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Unfunded Mandates Threaten FDA

FDA is finally moving toward a funding level that will strengthen the agency’s core functions. In FY 08 and 09, the agency received more than $600M in new funds. FY10 is on track for another $295M. The FDA can use all this, and more. It is a vast improvement over a string of years where annual increases were closer to $50M, far less than the amount needed to break even with inflation.

With all this good news, there are still a few storm clouds that could rain on FDA’s parade. The darkest of those clouds is the threat of unfunded mandates that could result from current Congressional initiatives.

Congress has already passed new tobacco legislation, which will be funded by user fees. Also under consideration are food safety reform (likely), follow-on biologics (probable), and drug reimportation (possible). Each of these three will require funds from FDA’s budget.

I don’t know how much it will cost to implement food safety legislation or to bring an entire new approval process into existence (follow-on biologics). Both will be expensive. Reimportation is less likely to become law, but will be very costly if we are to preserve a safe drug supply. Commenting on the overall situation, Chairman Waxman has said: FDA should not be set up to fail by being given new responsibilities without new monies for implementation.

The simple but hard question is: will Congress back new FDA responsibilities by giving the agency substantial additional funding? If not, FDA’s improved budget situation will evaporate in the face of these unfunded mandates.

If new responsibilities add $250M to FDA’s costs and the Agency gets a $300M increase, then that leaves only $50M for strengthening FDA’s core programs and responsibilities.  The agency would be back where it was 3 years ago, when it was consistently receiving appropriations that were less than the 6% annual increase in agency costs.

The threat of unfunded mandates is real, but the time for Congress to act has not arrived. The appropriations bills are not supposed to fund legislation before it becomes law.

If any of the proposed legislation passes quickly, then there may be time for House-Senate conferees to add monies into the FY 10 agriculture appropriations bill. More likely, the vehicle would be supplemental appropriations bills for FY10. The first of these is likely to be late this year or the beginning of next year, making the absence of action at this point understandable.

Still, it would be nice to know that authorizers and appropriators appreciate the problem of unfunded mandates and are talking with each other about it. The key chairs–Representatives Waxman and DeLauro and Senators Kennedy and Kohl—need to see the emerging situation as critical to FDA’s future.

Otherwise, unfunded mandates threaten and may destroy the successful effort to rebuild and strengthen FDA.


PS: Two important footnotes:

  • I have taken no position on the merits of any of the legislation being considered by Congress. My sole purpose in this column is to make sure that funding keeps up with responsibilities.
  • The opinions expressed in FDA Matters are my own. However, readers should know about the Alliance for a Stronger FDA, which has been the leading advocate for increased FDA funding. It is a 180-member, multi-stakeholder group that includes patient groups, consumer advocates, health professions organizations, trade associations and companies. It is also backed by three former HHS secretaries and six former FDA commissioners. I am one of the founders and serve as the deputy executive director. For more information about the Alliance, contact me at sgrossman@strengthenfda.org

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