Executive Summary

President Trump’s FY 2019 budget request includes $473m in new non-user fee revenue for the US agency, a reversal of the previous year’s request.

President Trump offered FDA a bounty of potential new funding in his fiscal year 2019 budget request, most it not from user fees, although it is largely unclear initially where it all will go.

The agency would receive a budget of about $5.8bn in the upcoming fiscal year, a $663m increase over the annualized level contained in the continuing resolution funding FY 2018, according to HHS documents. It would be a nearly 13% increase in funding overall, much larger than has been seen in recent years and a substantial reversal from the funding strategy Trump employed in his FY 2018 budget request.

Regardless of how and whether the new budget plan is implemented, it is a positive sign that the agency’s mission has gained attention and importance within White House budget circles.

The increase includes $473m in new non-user fee funding, or budget authority, and $190m in user fee revenue, including new two new fees for export certification and OTC monograph reform.

An important caveat is that these annual presidential budget blueprints contain wish lists and make political points. Actual funding changes require congressional action.

The Alliance for a Stronger FDA, which advocates for agency funding, applauded the budget proposal, saying the growth in budget authority was the largest increase ever proposed for FDA.

“We have been concerned that FDA might have to continue to choose among important public health priorities,” Alliance President Kristin Stephenson, of the Muscular Dystrophy Association said in a statement. “This budget, if adopted by Congress with funds available under the recent budget deal, would provide FDA with substantial additional funds needed to serve the American people.”

Trump’s FY 2018 budget request proposed to increase FDA funding 10%, but cut its budget authority, relying on user fee increases for the boost. That likely would have violated the prescription drug, generic drug and other user fee renewal agreements.  (Also see “FDA Safety Initiatives Could Suffer Under Trump’s Budget Proposal” – Pink Sheet, 23 May, 2017.)

The proposed increase in budget authority is 72% higher than the prior year’s’ proposal and is a massive jump compared to previous presidential budget requests.

Beginning with FY 2010 through FY 2017, prior to Trump’s proposed cut, the budget request only increased FDA budget authority about 17%. With the increase in the FY 2019 budget, FDA’s budget authority increased more than 38% over the 10-year period (See chart below).

However, the enthusiasm likely should be tempered. While the budget request may serve as a starting point for negotiations on Capitol Hill, it almost certainly will not be implemented as proposed.

Still, it is a positive sign that the agency’s mission has gained attention and importance within White House budget circles. Alliance Executive Director Ladd Wiley said in the statement that the budget request “represents an enormous vote of confidence in FDA, a recognition that the agency is doing its job well and making a critical public health difference.”

Indeed, FDA Commissioner Scott Gottlieb has gained praise recently from Trump since taking over FDA in 2017.  (Also see “Trump On Right-to-Try: Gottlieb’s ‘Heading It Up’?” – Pink Sheet, 2 Feb, 2018.)

Drugs, Devices Programs Would Get Increases

Unfortunately, it remains largely unclear how FDA would spend the new funding. The HHS budget documents did not provide detailed plans.

HHS wrote that $3.6bn has been requested for “medical product safety investments,” which is $572m more than the FY 2018 continuing resolution. The total would be divided equally between budget authority and user fees.

HHS said the budget “advances FDA’s highest priority activities to ensure the safety and efficacy of medical products.”

It includes $20m for FDA’s Oncology Center of Excellence, which launched in FY 2017, to “allow FDA to more robustly help expedite the development of oncology and hematology medical products and support an integrated approach in the clinical evaluation of drugs, biologics, and devices for the treatment of cancer,” HHS wrote in the budget documents.

Friends of Cancer Research Chair and Founder Ellen Sigal said in a statement that the group welcomed the increase for the OCE and FDA.

“Increases to the FDA and NIH are vital for our nation’s health and well-being,” Sigal said. “We must not cut many of the vital research programs and those that patients rely on for access, prevention, and treatment.”

NIH would receive a $747m increase, about 2%, in Trump’s budget request.

The human drugs program overall would receive $1.85bn in FY 2019, which is $241m more than the FY 2018 continuing resolution. The biologics program would receive $403m, $45m more than the FY 2018 CR.

Countermeasures, Opioids Funding Included

The agency also would receive $24.5m for the medical countermeasures program to accelerate development, evaluation and approval and advance emergency preparedness and response policy.

In addition, the agency would receive $10m of the $10bn in new funding proposed in the budget for HHS to fight the opioid abuse epidemic. That money would come in addition to the budgeted totals, according to budget documents.

FDA’s portion would “support investment in regulatory science in development of tools to stem the misuse and abuses of opioids and to provide technical assistance related to clinical study design related to medication-assisted treatments,” HHS wrote.

“These funds would support the creation of diagnostics to support health professionals to more optimally deliver evidence-based medication-assisted treatments, and to accelerate the development of generic versions of opioid drug products with abuse deterrent formulations,” HHS added in the document.

Trump made fighting the opioid epidemic one of the pillars of reform in the budget request. FDA has been among the integral parts of the effort. Gottlieb has discussed changing opioid packaging to lower patient exposure (Also see “Opioid Packaging Standards Could Emerge From Dosage Guidelines in Labeling” – Pink Sheet, 11 Dec, 2017.), as well as potentially using the opioid Risk Evaluation and Mitigation Strategy to change prescribing patterns. (Also see “State Opioid Prescribing Databases Can Handle US FDA’s Needs, Officials Say” – Pink Sheet, 5 Feb, 2018.)

The budget request also includes several legislative changes intended to bring down drug prices, including changes to generic drug exclusivity rules. FDA would be allowed to tentatively approve a second generic and start the 180-day exclusivity clock on a first filer if there was nothing else blocking the second generic’s entry.

The change is intended to stop the gaming of the system.  (Also see “Trump’s Budget Request To Include ANDA Exclusivity Changes” – Pink Sheet, 11 Feb, 2018.)

The White House said it could save $118m in FY 2019 and $1.8bn over 10 years (see sidebar).

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