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One Key Issue; Two Different Perspectives

March 15, 2013

There are two ways to look at how FDA is doing in the quest for enough resources to do its job. The first is in relative terms. We know the budget environment is awful. In light of this, is FDA doing better relative to other agencies that might also have urgent cases? The second is in absolute terms. For the current or next fiscal year, will FDA have more or fewer dollars to spend, especially because its mission and responsibilities continue to grow?

In relative terms, the Senate’s Mikulski-Shelby bill appears to be a big plus for FDA. It would achieve three important goals for the agency in FY 13 that are better than the House proposed CR and that represent better treatment than all but a handful of federal agencies:

  • All of the changes subsequently adopted in FDASIA have been included (two new user fees plus higher cap levels for PDUFA and MDUFA).
  • FDA’s budget authority appropriation for FY 13 will be increased by $24 million in FY 13 over FY 12 (not considering the impact of the sequester).
  • In addition to the larger regular appropriation for FDA, the Mikulski-Shelby bill includes $50 million in “no-year” (can be spent at any time) monies: $40 million for FSMA implementation and $10 million for improving the safety of the human drug supply

Thus, counting both the FY 13 new BA appropriations and the no-year money, FDA’s nominal increase over FY 12 is $74 million. The sequestered amounts must still be taken from total of both BA appropriation and user fees, as they existed on March 2. Further, as discussed in the news blurb in the top section, there is no guarantee that these relative advantages for FDA will survive the floor debate and a possible House-Senate conference on FY 13 funding.

Absent restoration of sequestered funds: in absolute dollar terms, FDA is almost certain to have fewer dollars to spend in FY 13 than it did in FY 12 for comparable programming. Strictly speaking, FDA may actually still have a small increase because of the $300 million that will be coming in as part of the new generic drug user fee program.

Second, the Mikulski-Shelby bill includes a 2.5% rescission on programs in the agriculture appropriations bill. The same or similar reductions are take in other sections of the bill (i.e., neither FDA nor agriculture programs are being selected out for additional cuts — some form of the rescission applies broadly to all programs).

As of Friday morning, we have checked with multiple sources and do not know whether this cut has been applied at the subcommittee allocation level or to each program amount in the bill. If it’s the first, the nominal numbers reported above are correct and the only reduction from them will be sequester (about 5%). If the rescission is at the program level, then the FDA appropriation numbers would be reduced by both sequester and the rescission (which would decrease FDA monies by as much as another $100 million). At that point, despite the relative advantages of the Senate bill, it is possible that the FDA would do better — in absolute dollar terms — with the House CR.

The Alliance will be on the Hill next week advocating on FDA’s behalf. We will also continue to monitor the situation closely and provide additional details and analysis as warranted.

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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