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The “Consolidated and Further Continuing Appropriations Act, 2015”

December 12, 2014

The following information was provided to its members yesterday afternoon by the Alliance for a Stronger FDA.

The “Consolidated and Further Continuing Appropriations Act, 2015” bill was introduced earlier this week and is expected to be adopted by the House and Senate within the next few days.  In the following, we provide analysis of FDA’s funding situation for the period October 1, 2014 to September 30, 2015 (FY 15). Compared to some recent past years, the funding and report language are less complex and easier to understand. A funding chart comparing FY 15 to the previous three fiscal years is attached to this analysis.

FY 15 Appropriations Based on the December 2013 Budget Agreement

A year ago, following the government shut-down, the House and Senate worked out an overarching compromise to avoid obstructive budget confrontations in FY 14 and FY 15 (the so-called “Ryan-Murray bi-partisan budget agreement”). A notable feature was the suspension of sequestration triggers for those two fiscal years.

For FY 15, the Ryan-Murray budget means that total discretionary spending cannot exceed $1.014 trillion. Defense spending receives a bit more than half of this amount and non-defense programs receiving a bit less than half.  Outside these limitations, the pending omnibus legislation would also provide: $5.4 billion of emergency funding to prepare for and respond to the Ebola outbreak; $73.7 billion for Overseas Contingency Operations; and $6.5 billion of disaster aid

The omnibus funds all government agencies for the full fiscal year (through September 30, 2015), with the exception of the Department of Homeland Security, which is only funded through February 2015. This reflects widespread, but not universal, concern about the President’s immigration initiative. There are also a number of additional policy riders contained in the legislation—none specifically directed at FDA.

FDA Will Receive $2.597 Billion in Annual Appropriations and Also $25 Million in One-Time Funding for Ebola

The final omnibus legislation includes a $37 million increase for the agency, about 1.5% more than the previous year. The new monies are directed at programs across the agency, but are concentrated in the area of food safety and specifically implementation of the Food Safety Modernization Act.

According to the Joint Explanatory Statement provided by the Appropriations Committees: the FY 15 “agreement includes the following increases in budget authority: $27,500,000 for food safety; $15,000,000 for pharmacy compounding; $4,820,000 for counterfeit drugs; $3,000,000 for the National Antimicrobial Resistance Monitoring System; and $2,000,000 for foreign drug inspections. The agreement also accepts proposed administrative savings in the amount of $15,689,000.” This nets to the $37 million increase over FY 14.

In addition, the FDA will receive $25 million from the emergency funding for Ebola. This will offset some of the costs of the FDA’s efforts to move vaccines and therapies along quickly, while preserving necessary clinical trial protocols and assuring safety.

Potential Penalty Provision: $20 Million Transfer Related to Opioids

Section 734 of the omnibus appropriations bill provides an unusual (if not unprecedented) Congressional challenge to FDA to complete a guidance for industry in the area of evaluating and labeling of abuse-deterrent opioids. Specifically, if the guidance is not finalized by June 30, 2015, then $20 million will be transferred from the Commissioner’s office to the FDA Office of Criminal Investigations for the purpose of assisting federal, state, and local agencies to combat the diversion and illegal sales of controlled substances.

With regard to report language, the Joint Explanatory Statement provided by the Appropriations Committee incorporates by reference all of the provisions of the House and Senate committee reports compiled and published at the time of mark-ups. The only new cross-agency part of the Joint Explanatory Statement is a reminder to FDA that “the Committees are notified of major changes to existing policies and any significant developments in its operations prior to providing non-governmental stakeholders such information.”

Conclusion: The Alliance’s View

Under usual negotiating protocols for appropriations, the higher of the House/Senate bills is the most you can hope to receive. We were able to get the higher Senate number (about a 1.5% increase) plus the Ebola supplement. We are grateful that the Congress recognized that FDA’s responsibilities continue to grow, but we remain deeply concerned that the agency is falling further behind each year with more responsibilities than funding.

We will continue to remind Congress that FDA’s mission and responsibilities are not static from one year to the next; in fact, they are growing quite rapidly. There are a number of new laws the agency is implementing. Plus, scientific complexity increases every year and globalization is an incredible challenge that shows no sign of leveling off.  Simply put: carrying out FDA’s responsibilities costs more than the monies appropriated to accomplish them.

We are already working on FY 16, which formally starts with the President’s State of the Union in January. We will not only be advocating for increased FDA funding, but will also need to advocate for some type of agreement that prevents sequester cuts being implemented in FY 16.

There will be no additional “Advocacy at a Glance” or “Analysis and Commentary” updates this week.

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