UPDATED: Obama FY2013 Budget Proposal Unveiled, FDA Gets Small Funding Boost

Posted 13 February 2012 | By Alexander Gaffney, RAC 

The Obama Administration released its FY2013 budget on 13 February, marking the traditional starting point in the Congressional negotiations over fiscal priorities and funding levels for various agencies, including the US Food and Drug Administration and the Department of Health and Human Services (DHHS).

FDA Funding

The budget includes $11 million in newly appropriated spending to help FDA implement the Food Safety and Modernization Act of 2011(FSMA) and $643 million in new user fee funds-a total of $654 million in new funding for the agency.

Under the FY2013 budget, FDA will receive approximately $4.486 billion, with $2.517 billion in funding coming via the appropriations process. Approximately $1.969 billion in FDA funding will come from user fee acts, including the Prescription Drug User Fee Act,Medical Device User Fee Act, Generic Drug User Fee Act and Biosimilar and Interchangeable Products User Fee Act. All of these acts are currently seeking Congressional approval.

Regulatory Science, Medical Countermeasures and Other Programs

Regulatory science will also see increased funding under the proposed budget, if enacted.

The budget says that the Administration is looking to "[invest] in FDA's efforts to advance regulatory science and support the review of new medical countermeasures for chemical, radiological, biomedical and nuclear threats."

Related to this effort to advance medical countermeasures are a $547 million fund to "enhance the advanced development of next generation medical countermeasures" and $50 million to establish a venture capital entity in the Office of the Assistant Secretary for Preparedness and Response known as the "Strategic Investor". Both of these programs fall under DHHS.

FDA will also see continued funding for its Medical Countermeasures Regulatory Science Initiatives.

The President's proposed FY2013 budget also affects some key healthcare programs. The budget proposes cutting $364 billion out of the budget over the next decade by "implementing payment innovations and other reforms that encourage high-quality and efficient care."

The budget also proposes leaving the National Institutes of Health's funding at a consistent $31 billion, but pushes for a reformed grant management policy to "increase the number of new research grants awarded." The budget specifically mentions the newly-formed National Center for Advancing Translational Sciences (NCATS) as an area that will receive funding under the FY2013 budget.

Regulatory Strategy

The "Administration is firmly committed to a regulatory strategy that promotes continued economic growth and job creation, while protecting the safety and health of all Americans," says a section of the budget entitled "pursuing sensible regulation."

"Smart, cost-effective regulations, crafted with input from stakeholders inside and outside of Government, can save lives and prevent harm while promoting growth and innovation," continues the section. "As the economy continues to recover and create new jobs, it is particularly critical for the Nation's regulatory strategy to enable American businesses to grow and innovate."

Obama-and his budget-both highlight the Administration's attempt to pursue what Obama refers to as a "pragmatic" approach to regulation.  The budget notes that "the Administration uses objective data to assess the impact of rules and to assess alternatives."

A statement written by President Obama accompanying the budget called attention to the Administration's "balanced approach to regulation that is pragmatic, driven by data, and that will protect the health and well-being of the American people and help lay the groundwork for economic growth and job creation."

While the budget is unlikely to pass in its current form-especially given the current political climate in Washington-the document could provide key insights in to the Administration's regulatory aspirations, notes former Senate Republican health staffer Alec Vachon, PhD.

"Any proposed regulatory changes are of potentially more market interest than legislative changes because the Obama administration can execute [those changes] without Congress," said Vachon.

Budget in Brief

  • FY2013 budget documents are available at the Office of Management and Budget's website.
  • DHHS will post a detailed breakdown of the budget on their website on 13 February. Previous year's budgets are also available on the website.
  • FDA will host a conference call for interested stakeholders on the FY2013 budget on 13 February at 3:30 PM EST. FDA staff, including Assistant Commissioner for Budget Patrick McGarey and Assistant Commissioner for External Relations Lawrence Bachorik, will provide a brief on the President's budget request. Stakeholders wishing to participate should call in at 888-324-8195 (US) or 1-312-470-7231 (International), and use the passcode "FDA". A replay of the briefing will be available one hour after the event ends until February 28, 2012. To hear the replay callers in the United States and Canada can dial 866-431-7856. International callers can dial 203-369-0972.

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