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The Alliance Will Push, Pull, Remind, and Cajole to Ensure that FDA Can Meet Its Mission

November 16, 2012

This is the week that Congress was supposed to finally confront the “fiscal cliff” … and it would be wrong not to give them some credit for getting started. The election is out of the way. So two things follow: we know who will be in Congress and the White House and be held accountable for whether there is a solution or a crisis. Second, we know that the election did not give anyone a mandate to solve the problem in a particular way (see last week’s Analysis and Commentary).

It is now firmly established that no one wants the sequester to occur. This is really not a surprise — the entire scheme was designed to be so unpalatable that Members of Congress would feel compelled to agree upon some alternative that was unpleasant but acceptable. It worked — measured by the number of options being offered up to avoid sequester and the number of unexpected players (e.g., CEOs, advocacy groups) saying: I would be willing to accept X (taxes, entitlement reforms, etc.) just to make serious progress on the deficit and break this logjam.

But if sequester (so far) has taught us anything, it is that widely expressed unhappiness with a painful solution is a goad to action, but not action itself. Congress and the White House still seem to be widely divided on the path forward and the reality of a deal. Despite what is being said in Washington this week, sequestration might happen. Consequence for FDA: a painful, agency-debilitating, $320+ million cut in available funding. The + is there in part to reflect some uncertainties about the precise amount of user fees that will be sequestered. The OMB analysis that produced the $320 million did not, for example, include the possibility of sequestration of the new $300 million per year generic drug user fee, which could add another $25 million cut to the impact on FDA.

Theoretically, all alternatives are better for FDA than the painful automatic across the board budget cuts that would be mandated under sequestration. However, it is important to appreciate that for what it is: a theory. Until Congress and the White House start putting details together that reflect a balanced, politically feasible (undoubtedly painful) way of cutting federal spending, then there is no guarantee that FDA is “saved” or even better off. If Congress attempts to put off dealing with sequestration until the Spring or the Summer (leave it to the next Congress; buy some time), there will likely be some down-payment required. Until we know better (i.e., there is a signed and sealed deal), we can’t be sure that FDA won’t lose funds, perhaps a significant amount.

We hear also that a possible alternative to sequestration (as across-the-board cuts) might be further severe decreases in the discretionary spending caps that are in effect from 2014 to 2021. Yes, we will get to compete for funds, rather than be cut automatically, but the available funds may be so severely restricted that large cuts will be required even for national priorities like FDA … and getting increases (which the agency needs desperately) may be nearly as impossible as if there were a freeze or a mandated cut. (Although the details of this approach weren’t available to me when this was written, it is possible that, net/net, this alternative turns out to be squeezing 10 years worth of cuts into 9 years — hardly an encouraging prospect).

Finally, there is some renewed life for a grand compromise solution — $3 or $4 trillion in some package of revenues, entitlement changes, and discretionary cuts. I am told that if Simpson-Bowles becomes the model for this, then some form of across-the-board discretionary cuts will be part of the package. So, that brings us full-circle: alternatives to sequester (as now part of law and scheduled for implementation on January 2, 2013) might be better for FDA, perhaps significantly.

However, there isn’t even remotely any guarantee that the alternatives will be better. That’s why the Alliance continues to be so desperately needed: FDA will continue to need a strong advocate to push, pull, remind, cajole, present the details of why FDA resources are essential to fulfilling its mission, which in turn should be a first-order priority of the American people.

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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