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Sorting Out the Details of the President’s FY 20 Request

March 22, 2019

Q: What else did Congressional offices tell Alliance members on Hill Day?

A: One of the Alliance’s key messages is that:

Assuring safe food and safe and effective medical products are core functions of government, not unlike assuring safe air travel and providing for the common defense.

Usually, staff do not engage us on this point — seeing it as either self-evident or exaggerated. This year was different; this message visibly resonated with staffers. They wanted to talk more about FDA’s multiple responsibilities and how much the shutdown demonstrated how vulnerable the nation is without a well-functioning FDA.

Q: Why is there so much inconsistency in the numbers attributed to the President’s budget request for FDA?

A: FDA’s budget is complex. One reason is that multiple funding sources flow into the agency. Depending on what you count — BA, BA + user fees, with or without proposed new fees, with or without tobacco user fees — very different numbers can emerge. For a more complete explanation, see an earlier Analysis and Commentary column, here. Another reason is that FDA has so many more functions than other agencies. To take an extreme contrast, the Social Security Administration is enormous, but only has three functions that it repeats millions of times: verify eligibility (for SS or disability), cut and deliver checks to homes or bank accounts, and update addresses. A third reason for confusion and inconsistency — at least this year — is that the base year for comparison is the FY 19 Continuing Resolution levels, rather than the FY 19 final.

Q: Does the President’s budget request include the funds set-aside to pay for 21st Century Cures programming?

A: Yes. This also provides another example of inconsistent numbers. Under the FY 19 CR, Cures funding was carried over at the FY 18 level of $60 million. The FY 19 final provides the full $75 million allowed by law. For legitimate but confusing reasons, this leads the President’s FY 20 request to claim a $15 million increase. Apart from that, the President’s recommendation for Cures funding is meaningless because the Cures monies — which go into the FDA Innovations Fund — come from mandatory funding (not discretionary). This was accomplished by the Senate HELP and House E&C committees agreeing to reduce mandatory spending elsewhere within their jurisdiction. In order to satisfy concerns expressed by appropriations committee members, the money can’t be transferred without being included in an appropriations bill. However, being that the monies come from mandatory programs, they do not count against the non-defense discretionary (NDD) budget cap. Each year, the appropriations committees have transferred these monies to the FDA Innovations Fund in a separate section of the appropriations bill.

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

Advocacy at a Glance

March 22, 2019

Alliance Hill Day Tops 60 Meetings. Alliance staff and members visit Capitol Hill year-round to advocate for FDA funding. A highlight is Hill Day, when we gather our members for a large number of meetings in a single day. This year we had eight teams that completed more than 60 meetings — with appropriators, authorizers, and leadership.  What I heard: the FDA starts this appropriations cycle with a lot of goodwill on the Hill — a combination of (1) Dr. Gottlieb’s exceptional relationship with legislators, (2) ever greater sensitivity to the bad consequences of underfunding an agency upon which all Americans rely, and (3) the President’s request that makes FDA one of the few non-defense agencies recommended for a funding increase. More about Hill Day is contained in this week’s Analysis and Commentary.

FDA Budget-in-Detail Released; Tops Out at 390 Pages. The Alliance is reviewing the detailed FY 20 budget request for FDA, trying to reconcile different program initiatives and funding levels contained in the narrative, charts, and tables. One source of confusion: the proposed increase for BA funding for FDA is $362 million above the FY 19 Continuing Resolution level (the base used in the President’s Request), which is about the same as $255 million above the FY 19 final enacted spending level. On the other hand — and quite clearly — the President has recommended new program initiatives totaling $42 million in food safety and about $370 million in medical products. Because of downward adjustments (offsets), the net number for food is +$38 million in new initiatives and for medical products +$316 million. The sum of all new program initiatives are the higher numbers. More about the budget-in-detail is also contained in this week’s Analysis and Commentary.

House Appropriations Committee Sets April 5 Deadline for Public Witness Testimony for the Record; Senate Sets April 12. Every year, there is an opportunity for public (non-governmental) organizations to submit testimony for the Appropriations Committee record. This year, the House Ag/FDA subcommittee has set Friday, April 5 as the final day to submit testimony. The key documents are Instructions for Public Witness Testimony and Public Witness Truth in Testimony Form. We encourage Alliance member organizations to submit Statements for the Record. Information for Senate submissions is here. If you need additional information or assistance, contact Roger Szemraj.

House Appropriations Committee Could Start Mark-Ups in April. As reported in last week’s Advocacy at a Glance, House Majority Leader Steny Hoyer has expressed his intent to have all 12 appropriations bills passed by the House before July 1. To achieve this, he has said he will clear the House’s entire June calendar to move the bills. Consistent with this, the House Appropriations Committee is going to try to move the first of the appropriations bills in late April. Probably, the Defense, Labor-HHS, and Legislative Branch bills will be the first to move.  Military Construction-VA and Energy-Water round out the first five bills likely to move, although the order might vary. There is also talk of the House moving mini-bus bills, rather than individual ones. Presumably, this would involve putting DOD and Labor-HHS together, which was a successful approach with FY 19 funding.

Wayne Pines on the Durability of Dr. Gottlieb’s Legacy. Alliance Co-Founder, Board Member, and current Vice President, Wayne Pines wrote an op-ed, published in STAT, that explained why he believes that “the policy initiatives Scott Gottlieb championed at the FDA will remain after he departs.”

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.

Advocacy at a Glance

March 16, 2019

Hill Day Coming at the Perfect Time. Now We Need You to Participate (Tuesday, March 19). The President’s FY 20 budget request for FDA is an excellent starting point for what we hope will be a year of growth for FDA. We are one of the few splashes of black ink in a Presidential budget request that is otherwise a sea of red ink for non-defense programs. It’s a vote of confidence in FDA, but it will mean nothing if Congress isn’t equally committed to strengthening FDA. Fortuitously, our big Hill Day is next Tuesday and we have an important message:

assuring safe food and safe and effective medical products are core functions of government, not unlike assuring safe air travel and providing for the common defense. Increased investment in FDA will yield substantial benefit to the American people.

Right now, we need a lot of help from Alliance members and other FDA advocates. Seventy (!) Congressional offices have agreed to meet with us next Tuesday, providing a priceless opportunity to deliver our message … widely and all in one day. We know it is a busy time of year, but we need your help to assure that we have robust and diverse teams on Hill Day. We need more of you to look at your calendars and decide that you can spare a whole day (or even a half-day) next Tuesday to support FDA. RSVP today!

FDA Gains Substantially Under the President’s Request; NIH, Other Public Health Agencies Proposed for Cuts. The president delivered on his promise to propose tens of billions of dollars in cuts to non-defense discretionary (NDD) spending. As a consequence, there is some proposed growth in homeland security and VA, but the rest of NDD spending would be subject to dramatic cuts. Among public health programs, cuts are proposed of $4.7 billion to NIH and $750 million to CDC. Presumably, both of those agencies will be restored if there is (as expected) a Congressional agreement to substantially increase the spending ceiling for NDD program.

FDA is proposed for an increase of $362 million above the FY 19 Continuing Resolution level (the base used in the President’s Request), which is nearly $260 million above the FY 19 final enacted spending level. The Alliance for a Stronger FDA commented:

we are quite pleased with the proposed increase in appropriated funding for FDA. We thank the Administration for its continuing strong support of FDA. The agency will be able to apply new monies to important programs that benefit the American people, as well as hire needed scientific personnel to carry out the FDA’s far-ranging mission.

The Alliance is looking forward to publication of the Congressional Justification (CJ) for FDA during the week of March 18. It will contain the numbers needed to do accurate analysis and is essential to establishing the Alliance’s FY 20 “ask.” This week’s Analysis and Commentary provides somewhat more details while we wait for the CJ. It also lays out some of the barriers to a smooth path for FY 20 appropriations.

House Appropriations Committee Sets April 5 Deadline for Public Witness Testimony for the Record. Every year, there is an opportunity for public (non-governmental) organizations to submit testimony for the Appropriations Committee record. This year, the Ag/FDA subcommittee has set Friday, April 5 as the final day to submit testimony. The key documents are Instructions for Public Witness Testimony and Public Witness Truth in Testimony Form. We encourage Alliance member organizations to submit Statements for the Record. If you need additional information or assistance, contact Roger Szemraj.

Dr. Ned Sharpless, NCI Director, Appointed Acting FDA Commissioner. With Dr. Gottlieb set to leave FDA in early April, Secretary Azar has named Dr. Ned Sharpless, the director of the National Cancer Institute, to be the Acting Commissioner until a new commissioner is nominated and confirmed. NCI is known to work more closely with FDA than many of the other NIH institutes. The Alliance has commented:

Dr. Sharpless brings a varied background in academia and government and is also an inventor and innovator with industry experience. All of this makes him an exceptional choice for acting FDA Commissioner and we look forward to working with him to continue to build and strengthen the agency.

House Plans to Complete All Appropriations Bills Before July. House Majority Leader Steny Hoyer (D-MD) told the House Budget Committee that he has “reserved all of June to pass every appropriations bill by June 30.” He recognized that this probably depended on a Congressional deal to raise the spending ceilings set by the Budget Control Act of 2011. To accomplish this, he called upon House and Senate Budget committee members to work together to resolve this early and not leave it for a difficult end-game.  While it would be a great surprise if all of the appropriations bills were completed before July, his statement represented a symbolic call for bipartisan budget and appropriations work that would assure that FY 20 will not become a repeat of FY 19 deadlocks and the longest shutdown ever of the Federal government. Hoyer’s testimony is here. This week’s Analysis and Commentary looks at several barriers to a smooth FY 20 appropriations process, notwithstanding Representative Hoyer’s efforts to move the process along.

Sharpless Appointed Acting Commissioner of FDA

March 12, 2019

In response to media inquiries, the Alliance for a Stronger FDA issued the following statement earlier today:

The Alliance for a Stronger FDA thanks Dr. Gottlieb for his strong leadership at FDA and welcomes Dr. Norman Sharpless, Director of the National Cancer Institute, as the “acting” commissioner. He will serve until a Commissioner is nominated and confirmed.

Dr. Sharpless brings a varied background in academia and government and is also an inventor and innovator with industry experience. All of this makes him an exceptional choice for acting FDA Commissioner and we look forward to working with him to continue to build and strengthen the agency.

said Ladd Wiley, Executive Director of the Alliance for a Stronger FDA.

We also applaud Secretary Azar for moving so promptly and bringing such an excellent and talented individual to the task of running FDA.

The Alliance for a Stronger FDA is a multi-stakeholder advocacy group that unites more than 150 patient and consumer groups, biomedical research advocates, health professions societies, individuals and industry to work to increase FDA’s budget authority appropriations. More information about the Alliance can be found at www.StrengthenFDA.org or by contacting Steven Grossman.

Alliance Issues Initial Statement

March 11, 2019

In response to inquiries, the Alliance for a Stronger FDA released the following statement in response to the President’s proposed budget for FY 20: … READ MORE …

FY 20 President’s Budget Request; Spin and Reality

March 8, 2019

White House acting chief of staff Mick Mulvaney has said that the starting point for non-defense funding is the budget cap required under the Budget Control Act of 2011, which is about $55 billion below FY 19 funding levels. Beyond that, he has said that federal agencies were directed to produce budgets that assume another 5 percent cut.

So, whatever is in store for FDA in the President’s Budget Request, the overall climate for health programs is likely to be bleak. We are still hopeful for FDA because the Administration’s request last year (FY 19) so clearly recognized both needs and opportunities that required increased FDA funding.

It is guaranteed that OMB will make the FDA request sound much better than it really is. For example, in some recent years, the President has asked for food user fees that would replace BA dollars. Typically, a billion dollars for food safety (all BA dollars) might become a request for $800 million in BA and $250 million in proposed (and unrealistic) food user fees. OMB would say its proposal is a $50 million increase … while we would say that it has the effect of a $200 million cut because the Appropriations committees will need to find at least that much in additional BA dollars before the program would reach the prior year’s level.

This is not a partisan thing on OMB’s part. Regardless of who is in the White House, OMB tries every year to place the President’s request in the best light.

The OMB “headline” numbers will be widely circulated in the media, even though they do not provide an accurate or meaningful picture of the actual proposal being made by the President. The important numbers are in the budget tables,* not in the OMB summaries.

Here are some things to consider before believing or repeating the headline numbers:

  1. Proposed user fees are counted as actual funding, even though they are unlikely to become law or turn into dollars that the agency can spend.
  2. Annual increases built into the user fee agreements are treated as new dollars proposed by the President.
  3. Adding BA appropriations and user fees together provides an inaccurate picture of the President’s budget request. User fee monies are collected for very specific purposes and, while very valuable to the agency, cannot be used to pay for a wide variety of programs or fund new priorities and evolving needs.
  4. More than $700 million of the user fees are for the tobacco center and not available for FDA’s traditional responsibilities for safe foods and safe and effective medical products. (For a better understanding, go to the second question here. For a more in-depth analysis of how tobacco fees distort the FDA’s budget, go here.)

Further, ignore those who say you don’t have to pay attention because the President’s budget is dead on arrival, pointing to the likelihood that at least $50 billion will be added to the proposed non-defense spending. The reality: whether Congress accepts or rejects the President’s proposals or adds more money, his numbers will be used as a baseline when the subcommittees mark-up. That matters.

As soon as we have a firm grasp on what the President is actually proposing, we will be back to the Alliance membership with details that you can rely upon.

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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* For those inclined to DIY: once text of the President’s request and supporting justification become available, I immediately search for the All-Purpose Table and the Summary of Changes, then start comparing them to the Budget Authority Crosswalk and Budget Authority by Activity.