Loom­ing bud­get cuts could un­der­mine user-fee deals, cost jobs

Bud­get cuts could stymie user-fee deals, cost jobs

Modern Healthcare - - NEWS - Jaimy Lee

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Drug and de­vice mak­ers fear the White House’s bud­get-cut­ting plans will un­der­mine leg­is­la­tion in­tended to im­prove the re­views of new prod­ucts.

The Of­fice of Man­age­ment and Bud­get re­leased a re­port Sept. 14 de­tail­ing the im­ple­men­ta­tion of se­quester cuts to fed­eral agen­cies nec­es­sary to carry out the Bud­get Con­trol Act.

User-fee pro­grams, re­quired to be reau­tho­rized ev­ery five years, are part of the se­quester cuts. The Food and Drug Ad­min­is­tra­tion col­lects user fees in ex­change for agree­ing to meet per­for­mance goals.

The Obama ad­min­is­tra­tion ex­pects to cut 8.2%, or $318 mil­lion, from the agency’s $3.87 bil­lion bud­get in salaries and ex­penses, “which will have a dev­as­tat­ing im­pact on the FDA,” ac­cord­ing to state­ments re­leased by the Al­liance for a Stronger FDA, which ad­vo­cates for FDA re­sources.

The cuts will likely come in the form of lay­offs of FDA staff mem­bers and re­duc­tions in grants, con­tracts and ser­vices, said Steven Gross­man, deputy ex­ec­u­tive di­rec­tor of the al­liance. If the FDA chooses to make the $318 mil­lion in cuts in lay­offs, the FDA would lose about 1,000 jobs, he added. “It’s a big loss,” Gross­man said. A spokes­woman for the FDA de­clined to com­ment.

Ear­lier this year, law­mak­ers reau­tho­rized user-fee agree­ments with the drug and de­vice

in­dus­tries and au­tho­rized new user-fee pro­grams for the generic drug and biosim­i­lars in­dus­tries. Pres­i­dent Barack Obama signed the leg­is­la­tion into law in July.

In com­ments made last week at the Na­tional Press Club, John Castel­lani, pres­i­dent and CEO of the Phar­ma­ceu­ti­cal Re­search and Man­u­fac­tur­ers of Amer­ica, ques­tioned what will hap­pen to the user fees paid by the drug in­dus­try and counted in the FDA bud­get that the White House con­sid­ers sub­ject to the spend­ing re­duc­tion.

“Does it go into an ac­count that goes to deficit re­duc­tion? Does it go into a hold­ing ac­count that goes back to FDA when, hope­fully, Congress can come to an agree­ment with the pres­i­dent that puts us on a sound fis­cal path and meets the re­quire­ments of the Bud­get Con­trol Act? We just don’t know,” he said. “Our fear is the FDA will lose the re­sources in the short term and not gain them back in the long term.”

In a state­ment re­leased in ad­vance of the OMB re­port, the Ad­vanced Med­i­cal Tech­nol­ogy As­so­ci­a­tion had urged law­mak­ers to en­sure that user-fee fund­ing was used for the de­vice re­view process.

“The use of the se­quester author­ity to re­duce user-fee funds in­tended for FDA would be dev­as­tat­ing to pa­tients, the FDA and med­i­cal tech­nol­ogy com­pa­nies,” Ad­vaMed said.

Castel­lani said PhRMA fears the FDA will lose the user fees paid by the drug in­dus­try.

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