.S. For those wanting more on FDA and the U.S. elections, FDA Matters intends to write often on this topic over the next few months.

Posted in FDA and Congress, FDA and Industry, FDA Leadership, Planning for FDA's Future | 1 Comment »

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

Posted in Drug Approval and Access, FDA and Congress, FDA Appropriations, Food Issues, Planning for FDA's Future | 2 Comments »

A Well-Funded FDA: Only if Congress Stands Behind its Own Words

Monday, June 4th, 2012

 

This week, FDA Matters raises the delicate question: can Congress be counted to act upon its own words supporting the FDA? This is desperately important as Congress makes decisions on FDA’s FY 13 funding and possible sequestration.

 Over the last few weeks, the Senate and the House have passed the FDA user fee reauthorization legislation by large bipartisan majorities with almost no opposition. Both bodies have extolled the importance of the FDA. The urgency of it funding needs have been fully acknowledged. The incredible breadth of support for the agency has been counted and documented. But will Congress provide the funding to back this up?

The single most important determinant of FDA’s success is whether it has the money to carry out its responsibilities. Yet, this is a very tough environment for any agency to receive funding increases.

So, it was particularly encouraging that the FDA’s cause became linked to J-O-B-S during House passage of the user fee legislation. The House Energy and Commerce Committee fact sheet on the legislation begins:

The United States has led the global medical device and biopharmaceutical industries for decades.  This leadership has made the U.S. the medical innovation capital of the world, bringing hundreds of thousands of high-paying jobs to our country and life-saving devices and drugs to our nation’s patients.  U.S. medical device-related employment totals over 2 million jobs, and these are good, rewarding jobs as employees in the device industry earn an average of $60,000 per year.  The U.S. biopharmaceutical industry is responsible for over 4 million U.S. jobs. 

The media has noted that the user fee legislation assures FDA of nearly $6.5 billion in industry monies over the next 5 years. This is indeed a lot of money. FDA will need every dollar of it to meet the commitments it has made in writing to use these monies on specific activities and on achieving specific performance benchmarks.  

User fees, then, are basically set for the next five years. However, they only supplement the funding FDA needs to carry out its responsibilities. FDA CANNOT LIVE BY USER FEES ALONE.  

To conduct the bulk of its functions, FDA received a budget authority (BA) appropriation of about $2.5 billion in FY 12. This is taxpayer, not industry, monies. Assuming a very modest 6 % annual increase in costs and responsibilities each year, FDA will need about $150 million more to meet its responsibility in FY 13. Additional 6% increases would be needed annually in succeeding years.

Using the 6% annual growth and projected out to five-years–as has been done for the user fee monies–FDA will need a total of $15 billion in non-user fee, BA appropriations from FY 13 to FY 17.  This is in addition to the industry contribution of $6.5 billion over the same 5-year period.

Prospects for 6% increases, even in the first year (FY 13), do not look good. The Senate is recommending only a 0.5% increase for FY 13 (about +$25 million of the needed 6% increase of $150 million). The House appropriations subcommittee is marking the bill up later this week. There is no reason to be optimistic since the House is operating under a total budget ceiling that is much lower than the Senate.

Even worse, the BA appropriations portion of the FDA budget faces a potential January 2013 sequester (automatic across-the-board reduction in most federal discretionary spending) of about 8% of BA funds ($200 million).

If the sequester occurs, FDA would be provided only $2.3 billion in FY 13, taking the agency below the funding level it had in FY 10. Even if 6% increases were to start in FY 14 after an FY 13 sequester, FDA would receive only $13 billion in BA funding from FY 13-17. That is about a $2 billion gap in BA funding over 5 years, solely as a result of the possible FY 13 sequestration. 

The modest $15 billion, 5-year estimate for BA appropriations (based on 6% annual increases) does not account for the costs of the Food Safety Modernization Act.  Nor does it account for the increased non-user fee responsibilities Congress has incorporated in the user fee reauthorization legislation (e.g. provisions to deal with drug shortages). Further, the FDA’s job becomes larger and more difficult each year (globalization, more complex science) so that the agency budget should increase by more than 6% each year.  

This brings us back to the delicate question we began with: will the Senate and House stand behind their own words about the importance of FDA and its role in job-creation and the economy?  If so, Congress needs to appropriate more money for FDA in FY 13 and each of the succeeding four years and it must exempt FDA from any sequestration.  

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 member, 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.

Posted in FDA and Congress, FDA and Industry, Planning for FDA's Future | 1 Comment »

Post-Market Safety: Can Sentinel Do Some of the Heavy Lifting?

Wednesday, January 4th, 2012

 

In the FDA-regulated world, success is often defined as approval of a new product or indication based on two, well-controlled clinical trials. However, the scrutiny doesn’t end there. FDA’s mission includes determining whether already-approved drugs perform safely and effectively when used by large numbers of patients in routine medical practice. 

 

To understand what happens under these “real world conditions,” FDA has expanded its post-market  efforts, including development of a monitoring system (called Sentinel) that will be able to track drug usage and medical history information on tens of millions of patients. Although such information will be useful, it can only provide post-hoc inferences, not proof of causation. Even with this limitation, FDA Matters thinks developing the system is worthwhile and may provide multiple benefits. 

 

There are multiple tools for assessing post-approval safety and efficacy that fit loosely under the rubric of pharmacovigilance. When approving medical products, FDA mostly relies on data that comes from pre-specified hypotheses that are tested through randomized, placebo-controlled, double-blind clinical trials. In contrast, the data that comes from pharmacovigilance is inherently less rigorous; indeed it constitutes a form of “data dredging” that FDA abhors. The heart of the problem is that:  

Real world data sets = uncontrolled variables + inconsistent data collection + questionable data accuracy.

When FDA and manufacturers collect adverse events reports, they know there will be underreporting of incidents, as well as limited ability to judge whether problems are drug-related. When FDA looks at the Medicare database, they know that information submitted as part of medical claims is unreliable and subject to systemic bias (e.g. medical coding is designed to support reimbursement, not public health analysis).

The Sentinel database should be superior because it incorporates medical records and patient registry information, along with claims data. Still it provides inferences, not proof.

Active surveillance—continuously monitoring millions of health records—is only worthwhile if these limitations are acknowledged. It can never provide certainty about whether drugs are safe and effective. It can tell you what is worth further examination…but can never tell you the cause of any problem that is identified.

As the FDA mantra goes: association is not causation. No matter how many health records and claims data are reviewed, this is still true.

Clinical trials have limitations, also. Trials don’t tell us how a drug will be used by prescribers. They can never provide complete information about patient outcomes for those individuals with several medical conditions (i.e. multi-morbidity) or who take many medications simultaneously (i.e. poly-pharmacy).

By inference (although not with certainty), pharmacovigilance and active surveillance could bring us closer to addressing potential problems that can’t be resolved by clinical trials. For example, many years ago, I worked on a drug to treat pre-term labor. As I recollect, there were two instances of respiratory problems in a trial of several hundred women. No one could say for sure whether this effect was caused by the drug or occurred at random. A study large enough to find out was infeasible.

Based on the potential respiratory problem, FDA rejected the drug despite the benefits it might have provided to women experiencing pre-term labor. If this same situation were to come up today…maybe FDA would decide differently, knowing it could collect patient outcomes information through pharmacovigilance, particularly active surveillance.

Ideally, FDA would know everything it needs to know about a drug at the time of its approval. Information derived from review of real world data sets can never be as good. But properly understood and carefully analyzed, the inferences derived from pharmacovigilance can add to our understanding about safety, efficacy, drug interactions and side effects.

 

Instead of just using that capacity to identify post-approval problems, FDA needs to incorporate pharmacovigilance into its thinking about when to approve drugs and with what conditions. FDA’s capacity to do pharmacovigilance and active surveillance should lead to a greater willingness by FDA to approve drugs, particularly those with otherwise solid benefit-risk equations, but burdened by questions that cannot be resolved prospectively or through clinical trials (even in phase 4).

 

Patients would benefit if FDA made this one of the Sentinel priorities.

 

Steven

 

This column first appeared on June 21, 2011. It is one of my favorites from last year.

Posted in Drug Approval and Access, FDA and Industry, FDA Leadership, Planning for FDA's Future | No Comments »

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