Trump FY 2018 Budget Blueprint: Hike in FDA User Fees?

Posted 16 March 2017 By Zachary Brennan

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President Donald Trump’s administration released its budget blueprint for FY 2018 on Thursday, calling for a hike in user fees from industry to make up for cuts elsewhere at the US Food and Drug Administration (FDA).

While the blueprint offers little detail on what such cuts would actually mean for the agency and pharmaceutical, biotech and medical device industries, the plan says it would recalibrate FDA medical product user fees “to over $2 billion in 2018, approximately $1 billion over the 2017 annualized [continuing resolution] CR level.”

But FDA’s FY 2016 and FY 2017 user fee levels were both over $2 billion.

If the blueprint is referring to just prescription drug, generic drug, biosimilar, medical device, animal drug and animal generic drug user fees, then that $2 billion figure falls to about $1.4 billion, so presumably the administration is looking to re-negotiate the user fee programs, which expire in September, forcing companies to fork over an additional $600 million.

A White House spokesman referred Focus questions to the Department of Health and Human Services, which would lose $15.1 billion or 17.9% of its budget from the 2017 annualized CR level. HHS has yet to respond to a request for more details.

The blueprint also says that this increase in industry user fees, which decreased from 2016 to 2017, “replaces the need for new budget authority to cover pre-market review costs. To complement the increase in medical product user fees, the Budget includes a package of administrative actions designed to achieve regulatory efficiency and speed the development of safe and effective medical products. In a constrained budget environment, industries that benefit from FDA’s approval can and should pay for their share.”

The Alliance for a Stronger FDA said in a statement on the proposal: "The President’s proposed funding mechanism—cutting more than a third of the agency’s appropriation and offsetting it with an enormous increase in medical product industry user fees—is neither wise nor realistic. Not wise because FDA’s core responsibilities—safe and effective medical products and safe foods—need to be supported in large measure by the public, who is the primary beneficiary. Not realistic because the drug and device industries have recently completed user fee agreement negotiations with FDA, concurring upon an appropriate amount of industry fees to support agency improvements. User fees have always been intended to supplement the agency’s appropriation, never to replace it." 

The agency's actual budget for FY 2018, which will be set by Congress, does not have to adhere to the president’s plan.

Rep. Tom Cole (R-OK) told Focus in a statement: "Ultimately, Congress holds the power of the purse and is responsible for managing the appropriation of funds...We know that certain cuts will need to be made to non-defense discretionary funding to pay for increased defense spending, and while we will take the OMB [Office of Management and Budget] recommendations into consideration, it will ultimately be Congress that makes the decisions about what will get cut and what will be increased."

Sen. Roy Blunt (R-MO) told Focus in a statement: "The president’s budget is the first step in the appropriations process. There are many concerns with non-defense discretionary cuts. Over the next several weeks, we’ll be holding hearings with cabinet secretaries and others involved to determine funding priorities for fiscal year 2018."

Sen. Lamar Alexander (R-TN) added: "The president has suggested a budget, but, under the Constitution, Congress passes appropriations bills."  

Nicole Longo, a PhRMA spokesperson, told Focus via email: "As we review the President’s budget proposal, we look forward to continuing to work with President Trump and Congress to improve American competitiveness and protect American jobs... The negotiated user fee agreements are an important step toward ensuring innovative medicines are delivered to patients in a timely and safe manner. We remain committed to ensuring that policies support innovation and value to deliver this new era of medicines to patients." 

NIH

The National Institutes of Health’s (NIH) spending would also see a dramatic cut of $5.8 billion, or about 20% of its more than $30 billion budget, bringing the agency back to funding levels from more than a decade ago.

The budget also seeks to eliminate the Fogarty International Center and its $70 million budget, as well as consolidate the Agency for Healthcare Research and Quality within NIH and make other consolidations and structural changes.

Experts are alarmed over the ripple effects that such budget cuts would have on biomedical and other research.

Ameet Sarpatwari, an instructor of medicine at Harvard Medical School, said: “A $6 billion cut to the NIH’s budget would be absolutely disastrous for scientific advancement.”

Harlan Krumholz, a Yale University cardiologist, also tweeted that it will be hard to fathom the ripple effects for biomedical science from a cut of this size to NIH’s budget.

A Budget Blueprint to Make America Great Again

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Categories: Biologics and biotechnology, Drugs, Medical Devices, Government affairs, Regulatory strategy, Regulatory intelligence, News, US, FDA, DOJ

Tags: Trump budget, FDA budget 2018, user fees, user fee reauthorization

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