Recently, the Senate Committee on Appropriations, Subcommittee on Agriculture, Rural Development, Food and Drug Administration (FDA), and Related Agencies, held a hearing on the Fiscal Year 2012 budget for the FDA.
Prior to the hearing, the Committee noted in a press release that under the Continuing Resolution, the Agriculture Subcommittee reduces the budgets of the USDA and the FDA by $1.1 billion (5%) below the President’s FY 11 budget request. In comparison, HR 1 reduces the budgets of the USDA and FDA by $4.8 billion (22%) below the President’s FY 11 budget request. Specific amounts are provided below:
- FY 11 President’s Budget: $22.851 billion
- Senate CR: $21.700 billion
- HR 1 (House CR): $18.008 billion
The Senate CR provides $2.504 billion for the FDA, which is the same as the President’s request but $400 million (16%) above HR 1. However, HR 1cuts the FDA budget “far more drastically than the Senate proposal, and would result in large-scale reductions of important food and drug inspections, and could result in furloughs of inspectors.”
Consequently, the Subcommittee then heard testimony from Dr. Margaret Hamburg, Commissioner of the FDA, regarding the 2012 budget request. She used her testimony to outline the important initiatives in FDA’s FY 2012 budget request to Congress. Dr. Hamburg also highlighted FDA’s unique role in protecting public health and the value that FDA delivers for American taxpayers.
FDA Commissioner Dr. Hamburg’s Testimony
At the beginning of her testimony, Dr. Hamburg asserted that she and her “colleagues at the FDA are deeply committed to the health of American patients and consumers – and they recognize that innovation is essential to progress in public health.”
She noted that, “innovation is the foundation of the successful industries FDA regulates, and innovation is responsible for remarkable advances across all of the product areas within FDA’s jurisdiction – which is why FDA must work proactively to foster the scientific innovation that will lead to tomorrow’s breakthrough products.” Dr. Hamburg also recognized that “innovation is critical to maintaining U.S. global leadership in many areas, including medical product development.” However, she noted FDA’s support for the generic drug industry, which markets drugs that save American patients and taxpayers $140 billion per year.
Accordingly, she noted the importance of FDA as an agency innovating and becoming more efficient. She noted that in FDA highlighted in its FY 2012 budget more than 100 examples in which FDA centers and offices are improving the efficiency of FDA programs, and, in many of these examples, FDA is also supporting industry efforts to develop new products.
Examples of FDA innovation include the recent launch of the Innovation Pathway, a program to stimulate new, breakthrough technology and advances for medical device manufacturers as well as a scientific collaboration with industry to develop novel technologies. Dr. Hamburg asserted that, “these efforts reduce the risk and expense of recalling products that fail to meet safety standards.”
She also noted FDA-TRACK, an agency-wide system to monitor key performance measures for more than 90 FDA programs. Dr. Hamburg asserted that FDA-TRACK has helped FDA achieve its performance measures and allowed stakeholders and the public to witness FDA’s progress through quarterly reports posted on FDA.gov. Additionally, Dr. Hamburg listed a number of ways FDA has improved the health of Americans in the past year, including:
- Approved new drugs to treat diabetes, hypertension, osteoporosis, bacterial infections, chronic pain, rheumatoid arthritis, preterm birth, gout, immune deficiencies, schizophrenia, major depressive disorder and pulmonary disease
- Approved five new therapies to treat rare diseases
- Conducted four workshops to stimulate new orphan drug development
Consequently, Dr. Hamburg told the committee that FDA’s FY 2012 budget is an investment in health – in the health of individuals and the public health of our nation. As a result, the budget includes $4.4 billion in budget authority and user fees to protect and promote the health of the American public every day, and through every stage of life.
She noted that, “although FDA’s FY 2012 budget is an overall increase for FDA, it also contains savings that contribute to the Administration’s deficit reduction goals. FDA is proposing $29.7 million in contract and administrative savings designed to achieve reductions and cut costs across all FDA program areas.”
To achieve these savings, Dr. Hamburg noted that, “FDA will reduce administrative staff by 46 FTE, lower contract costs by increasing competition, and expand the use of blanket purchase agreements and other agency-wide approaches to reduce contract costs.” She also noted reducing costs by using technology to improve how FDA manages its contracts and the contracting process and by using online training to reduce the cost of employee training.
FDA FY 2012 Budget
For FY 2012, FDA proposed $70 million for the Advancing Medical Countermeasures (MCM) Initiative. Medical countermeasures include drugs, vaccines, diagnostic tests, and medical equipment and supplies to respond to deliberate biological, chemical, radiological and nuclear (CBRN) threats and emerging infectious diseases, such as pandemic influenza. Dr. Hamburg noted that FDA is “critical to the success of the MCM Enterprise, primarily because FDA evaluation of product safety and efficacy can significantly affect the course of product development." The report further recognized that robust FDA engagement from the earliest stages of product development can substantially increase the odds of successful approval. In other words, increased support for FDA’s MCM activities is one of the most critical steps the federal government could take to transform the larger MCM Enterprise.
FDA also proposed an increase of $123.6 million for the Protecting Patients Initiative. This increase includes $64.8 million in budget authority and $58.8 million from three new user fees. FDA is proposing new fees for reviewing generic drug applications, paying the cost of medical product reinspections, and inspecting imports that arrive by international courier.
Dr. Hamburg also noted that with the FY 2012 increase in budget authority, FDA will establish a pathway for approving generic biologics, which are biological drugs shown to be highly similar to an FDA-approved biological product. She noted that,
“approving biosimilar versions of these products offers the potential for substantial savings for the federal government and private sector health plans. However, these savings will not materialize unless FDA has the resources to implement a clear regulatory pathway for approving generic biologics.
The Protecting Patients Initiative will also invest in new scientific tools and partnerships to enhance the safety of increasingly complex drugs, medical devices, vaccines and other biological products. For example, the Protecting Patients Initiative will strengthen FDA efforts to modernize and improve safety throughout the supply chain of medical products at a time when the number of medical products manufactured abroad is increasing dramatically, which presents real challenges for medical product and manufacturing safety. The initiative will also expand FDA’s capacity to conduct medical product safety assessments and strengthen the safety of vaccines and the blood supply.
For FY 2012, FDA also proposed an increase of $48.7 million for the FDA Regulatory Science and Facilities Initiative, to strengthen the core regulatory scientific capacity that supports all elements of the FDA mission. Regulatory science focuses on developing the knowledge and tools to properly assess the safety, effectiveness and quality of products that are being developed or are already on the market. Specifically, this initiative will help modernize and streamline the regulatory pathways that industry relies on to bring new, innovative products to market.
It will also modernize the FDA review and approval process for products that rely on new and emerging technologies. The result will be promising new opportunities to diagnose, treat, cure and prevent disease. Dr. Hamburg also noted how the budget will allow FDA to finish the new laboratory for CBER-CDER. She noted that FDA must make this investment in FY 2012 to ensure that the laboratory is operational and ready for occupancy in FY 2014.
Finally, FDA proposed an increase of $634.5 million for 12 current law user fee programs. FDA user fee programs support safety and effectiveness reviews of human and animal drugs, biological products, medical devices, and other FDA-regulated products. Fees also allow FDA programs to achieve timely and enhanced premarket review performance. Finally, fees support the programs and operations of the FDA Center for Tobacco Products.
Existing user fee laws authorize fee increases for many FDA user fee programs. The increases expand the available options for treating and curing diseases and addressing other important public health needs.
As Dr. Hamburg noted, the FDA budget for FY 2012 contains important investments for critical public health priorities and it will help support the development of urgently needed medical countermeasures; protect patients by assuring that the drugs and other medical products they rely on are safe; and advance regulatory science, which serves as the foundation for all science-based decisions at FDA.”
Funding for FDA is crucial, especially with respect to new drug, device, and medical technology approval. Industry is developing medicines and devices at a fast rate, requiring FDA to provide constant feedback and testing. To ensure that the medical device and pharmaceutical industry remain strong in America, at a time when health care reform is being implemented, Congress must ensure the agency is adequately supported and funded.