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FDA and NIH both fare well under President Obama’s proposed 2015 budget

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By Mari Serebrov
Washington Editor

Although the Department of Health and Human Services (HHS) would, as a whole, see its revenue decrease slightly under the president’s nearly $4 trillion budget, the FDA and National Institutes of Health (NIH) could be in line for healthy increases.

Preliminary budget details President Barack Obama unveiled Tuesday call for $77.1 billion in discretionary funding for HHS in fiscal 2015 – $800 million less than the department received this year. Nearly 40 percent of that funding is slated for the NIH, which would receive $30.2 billion, up about 1 percent from $29.9 billion in 2014. (See BioWorld Today, Jan. 16, 2014.)

The NIH would be in for a larger bump in research funding if Congress buys into the president’s Opportunity, Growth and Security Initiative (OGSI), a $56 billion supplement to the budget. Under the initiative, NIH would receive an additional $970 million to support about 650 new grants and further fund the BRAIN initiative launched last year and other critical research priorities. (See BioWorld Today, May 15, 2013.)

The president’s $3.9 trillion budget is “a fiscal road map” that sticks to the discretionary spending caps Congress agreed to last December, Sylvia Mathew Burwell, director of the White House Office of Management and Budget, said in a media briefing Tuesday.

The congressional deal provided relief from sequestration by raising the discretionary spending triggers to $1.012 trillion for 2014 and $1.14 billion for 2015. If 2015 spending were to exceed that amount, government agencies would face another automatic across-the-board cut in discretionary funds. (See BioWorld Today, Dec. 12, 2013.)

The 2015 discretionary spending cap isn’t enough, Mathew Burwell said. That’s why the president proposed the OGSI – separate from the budget – as a way to increase federal investment in infrastructure, innovation and education. The initiative, to be paid for through tax reforms and program cuts, is intended to infuse more money into the economy.

By keeping the excess funding separate from the budget, the administration can claim to adhere to the congressional agreement and possibly avoid triggering another sequester when it exceeds the limits of that agreement.

In addition to the NIH funding, the OGSI would provide $50 million to support clinical trials for promising universal flu vaccines and advance the nation’s pandemic influenza preparedness. That’s in addition to $170 million in the president’s budget to continue support for high-priority pandemic influenza activities.

Aside from the OGSI funds, the proposed NIH budget includes increased funding for “innovative, high-risk, high-reward research to help spur development of new therapeutics to treat diseases and disorders . . . such as cancer and Alzheimer’s disease,” according to the administration.

The budget also includes funding for a new NIH advanced research program modeled after the Defense Advanced Research Projects Agency and calls on NIH to implement new policies to improve transparency and reduce administrative costs.

FDA AND OTHER PROGRAMS

The FDA could do even better than NIH in terms of new money. It stands to receive an 8 percent increase in total funding under the president’s budget, but most of it would come from new food safety user fees. Of the $4.7 billion proposed for the agency, $2.6 billion would be from tax revenue, compared with $2.55 billion for 2014. The new funding includes $25 million to strengthen FDA oversight of compounding pharmacies as it implements the Drug Quality and Security Act.

The FDA’s drug center would receive $480 million, a 3 percent increase over this year’s funding. But the device center, biologics center and the National Center for Toxicological Research all would see slight reductions in funding.

The budget contains good news for sponsors of medical countermeasures (MCMs), with $462 million set aside to enhance the advanced development of next-generation MCMs, including resources for the NIH’s Concept Acceleration Program and the FDA’s MCM regulatory science initiatives. It also provides $415 million for the Project BioShield Special Reserve Fund, used to acquire MCMs for the national stockpile.

If Congress follows the administration’s recommendations, antibiotic developers also could benefit from new resources. The budget would more than double the funding for the Centers for Disease Control and Prevention (CDC) to combat antibiotic resistance, and it would direct $30 million to an initiative to identify the sources of emerging infectious diseases faster, determine microbe resistance to antibiotics and study how microbes move through a population.

On the HIV/AIDS front, the budget would expand access to prevention and treatment while focusing resources on implementing effective and sustainable prevention strategies. It includes $2.3 billion for the Ryan White HIV/AIDS program and $1.1 billion for CDC’s HIV/AIDS, sexually transmitted diseases, tuberculosis and hepatitis programs.

FINDING OFFSETS

To offset some of the increases while still reducing HHS’ total budget by 1 percent, the administration is looking to savings from the Affordable Care Act (ACA), the elimination of duplicative programs and changes in Medicare policy.

For instance, the budget proposes reductions in HHS’ immunization and cancer screening programs. Such programs will no longer be necessary, the administration said, because the services will be financed and provided through expanded insurance coverage under the ACA.

The budget also would eliminate the CDC’s Preventive Health and Health Services Block Grants, which enable states to respond rapidly to emerging health issues and to fill funding gaps in programs dealing with the leading causes of death and disability.

The grants duplicate “existing activities that could be more effectively implemented through targeted programs within CDC,” the administration said.

As for Medicare, the budget calls for changes in the payment structure and includes proposals to expand value-based purchasing, strengthen quality incentives and reduce the risk of prescription drug abuse in the Medicare Part D program.