FDA Gets More Funding, IPAB Gets Less

After two years in budget limbo, Congress finally enacted federal spending legislation for fiscal year 2014 last week, just before the latest funding extension ran out. In this period of ever-tighter government outlays, the Food and Drug Administration did fairly well in gaining additional funds, along with user fee revenues that had been put on hold. IPAB, on the other hand, got a $10 million budgetary haircut.

The legislation appropriates $2.552 billion to FDA, an increase of $217 million over actual 2013 funding levels, which were reduced by last year’s budget sequester. Total funding for FDA, including user fees, is $4.4 billion for the current year. In addition, the legislation restores $80 million to the agency, that portion of user fees set aside under sequestration.

The actual appropriations bill is brief and largely authorizes collection of numerous user fees:  $760 million in prescription drug fees, $306 million for generic drugs, $115 million for medical devices, and $20 million for biosimilars. The latter is important because up until now, the agency did not have access to that portion of fees due up front from sponsors to support the extensive advisory activities involved in helping manufacturers navigate the complex biosimilar development and application process.

Under the new budget, the Center for Drug Evaluation and Research will receive nearly $1.3 billion for its operations and for field force activities related to drugs. The Center for Biologics Evaluation and Research gets $338 million. Some of the agency’s added funds will support FDA consolidation at its White Oak campus and help maintain current buildings and facilities.

The Centers for Disease Controls and Prevention (CDC) similarly benefits from a budget increase of about 8 percent. CDC gains added funds to support biodefense programs that combat infectious disease and build national stockpiles of critical medicines.

But the National Institutes of Health (NIH) continues to suffer on the funding front. Congress set the NIH budget at nearly $30 billion, an increase of about $1 billion over its previous level. But the new amount is below the agency’s peak 2010 funding level that exceeded $31 billion. The Senate summary notes that added funding will support NIH’s new BRAIN initiative and research related to Alzheimer’s disease. But with inflation, NIH will be hard-pressed to fund much new research, let alone continue many of the discovery programs underway.

Under pressure to stop the funding logjam, Republicans stepped back from using the budget bill to take major whacks at Obamacare. The legislators pulled $1 billion from a new prevention fund established by the Affordable Care Act to support various health programs, and they cut funding by $10 million to the much criticized industry bogeyman known as the Independent Payment Advisory Board (IPAB), which may never become operational. The legislation also retains provisions that ban federal funding of abortions and of creating embryos for research purposes.

The higher budget level for FDA puts the agency in a good position to negotiate the appropriations process for fiscal year 2015, notes the Alliance for a Stronger FDA, which has led the fight to bolster FDA’s resources so it can meet its ever-growing mandates and assignments. The late action on the 2014 budget, though, may delay the administration’s 2015 budget roll-out for a month or so.