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Potentially Increased Risk for Cutbacks as the Squeeze Tightens

July 27, 2012

Four and a half years ago, when I first starting writing Analysis and Commentary for the Alliance’s Friday Update, I saw my task as explaining FDA’s appropriation and the process and politics that surround it.

The situation at the time was very clear: FDA had been underfunded for decades. The Alliance had been able to gain the attention of Members of Congress who understood that FDA needed large increases in order to continue its vital mission. Even through some very tough years for discretionary programs, FDA garnered out-sized increases that were badly needed and long overdue.

Every dollar of increase was hard-fought, but overall the agency grew over 60% during a 5-year period — from a $1.5 billion agency to a $2.5 billion agency. I believe (and have written here many times) that the cost of meeting FDA’s obligations are still rising more quickly than funding, especially when the agency is asked, each year, to implement a larger set of activities. So, while FDA is not as far behind as it once was — the agency is still underfunded.

Making this case is still quite feasible — FDA’s importance and its needs are well-recognized on Capitol Hill (in significant part because of the Alliance’s efforts). What has changed is the Congress’s willingness to provide funding increases for any federal activity — however worthy, important, or needy. Unlike six years ago (when the Alliance effort started), even the nation’s highest priority programs are being told to make do with existing funding or (increasingly often) with cuts.

So, this weekly column that started out being just about FDA appropriations has devoted increasing attention to what I have called “macro budgetary politics.” In any given year, the amount of FDA funding might well be driven by decisions made far away from the Agriculture/FDA appropriations subcommittees or even the Appropriations committees.

An example of macro budgetary politics (one of many) would be the sequestration (across the board cut), which will slash funding for all federal discretionary programs by 7% to 10% on January 2, 2013 and also hit a few mandatory programs. The threat — as described in more detail in last week’s Analysis and Commentary — is that FDA’s FY 13 funding will be cut between $175 million and $250 million in FY 13.

Congress is trying to avoid the sequestration, but to do so will require adoption of an alternative plan that will reduce the federal deficit by $1.2 trillion over the next 10 years. We hope sequestration can be avoided and we will continue to argue that FDA needs to be an exception — that cuts to the agency threaten the public health and will ultimately cost more than the savings. However, we also need to be realistic that Congress is unlikely to grant many exceptions and may, in fact grant none.

What FDA receives in FY 13 will, thus, not be determined by the committees whose jobs it has traditionally been. And, increasingly, FDA’s funding fate has become intertwined with the rest of the federal budget.

The partial shift of focus does not, however, make FDA advocacy any less important. Unless we continue to make the case for FDA funding, the agency will be at even greater risk for cutbacks as the squeeze tightens on federal discretionary spending.

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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