FDA Field Operations Would Endure Reductions Under Budget

President Obama’s FY 2016 blueprint includes cuts to ‘low-priority’ enforcement, surveillance and other activities in FDA human drugs and biologics programs, but still increases those operations overall.

Field operations in FDA’s human drugs program would bear the brunt of the reductions included in the agency’s fiscal year 2016 budget request.

The proposed cuts were described as part of an effort to focus on the most important compliance and other activities, even as FDA continues its work to improve oversight of the global supply chain and implements new related policies.

The agency wrote in its fiscal year 2016 budget request justification documents that it would reduce spending related to current medical product safety activities $10.1 million “in order to support the highest priorities for FY 2016.”

Reductions would focus on “lower priority enforcement, surveillance, research, outreach, and risk analysis activities” in the human drugs, biologics, device and animal drugs programs, and Office of Regulatory Affairs. FDA declined to elaborate on what the changes might entail.

President Obama proposed a $4.9 billion FY 2016 budget for the agency that would increase budget authority more than 6% and user fees about 1% compared to his FY 2015 request. While not considered realistic by many members of Congress, the proposal may help the agency’s user fee negotiations, which are set to begin later this year (Also see "User Fees Would Recede In Significance Under President’s Budget" - Pink Sheet, 2 Feb, 2015.).

Medical product safety reductions in the FY 2016 request constituted the bulk of the net $14.4 million in cuts and program changes FDA included in the budget request (see table below).

Prioritization is not new at FDA, particularly for field activities, but cutting funds for items considered a low priority in those areas may be a surprise.

The agency requested and received the ability to conduct facility inspections based on risk in the 2012 FDA Safety and Innovation Act (Also see "FDA User Fee Bill Up For Final Senate Action After House Passage" - Pink Sheet, 20 Jun, 2012.).

It was part of FDA’s strategy to respond to globalization, where the agency looked to spread the inspection burden among several trusted regulators and share information (Also see "FDA Envisions Many Regulatory Coalitions Dealing With Globalization Issues" - Pink Sheet, 26 Sep, 2011.).

FDA intends to collect specific quality measurements for facilities it regulates in order to help determine where inspectors should direct their efforts (Also see "FDA Could Release GMP Data To Prod Manufacturing Improvements" - Pink Sheet, 15 Jul, 2013.).

Drugs, Biologics Programs Still See Boost

Overall, the human drugs program would receive about $1.37 billion in the FY 2016 request, an increase of about $33 million from the FY 2015 enacted budget. The biologics program budget would be set at $350.46 million in FY 2016, an increase of about $6.2 million from the FY 2015 enacted level (see charts).

Human Drugs Program Funding

Presidential budget requests typically do not match the levels enacted by Congress, but in recent years FDA has seen the differences narrow.

Source: FDA budget documents

Biologics Program Funding

Source: FDA budget documents

The agency listed about $8.56 million in line-item reductions in its budget authority request for medical product safety activities.

Human drugs field activities would see more than $4 million in budget authority reductions, the most of any program in the medical product safety line item. Biologics would lose $1.63 million, but most of that cut, more than $1.2 million, would come out of center, rather than field activities.

The devices program also would see a $2.89 million reduction, most of it from center activities.

However, none of the program requests would result in a net decrease in budget authority, or treasury, funding for medical product safety. The human drugs program would still see a net $2.4 million budget authority increase, biologics a $3.6 million increase, and devices a $6.9 million increase, according to the budget document.

Increases for medical product safety were requested for the human drugs program for additional efforts to fight antimicrobial resistance and enhance compounding oversight. Both issues have gained prominence recently in part thanks to new legislation (Also see "Pharma’s Cures: Breaking Down The House’s Biomedical Reform Bill" - Pink Sheet, 2 Feb, 2015.) and (Also see "FDA Bulk Compounding Substance Review: Task For Advisory Committee – Or Sisyphus?" - Pink Sheet, 23 Jan, 2015.).

The agency requested increases for the biologics program related to implementation of the 2012 FDA Safety and Innovation Act as well as the antimicrobial resistance effort.

FDA also wants a more than $7 million increase for the device program to fund its portion of Obama’s Precision Medicine Initiative, which is expected to focus on standards for next-generation sequencing technology (Also see "Obama Precision Medicine Initiative Gets Under Way With February NIH Research Workshop" - Pink Sheet, 30 Jan, 2015.).

Outreach, Training, Low-Priority Enforcement To Be Reduced

Agency officials were not very specific in the budget request about the types of reductions that were planned, although they did narrow the focus somewhat.

The human drugs program reductions were made “to targeted, lower priority enforcement activities,” while “lower priority compliance, inspection, outreach and training activities” would be cut in the biologics program, according to the budget document.

ORA also outlined similar reductions to enforcement, compliance, inspection and training activities.

In the FY 2016 request, spending on field activities in the human drugs program would decrease about $1.67 million overall from the FY 2015 enacted level. The entire cut would come from budget authority. User fee revenue for the program is requested to increase by about $2.4 million.

That would appear to reverse the trend seen in the overall FDA budget request, where user fees decreased in terms of their slice of the FDA funding pie. Industry and others have been concerned that the agency is becoming too dependent on fee revenue (Also see "FDA’s Budget Proposal: It’s The User Fees’ Agency Now" - Pink Sheet, 15 Apr, 2013.).

FDA also requested more priority review voucher user fee revenue, indicating that it expected several vouchers may be redeemed in FY 2016 (Also see "Priority Review Vouchers Could Be Used Frequently Next Year" - Pink Sheet, 3 Feb, 2015.).

Field activities in the biologics program would decrease more than $2 million from the FY 2015 enacted level, although the cut is from user fee revenue. Budget authority would increase in that line item.

Field activities may not require as much spending because FDA’s technological abilities are improving enough to better target inspections and enforcement.

The agency is designing a new database system that will connect all information at the agency on each facility, such as inspection results, quality metrics, ownership and products manufactured, to streamline the inspection system (Also see "FDA GMP “Surveillance” Will Link Quality, Compliance Information To Inspections" - Pink Sheet, 25 Nov, 2013.).

An FDA realignment also under way is intended to make ORA staff more specialized and more closely linked to the centers they serve (Also see "FDA’s Plaisier: GMP Oversight Must Shift To Outcomes Model" - Pink Sheet, 4 Aug, 2014.).

FY 2016 Budget Request Reductions and Program Changes
Program	Amount
Human Drugs	-$4.04 million
Biologics	-$1.63 million
Animal Drugs and Feeds	-$3 million
Devices and Radiological Health	-$2.89 million
National Center for Toxicological Research	-$4.33 million
FDA Headquarters	$1.5 million
Net Total Reductions and Changes	-$14.39 million
Note: Of the total net reduction, about $9.1 million would be non-field activities and $5.3 million would be field activities. Source: FDA congressional justification of FY 2016 presidential budget request