FDA Funding for FY 11: Back to the Future

Not so long ago, FDA's appropriation barely budged from year-to-year. A good year was a 2% to 3% increase. This changed four years ago, after the formation of the Alliance for a Stronger FDA. The agency's case for more resources—always a good one—finally had an independent, multi-stakeholder voice. Champions on the Hill and in the Executive Branch emerged.

The agency appropriation has grown 50% in the last three fiscal years. So far, FY 11 looks more like the past than it does the last few years. FDA Matters believes that the consequences could be severe.

For the new fiscal year (FY 11) starting on October 1, Congress passed a Continuing Resolution (CR) that funds the government until December 3. As a result, the government is open, but no agency received new funding. For the next 2 months, government agencies (including FDA) will only be able to spend the amount they were appropriated in fiscal year 2010.

One of this year's Alliance themes has been the need for FDA to be an exception to the overall dismal federal budget situation. The agency must receive funding increases to do its job, which grows larger every day. There is strong support for this in Congress. The Alliance expects FDA to receive serious attention anytime Congress debates funding priorities.

This didn't happen for this first round of the CR for a fairly simple reason: Congress put this CR together without acknowledging any funding priorities. The Alliance believes FDA can win the debate to get increased funding, but only if that debate occurs.

When Congress returns in mid-November and looks at FY 11 funding again, there will be an opportunity to make the case that FDA should receive more funds. However, it is only a guess that this debate will occur before December 3. Congress may decide to pass the same CR to cover the period from December 3 to February 4.  If so, the pain of level funding will only become more intense for FDA.

Funding FDA at last year's levels is a particularly acute problem because over 80% of the agency's budget is people-related costs: salary, benefits, rent, IT, travel, support services. FDA cannot delay spending, as NIH might, by waiting a few extra months to disburse grant funds.

FDA management is reviewing contingency plans to preserve its priorities and maximize output. Retaining the fiscal 2010 spending levels will impact FDA's ability to hire medical product reviewers and food inspectors and personnel for other areas of growing need. The agency must use its CR funding to pay for October 1 raises and rent increases, which obviously are not reflected in the FY 10 appropriations level.

The overall situation, as well as these new costs, restricts FDA's ability to make commitments in hiring, new programming, better IT, and contracts. They will also not want to create obligations now that they may not be able to fund later in the year.

Congress will eventually be ready to address the nation's funding priorities, hopefully in November. Regardless of when this debate occurs, all of FDA's supporters will need to rise up as one to convince Congress that more monies are needed.

Steven

For purposes of disclosure: I am a founder and Deputy Executive Director of the Alliance for a Stronger FDA. It is the only multi-stakeholder group devoted to education and advocacy to increase the appropriated resources available to FDA. Members include patient and consumer groups, professional societies, research advocacy groups, associations, companies, consultants and individuals. For more information about the Alliance, go to www.StrengthenFDA.org or write to me at sgrossman@StrengthenFDA.org.

FDA's Yearly Appropriations Growth Since FY 2003

FY 03 (base year):         $1.390 billion

FY 04 ($11M increase):    $1.401 billion

FY 05 ($51M increase):    $1.452 billion

FY 06 ($41M increase):     $1.493 billion

FY 07 ($77M increase):    $1.569 billion (most domestic programs received no increase)

FY 08 ($145M increase):    $1.714 billion (plus $150M one-time supplemental, non-add)

FY 09 ($325M increase):    $2.039 billion

FY 10 ($306M increase):     $2.345 billion