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The House and Senate Speak. Details Still to Come.

May 23, 2014

There are some interesting differences between the House and the Senate bills. The dollars are not hugely different, but each House chose different priorities. This is only partially reflected in the attached comparison chart that speaks only to numeric differences.

The FY 15 story began with the President’s budget request in early March. The FDA managed to signal that the agency had two “cost” items that were its priorities. The first was $25 million for food safety and the other was $25 million for implementation of drug compounding. Of course, OMB didn’t agree to fully fund those amounts — the net increase requested was only $23 million, with all of it (and a couple of million dollars more) going to CFSAN/CVM/OC for food safety.

Reading the Administration budget documents and charts, the remaining $27 million (needed to net out $25 million for compounding) was to be accomplished by a combination of “economies” (mostly by deferring spending on White Oak buildings that won’t be ready until FY 16) and decreases to other centers: CBER (–$1 million), CDRH (–$3 million), NCTR (–$3 million). In short, regulation of pharmacy compounding — a Congressional as well as an FDA priority — was not being supported by new monies, but rather would be funded from other medical products programs. One can argue these numbers are more rationalized than real. However, that was what the Hill received and had to figure out how to handle.

The House subcommittee decided to stick with the Administration’s $23 million net increase. (Actually, their number is closer to $22 million.) It directed $25 million for food safety and restored funding for the three centers the Administration proposed to cut (+$7 million). As a result, there appears to be only about $12 million, more or less, to apply to the pharmacy compounding program and those dollars are coming from “economies,” not new dollars. A more precise estimate will be possible once the committee issues its report. For example, there may turn out to be other places the House intends for monies to be spent, so the actual amount for compounding may be less.

The Senate committee chose a different path. By opting for a $36 million net increase and including FDA’s proposed “economies,” there should be enough money to fund FDA’s food safety and pharmacy compounding requests, without cutting the three centers. Instead, the Senate decided to follow the Administration’s proposed levels, including cuts to the three centers, full funding of the $25 million increase  for food safety, and accepting the deferral of building funds to FDA’s FY 16 budget. In the Senate bill, extra monies above the Administration’s FY 15 request are to be used to fund a counterfeit drugs program (+$5 million) and to support the National Antimicrobial Resistance Monitoring System (+$4 million). It is unclear how much money this would leave to fund pharmacy compounding — it could be the full request or much less.

How FY 15 will turn out for FDA is still an unwritten story. This week’s rapid activity is only the first few chapters. We still expect further clarifications from the House and Senate on their intentions, plus there could be committee and floor amendments in the House and floor amendments in the Senate. A formal or informal conference committee will almost certainly be needed to reconcile the two bills.

The Alliance will continue to advocate for more FDA funding in the FY 15 cycle and we will soon be starting our advocacy with the Executive Branch for the FY 16 cycle. It is clear that the overly modest President’s request has been a significant restraint on getting more funds. We do know that upwards of $200 million is needed for implementation of FSMA; and with all of the new responsibilities on the medical products’ side, it is impossible to imagine it can be done with the FY 14 funding level. We urge you to stay tuned and stay involved.

Note: This week’s Analysis and Commentary was written by Steven Grossman, the deputy executive director of the Alliance for a Stronger FDA

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