This Week at FDA: Proposed HHS budget would slash funding, drugmakers worried about FDA staff cuts

Welcome to another installment of This Week at FDA, your weekly source for updates – big and small – on FDA, drug, and medical device regulation, and what we’re reading from around the web. This week, a leaked HHS budget document proposes cutting about a third of the department's funding, drug manufacturers voiced concerns about how the recent mass firings will affect their drug development, and the FDA postponed a pediatric therapeutics meeting without explanation.

The Washington Post reported that it had obtained a leaked draft of the Department of Health and Human Services (HHS) fiscal year 2026 budget from the Office of Budget and Management (OMB) that proposes cutting the department's discretionary spending by a third from $121 billion in FY24 to $80 billion. The administration is also proposing a personnel shuffle and restructuring of its subagencies.

Jeremy Faust, author of the blog Inside Medicine, noted that as part of the proposed reorganization, HHS would lose the Administration for Strategic Preparedness and Response (ASPR), which is responsible for helping the department respond to public health emergencies and disasters. Eliminating the subagency could also mean eliminating the HHS assistant secretary who runs the agency, a position that requires Senate confirmation.

Steven Grossman, an FDA regulatory consultant and author of the FDA Matters blog, compared the budget to that of FDA's FY23 budget authority funding, noting that the agency would see a 17% cut under the proposal. He also noted that an FY25 recession package is anticipated in the next few weeks that could reduce FY25 funding and could make the proposed FY26 reduction look even smaller.

In FDA staffing news, Grace Graham was named deputy commissioner for policy, legislation, and international affairs. Before stepping into the new role, she was chief health counsel at the House Energy and Commerce (E&C) Committee, where she worked on issues such as user fee legislation.

CBS News reported that FDA is finalizing plans to hire contractors to replace some staff fired in the past few months. According to sources, the contractors would be brought in to replace 50 recently laid-off workers responsible for travel logistics and overseeing agency spending.

Politico reported that FDA has asked some people who were recently laid off at the Center for Tobacco Products and were responsible for penalizing retailers who sell tobacco products to minors to temporarily return to the agency. They were fired as part of the Trump administration's reduction-in-force (RIF) initiatives, which have incapacitated the agency's ability to prosecute illegal tobacco sales, Politico noted.

The National Treasury Employees Union, representing FDA workers, announced that it has held a briefing with HHS regarding the recent RIF actions. While the union continues negotiating with the department and filing legal challenges, it noted that it has not yet received a list of bargaining unit employees impacted by the RIF. Employees continue to face challenges reaching the human resources staff for further guidance.

FDA announced a new policy to limit the participation of industry representatives on advisory committees.

“Industry employees are welcome to attend FDA advisory committee meetings, along with the rest of the American public, but having industry employees serve as official members of FDA advisory committee members represents a cozy relationship that is concerning to many Americans,” said FDA Commissioner Martin Makary. “In fact, the FDA has a history of being influenced unduly by corporate interests.”

While industry representatives will not be able to sit on advisory committees in an official capacity, they will still be able to attend and present at meetings. In rare circumstances, especially when there is limited scientific expertise, the agency may make exceptions.

“This is insulting to FDA employees,” said a current senior FDA official who spoke to Focus and was granted anonymity due to fear of professional reprisals. “Industry can't be voting members on advisory committees and they RIFed the staff that vet conflicts of interest.”

Drugs & Biologics

Despite reviewers being shielded from recent mass firings at FDA, some drug manufacturers are delaying their clinical trials and drug testing, according to the Wall Street Journal. Sources say significant delays in certain core functions, including approving clinical trial amendments and providing drug development feedback, have slowed the agency's regulatory work.

Reuters also reported that the RIFs have raised concerns in the biotech industry that their products will have a harder time getting approved. Sources say the concern is greatest for small- and mid-sized companies that are undergoing clinical trials of their product but have no revenue-generating product on the market yet.

Fierce Pharma reported that Peter Marks, former director of the Center for Biologics Evaluation and Research (CBER), is warning that the recent layoffs could jeopardize drug reviews beginning in 2026 or 2027. Marks made the comments in a recent call with analysts at BMO Capital Markets, and while BMO never identified the former CBER director directly, Fierce said the description matches Marks.

FDA announced that CBER's Office of Pediatric Therapeutics will delay its 15 May meeting on implementing the Best Pharmaceuticals for Children Act and Pediatric Research Equity Act for several months. The agency didn't explain the delay but said that it wanted to "make sure we can fully focus on the event to make it the best that it can be."

FDA issued a consumer alert warning against using counterfeit versions of Novo Nordisk's popular diabetes and weight management drug Ozempic (semaglutide). The agency said the company notified it that hundreds of units of the fake drug were circulating in the US supply chain, which authorities seized.

Medtech

Precision Neuroscience announced that its Layer 7 Cortical Interface, a high-resolution cortical electrode array used to record, monitor, and stimulate electrical activity on the brain's surface, has received 510(k) clearance from FDA. The company is a major competitor to Elon Musk's Neuralink, and it said the FDA's decision was the first time full regulatory clearance was granted for a next-generation wireless brain–computer interface (BCI) device.

This Week at FDA: Proposed HHS budget would slash funding, drugmakers worried about FDA staff cuts

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