Hurdles Facing FDA and Its Funding for FY13 -- A Summary

This is the fourth in a set of columns looking at the various hurdles that FDA’s budget must pass before it becomes law. The first column, on January 13, looked at the appropriations schedule for 2012, starting with the President’s State of the Union Address (SOTU) on January 24  and release of the President’s Budget Request on Monday, February 13 ... continuing through the potential for a sequester (across-the-board cut) on January 2, 2013.The second column, on January 20, described the standard scenario for an election year appropriations process, then examined some of the possible variations: the SOTU as the opening of the President’s re-election campaign, the possibility of a Continuing Resolution if the regular appropriations process is not completed (common in an election year), and the year-long overhang of possible sequestration, which could cost FDA $150-250 million from its appropriation.

The third column, on January 27, examined the discretionary spending ceilings for FY 13 and how they limit the funds that will be available to the Agriculture/FDA appropriations subcommittees for them to spend. The net result is that every federal program will be squeezed during appropriations, even before the possibility of the sequester being imposed at the beginning of next year.Today’s column will try to pull all those discussions together into a short summary of what FDA faces this year.First, there will be little or no money available to increase the resources available for FDA. This is not a reflection of the strength of the agency’s case, but rather the breadth of the spending controls being imposed to reduce the deficit. FDA’s mission is expanding, so the agency should rightfully receive an increase in funding ... but we need to be sensitive to how such requests look to a Congress and President that will be reviled over the fact that FY 13 will be the fourth straight year where the federal budget exceeds revenue by more than a trillion dollars.Second, the agency still has good arguments for why it deserves increased funding despite the larger set of spending constraints. And the agency still has friends on Capitol Hill who will make the case for increases. But it may turn out that the reward for being needy is that we get cut less than others, rather than receive an increase. Absolute dollars matter (how much the agency is appropriated), but we need to be conscious that we are also seen in relative terms (“we gave them more/cut them less than other important programs”).

Third, the overall political environment — and the major political themes of the economy, jobs, defense, security — are likely to dominate the political debate. The Presidential election is likely to further divide Republicans and Democrats in the Congress, who have already had a hard time finding common ground.Fourth, unlike almost any other federal agency, it is certain that Congress will pass authorizing legislation this year that affects the FDA. At a minimum, that legislation will include reauthorization of drug and device user fees that pay for about one-fourth of the agency’s budget. For that reason, we will need to be even clearer this year about the importance of public funding of FDA and the needed but supplementary nature of funding that comes through user fees.We can also expect that the reauthorization legislation will become the vehicle for a number of additional changes to the laws and programs of FDA. Regardless of the merit of any specific proposals, they are likely to be unfunded mandates — in that the agency will have to do the work but will not receive any additional appropriation monies to cover the cost.

Finally, and slightly off-point, I encourage you to come the Alliance’s quarterly membership meeting next Wednesday, February 8 at 2 p.m. If you can’t come in person, please phone in. Our speaker is Deborah Autor, FDA’s Deputy Commissioner for Global Regulatory Operations and Policy. Among other things she leads the agency’s efforts to manage the burden of imports and oversees the Office of Regulatory Affairs, which conducts inspections and, legitimately, consumes a large part of the agency’s appropriated budget. Hope to see you there.

Note: This analysis and commentary is written by Steven Grossman, the Deputy Executive Director of the Alliance for a Stronger FDA.