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Where Will the Money Be for FDA to “Do More”?

November 2, 2012

Early this year, while Congress was focusing on finishing what became the FDA Safety and Innovation Act (FDASIA), we pointed out the need for Congress to be true to its word. If they want FDA to do a lot more, it is unrealistic to expect it to do so with less (or even the same) money. Notwithstanding this, the Senate Appropriations Committee voted for a small increase for the agency for FY 13, while the House voted for a small decrease. The CR for the first half of FY 13 sets FDA funding at the FY 12 level plus 0.062%. This puts us close to the Senate level, but not quite.

We know it could have turned out a lot worse … and we are smart enough to say “thank you” to Congress — even for a break-even year.  We certainly understand how much worse it could have been and how very few programs received any increase at all.

However, to be truly thankful we need to avoid sequestration — the 8.2% ($320 million) cut  to FDA’s budget that is scheduled to take effect on January 2, 2013. All of the Alliance’s energies are being devoted to moving Congress to some other solution to dealing with our country’s annual budget deficit.

Hopefully, this involves some grand compromise (which inevitably must include entitlement and mandatory programs and taxes) that will take some of the year-to-year pressures off of large, unfair and unrealistic cuts to domestic discretionary programs. Alternatively, we would be satisfied with a compromise that takes national priority programs (including FDA) out of sequester or even language that just excluded FDA.

The most likely result is that Congress will find a way to delay further — leaving a solution to the new Congress. This might involve a set of less controversial cuts that could serve as a “down payment” against the sequestration — while a longer-lasting alternative is being developed next year. It could involve a sequester at a lower percentage, likewise as a down payment.

Actually, the variations on “kick the can down the road” are multiple and we cannot lose sight of the fact that some of them may lessen the loss but still impose significant pain on FDA. Further, this all assumes a degree of compromise in the lame duck session — even if the compromise is only on the means for delay. So, even though delay of some sort might be the most likely outcome, it would be foolish to just assume Congress can accomplish this. Sequester may happen.

Leaving the immediate issue of budget cuts aside, the Alliance also has to look longer term at a very different problem. FDA’s job and the cost of doing it well are growing 10 to 20% per year. Some of this is completely unavoidable: the impact of globalization, growing scientific complexity and expanding FDA-regulated industries.

Some of it — new mandates from Congress — are technically avoidable, but it is not very realistic to think that way. In 2010, Congress reviewed the FDA’s food safety programs. This year it looked at the agency’s drug and device programs. While Congress thinks there is much that needs to be done at FDA to achieve better results — both laws are clear affirmations of Congress’ interest in sustaining and expanding what FDA does. To which the Alliance must ask: where will the money be to do this?

Note: This analysis and commentary is written by Steven Grossman, the Deputy Executive Director of the Alliance for a Stronger FDA.

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