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Time for a Deep Breath Before the New Year Begins

December 16, 2016

For a project I am doing apart from the Alliance, I have been asked to identify key events and activities that will shape FDA in 2017. Some of the items include: how FDA is perceived by the Trump Administration; the potential for food- or drug-related crises to change priorities; the need for a solid base of resources for FDA (funding and personnel); and Congressional consideration of user fee reauthorization (both user fees and whatever else might be added to the legislation).

While the Alliance is concerned with only with one of these — the need for a solid base of resources for FDA — I could probably show how all of these either affect, or are affected by, budget authority (BA) appropriations. However, for this end-of-the year column, I am going to stick with the need for a solid base of resources for FDA.

As to the BA appropriation, FDA will be funded in FY 17 under a continuing resolution at FY 16 levels, at least for the first 7 months of this year (through April 28, 2017). Not only does this place a cap on growth in this fiscal year, but it also brings a level of uncertainty that makes it hard for federal agencies to plan for the entire year. As just one example, agencies like FDA need to be careful with hiring new employees, in case the funding level for the last 5 months of the year is lower than the FY 16 level.

The extra $20 million for Cures activities included in the CR is a welcome supplement, but one that comes with its own stream of new responsibilities that are likely to cost even more to implement than will be appropriated. Nonetheless, we are appreciative of Congress’ recognition that FDA needs additional funds when its mission expands.

Looking ahead, the outlook for the U.S. budget is grim. As projected by CBO, the annual deficit will start increasing dramatically over the next few years as more baby boomers qualify for Social Security and Medicare. Also, as interest rates rise (first increase yesterday by the Federal Reserve, possibly three more increases next year), so too does the amount the federal government pays in interest on the national debt. These, and other factors, will place increased pressure on Congress to reduce discretionary spending. (Note that that is as futile as it is inevitable: eliminating all discretionary spending would do little to offset the coming increases in mandatory spending that result from an aging population.)

The discretionary budget picture is no brighter. Under the budget agreement enacted several years ago, the budget ceiling for non-defense discretionary spending increases by very little each year. This means that growth by some agencies, such as FDA, will need to be paid for by cuts in other non-defense programs. Further, proposed growth in defense spending might come at the expense of non-defense programs.

Turning briefly to the other resource issue — personnel — the agency has nearly 1000 vacancies. Provisions in the recently enacted 21st Century Cures legislation will certainly help with recruiting and filling many of these slots, but there is no single solution to getting these positions filled. The FDA stakeholder community needs to treat this as a critical situation and work with FDA to determine additional solutions.

Potentially, the large number of vacancies also courts disaster for the agency. President-elect Trump has said he will impose a federal hiring freeze once in office. There are exemptions for public health and public safety jobs, but no one can be sure at this point whether all, or only some, of FDA’s open slots will be exempt.

In sum, looking at both budget and personnel at FDA, next year looks to be a challenging one. I am optimistic that our advocacy and education efforts can prevail. To do so, we will need to be even more persuasive about the resource needs of FDA, especially why the agency’s mission and responsibilities need to be fully supported by the new Administration and Congress.

On behalf of the Alliance, wishing you a joyous holiday season and a happy and healthy new year. See you in 2017.

Note: The Analysis and Commentary section is written by Steven Grossman, Deputy Executive Director of the Alliance for a Stronger FDA.

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