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Reading the Tea Leaves Prior to the CJ

March 16, 2019

Q:  While we wait for the, yet to be released, Congressional Justification, what else is known about the President’s FY 20 Request for FDA?

A: As proposed, the FDA budget would provide a $362 million increase in BA appropriation above the FY 19 Continuing Resolution (the base used in the President’s Request), a $120 million increase in existing user fees (annual inflation adjustments within the five year agreements), and $161 million in proposed new user fees. The BA increases are intended to support expanding programming to combat opioid addiction, transform medical device safety, increase cybersecurity, and promote innovation through a CDER knowledge management system. Also mentioned are new or expanded initiatives on reducing pathogens in the blood supply and on regulation and oversight of drug compounding. Food safety initiatives include signal detection of foodborne illness, FSMA implementation and food and feed ingredient review.

The increases in existing user fees appear to be limited to annual increases built into many of the 5-year agreements (i.e., this is additional money, but not new money). Proposed new user fee programs include expansion of existing tobacco user fees and a new program of fees to support modernizing over-the-counter monographs.

While awaiting the FDA CJ for additional information, the best sources for now are the Commissioner’s statement on the budget request, here, and the HHS Budget in Brief document found here. Note that the chart on the first page of the Budget in Brief combines all program funds — BA, user fees, and proposed user fees. The BA monies are aggregated on the second page, but not broken out by program or center, which is one of the reasons that we can’t yet establish the Alliance’s FY 20 “ask.”

Q: Every time we ask about the FY 20 appropriations process, you say it is going to be difficult. Does the President’s request improve the situation?

A: No. If anything, it makes it even harder to imagine an easy year with early completion of the appropriations bills. Perhaps the only positive force is that almost all Congressional appropriators would be delighted to reach September 30, 2019, with all 12 FY 20 appropriations bills completed and enacted in law. They see multiple continuing resolutions and shutdowns as evidence that the appropriations process isn’t working well.

One thing that has gotten bumpier is re-setting the budget ceilings for FY 20 (and probably  FY 21), which is necessary to avoid more than $70 billion in cuts to defense programs and more than $50 billion in cuts to non-defense programs. Politically, a deal has to be based on a quid pro quo between Members wanting more defense spending and Members supporting increased NDD funding. This was never going to be easy. The President has made it harder by proposing numbers that fully implement the NDD cuts, while stashing extra monies for defense spending in a separate account that is outside the caps and meant to fund military action, such as wars. President Trump has made clear that he doesn’t want a deal that raises NDD spending and feels he can get increased defense spending without having to agree to lift the NDD ceiling.

Another barrier to a smooth year are several must-pass spending bills that can be become battlegrounds to settle unrelated budget fights. In the short term, there is a need for supplemental appropriations to fund clean-up of natural disasters that occurred in 2018. Later in the year — likely between August and October — the Congress will need to either suspend or raise the ceiling on government borrowing, which could roil markets and lead to the shutdown of some federal services and benefit payments.

Editorial 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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