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Now Is the Time for YOU to Take Action, PLEASE

April 21, 2017

In last week’s Analysis and Commentary, we reported on the Alliance’s meeting with OMB. Most of our members, as well as the media, focused on the following observation: “We came away feeling that OMB understands the value of FDA and that the agency is not a primary target of the new Administration.” Some read this as saying: maybe we don’t have to worry so much about FDA because OMB will be helping the agency get enough funding and personnel to fulfill its responsibilities.

Unfortunately, this is not the case. The challenge of the FY 18 budget cycle will be just as great as we feared. Being seen as valuable by OMB and not being a primary target … are a real advantage for FDA, but may not be enough to protect the agency from cuts that could be devastating. This is why I urge you to contact Priscilla Kasper at pkasper@akingump.com to RSVP for our Hill Day next Tuesday. We need to educate Senators and Congressmen about the threats to FDA.

As we interpret the President’s initial budget request, he is proposing to increase off-budget medical product user fees by $1 billion per year and, presumably, take a corresponding amount of money away from the on-budget BA appropriations. The Congress is not going to enact his user fees. As a result, the President’s proposal will look like level funding in the aggregate, but could have the effect of becoming a $1 billion/37% cut in the agency’s BA funding. We described this most recently on April 7, and also here, here, here, and here.

This is quite a mixed message from OMB: we think FDA deserves funding at about its current levels, but we are exposing the agency to cuts that could go far beyond what we are proposing for an agency we intend to dismantle (EPA).

Yet, I understand OMB’s dilemma. To pay for President Trump’s proposed build-up in defense spending, OMB needed to find $54 billion in savings in non-defense programs.  In this context, FDA’s mix of funding sources becomes a tempting target. By proposing new user fees to replace a chunk of budget authority appropriations, OMB netted a paper savings of $1 billion. However, making it into real savings would require FDA to take a billion dollar hit. Ouch!

Interestingly, this is not a new game. I played it 30 years ago when I was head of policy and planning for the Public Health Service at DHHS. This was 5 years before prescription drug user fees came into existence and it was not the Administration’s position to advocate for user fees. Nonetheless, the budget allotment the department received from OMB only left us with $400 million to propose for FDA, which was not enough. So, we proposed $400 million in BA appropriations and inserted $100 million in proposed new medical product user fees. While we were not committed to user fees and no user fee proposal existed, it was a way to signal to the Hill that FDA needed a bigger appropriation than we could otherwise propose.

In a sense the game is the same, but the consequences in this environment are dramatically different. Unlike 30 years ago, the President’s proposed new user fees do not to add to the FDA’s resources and actually risk severely cutting them.

JOIN US FOR THE ALLIANCE’S HILL LOBBYING DAY. WE NEED YOU TO HELP EDUCATE CONGRESS.

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