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Why Unfunded Mandates Can Be a Real Problem for FDA

December 5, 2014

Historically, the term “unfunded mandates” refers to any federal legislation that imposes a requirement on state or local governments or the private sector and fails to provide monies for the cost of implementation or compliance. An example might be a federal law expanding Medicaid coverage, but not adding federal funds to cover the states’ costs. Especially for governors, unfunded federal mandates have been a cause for concern and have sometimes strained state budgets.

For advocates for better funding of certain federal agencies, “unfunded mandates” has taken on a different, but wholly consistent meaning. To us, it is the requirements imposed on federal agencies for which no additional funds (appropriations or user fees) are provided for implementation or compliance. This is particularly pertinent to FDA because the agency’s mission and responsibilities have been growing much faster than its appropriation. New federal (Congressional) mandates are only one facet of agency growth. Typically, we also reference the impact of globalization and increased scientific complexity as additional drivers of FDA’s need for additional funding.

The unfunded mandates component is specifically related to legislation and executive orders. There have been a number of new requirements since 2010: food safety modernization, biosimilars, the FDA Safety and Innovation Act (FDASIA), global drug security, and compounding. A relatively small portion of these new programs did receive some additional funding, but far from what is needed to implement them as Congress intended.

Here are some examples of the range of unfunded mandates. Whether substantial or relatively small, whether partially offset or not, unfunded mandates upon FDA add up to a substantial gap between what is required and what the agency has funds to pay for.

  • In 2010, Congress passed FSMA, in effect mandating a complete overhaul of the philosophy, procedures and programs by which FDA tries to assure food safety in 80% of the nation’s food supply. While some additional funds have been added for this enormous set of requirements, it is generally acknowledged that the agency could have used $100 to $300 million more over the last few years to have sufficient funds to do this right and well.
  • In 2013, Congress passed legislation requiring regulatory oversight of drug compounding facilities. The Administration acknowledged that this would require $25 million to accomplish. Instead of adding the money into the President’s budget, the FY 15 request offered a series of offsets that purported to generate that amount from the agency’s base appropriation. However, this was more bookkeeping changes than savings from efficiencies (of which there were some, but they were used to offset other requests).
  • Congress just passed a new law requiring FDA to review pending sunscreen submissions within a year and complete revisions to the sunscreen monogram. We do not have a position on whether the legislation is good or bad. We do know that implementation will require FDA to move personnel from other projects to carry out this mandate — unless the appropriations committee gives FDA the money and personnel slots that are needed.

Mandates can also be quite small, but nonetheless costly. I recently had the opportunity to review a draft piece of legislation that would require FDA to organize itself in a certain way. This is not necessarily good or bad from the Alliance’s standpoint, but my eye was caught by a provision that forbids FDA from covering the cost by making other organizational changes.

In sum, the Alliance is neutral on authorizing legislation (we address only appropriations), but efforts to make the FDA more effective and more efficient should not become unfunded mandates and draw resources away from existing and expanding FDA responsibilities.

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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