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FDA After the Election—Part 1: Budget


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.


*  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.

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