Donald Trump's Plan to Shift FDA Funding to Industry Draws Criticism

By Thomas M. Burton Features Dow Jones Newswires

President Donald Trump's 2018 budget proposed for the Food and Drug Administration puts the administration on a collision course with some in its own party in Congress over possible cuts in funding for the agency, according to FDA and congressional officials.

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The Trump plan calls for reductions in taxpayer funding of reviews of drugs and other medical products, as well as monitoring of food safety and medical-product safety, said staffers at the FDA and on Capitol Hill. Under the Trump plan, the cuts would be offset by an increase in user fees paid by the drug and medical-device industries to the agency for new-product reviews.

Administration officials are proposing to cut about $943 million from programs funded by taxpayers, out of a total current-year budget of about $4.8 billion. They say the cuts would be offset by its proposed near-doubling of user fees -- an increase of about $1.27 billion over the current $1.3 billion -- for the 2018 fiscal year.

FDA officials say this plan is unrealistic, mostly because the fees have already been negotiated with the industry and cannot be substantially increased. The two-year negotiations were concluded earlier this year and cannot easily be reopened, they say.

Last week, Sen. Lamar Alexander (R., Tenn.), chairman of the Senate's health committee, wrote that the Trump plan to increase user fees was "an interesting proposal" but not useful in the 2018 budget. His letter went to Tom Price, secretary of Health and Human Services, who backed the increased fees.

"It is way too late to have an impact on this year's agreements, which have been negotiated over the last two years," he wrote to Dr. Price. He noted that the Senate health committee already voted, 21-2, to approve much lower user fees. Even though the FDA negotiates the fees with industry, they become law only with congressional approval.

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A representative for Dr. Price didn't immediately respond to a request for comment.

Dr. Price had written Mr. Alexander on May 15 proposing the large increase in fees and recommending that the cost of reviews of new drugs, medical devices and other medical products at the FDA be 100% paid by the industry rather than by taxpayers.

Dr. Price said in his letter that "the Administration is committed to improving government performance while reducing the burden on taxpayers to achieve FDA's mission."

Sen. Patty Murray (D., Wash.), the health committee's ranking Democrat, said the Trump proposal "would upend our work" and "leave the FDA hamstrung and without the federal investments it relies on to carry out its important public health work."

An FDA spokesman declined to comment on the budget before it is made public on Tuesday.

"Although we appreciate that the president wants stable funding for the FDA, we do not support a wholesale shift in funding to industry," Ladd Wiley, executive director of the Alliance for a Stronger FDA, a broad coalition that includes consumer groups, pharmaceutical companies and others, said in a statement. "The primary beneficiary of the FDA's work is the American people not the industry that FDA regulates, and the public should therefore have an important role in funding FDA."

User fees have grown over the past two decades as a means of speeding approval of new drugs and medical devices without greatly raising taxes. These payments from the industry account for 70% of the funding of the FDA's review of brand-name drugs, 36% of that for medical devices and 75% of the budget for generic-drug reviews.

Write to Thomas M. Burton at tom.burton@wsj.com

(END) Dow Jones Newswires

May 22, 2017 19:03 ET (23:03 GMT)