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A 2-Month Delay of Sequestration … Tick, Tick, Tick

January 5, 2013

As widely reported, Congress averted the “fiscal cliff” by resolving some issues and deferring action on a host of others. Sequestration, which would have imposed an 8.2% cut on FDA funding in FY 13, was delayed. If Congress cannot agree on a replacement for sequestration, then the cut on March 1 would be smaller (both on a percentage basis and in absolute dollars).

If the sequester were to go into effect, our initial estimate is that the agency would need to find about $250 to $270 million in savings in FY 13. This is based on OMB’s September estimate plus sequestration of a percentage from the generic user fees, adjusted to account for 7 months of savings rather than 9. A more precise estimate is not possible with current information.

The delay gives us additional time to work with Congress on alternatives that protect FDA and the vital services it provides the American people. We want Congress to abandon across-the-board cuts and allow the Appropriations Committees to do their job: determine national priorities and make sure they are funded. In such an environment, we are confident that FDA will be adjudged a core government function and can justify current funding levels (and more).

We are often asked: What will happen if sequester cuts are imposed (even at the lower March 1 level)? There is no fixed list of activities that the FDA will drop, but significant programmatic and manpower reductions would be inevitable.

If sequestration of FDA funding occurs:

  • Food will be less safe and consumers may die
  • Drug and device approvals will be slower, conflicting with promises made to consumers and companies
  • Problems with imports and globalization will become more numerous, and
  • Three new laws (involving food safety, drug and device safety and efficacy, and biosimilars) will be slowed in their implementation and many programs to modernize FDA process will be halted.

Two extra months to make these arguments is a blessing, but it will not lessen our overall concerns about sequestration.

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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