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Regulatory Focus™ > News Articles > As House Prepares to Appropriate FDA Funding, Sequestration Process Looms Large

As House Prepares to Appropriate FDA Funding, Sequestration Process Looms Large

Posted 06 June 2012 | By Alexander Gaffney, RAC

On Wednesday, 6 June the US House of Representatives will begin to markup a piece of proposed legislation which would fund the US Food and Drug Administration (FDA) below levels proposed in a similar bill being considered by the US Senate.

The as-yet-unnumbered House bill, which would fund FDA and agriculture agencies, calls for $3.84 billion in funding, with $712.8 million of that to come from prescription drug user fees, $69.7 million to come from medical device user fees and $38 million to come from animal drug user fees. A further $500 million in appropriations would be from tobacco user fees.

The proposed non-user fee congressional appropriation of $2.48 billion is $44 million less than the Senate's S.2375, which would fund the agency with $2.52 billion. Neither bill, however, takes into account the potential user fee increases possible under both the Houses' FDA Reform Act or the Senate's FDA Safety and Innovation Act.

The bill also does not take into account the potential effects of the sequestration process, which would force the congress to cut agency appropriations by a minimum of 7.8% in fiscal year 2013. Those cuts are intended to stay in place through the end of the decade, increasing a projected 2.3% through 2021. Other estimates, reports Genetic Engineering & Biotechnology News, place the projected cuts even higher at 8.4%.

This would be highly problematic for an agency increasingly asked to do more with less, notes FDA Matters' Steven Grossman. "Assuming a very modest 6% annual increase in costs and responsibilities each year, FDA will need about $150 million more to meet its responsibility in FY2013. Additional 6% increases would be needed annually in succeeding years," Grossman explained.

The potential sequester cut would see FDA lose more than $200 million each year. This would take the agency below fiscal year 2010 levels, ignoring its increased responsibilities and globalization-led demand, Grossman added.

Draft House Appropriations Bill

The Pink Sheet Daily - FDA Spending Bill Goes To House Panel At Lower Level Than Senate (Subscription)

GEN - As Politicos Posture, Advocates Assess the Impact of Sequestration on Federal Agencies

FDA Matters - A Well-Funded FDA: Only if Congress Stands Behind its Own Words