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Impact of Shutdown Depends on How Long It Lasts

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By Mari Serebrov
Washington Editor

With both the House and Senate refusing to be the first to flinch in their ongoing game of chicken Tuesday, the rest of America was getting a feel for how the first government shutdown in 17 years might affect their day-to-day businesses.

For biopharma, the impact will depend on how long it takes Congress to agree on a continuing resolution to fund government agencies in lieu of a fiscal 2014 budget. The last shutdown of nonessential government programs lasted more than three weeks, from Dec. 16, 1995, to Jan. 6, 1996.

Unless a drugmaker has an upcoming PDUFA date or a meeting scheduled with the FDA, chances are the impact would be minimal – at least in the short term. While the agency’s contingency plan calls for 55 percent of the FDA staff to continue working through the shutdown, it’s hard to say how things would play out if the government were to remain closed for an extended period of time. (See BioWorld Today, Oct. 1, 2013.)

“Since the underlying activities and staff are paid for by a combination of user fees and appropriated funds, it is too early to predict the priorities and achievable workload of the retained staff,” according to the Alliance for a Stronger FDA.

By law, the FDA may continue activities funded by user fees and carryover money. But user fees cover only two-thirds of the agency’s drug review activities, Steven Grossman, deputy executive director for the alliance, told BioWorld Today. That split in funding means the FDA won’t be able to do everything it has in the past.

“They’re going to have to triage,” Grossman said of the FDA staff working through the shutdown. “They’re going to have to figure out what their priorities are” and then determine what can be accomplished with the reduced work force.

How those decisions affect advisory committees, user fee deadlines and various other product-critical, nonsafety functions remain to be seen, he added.

Adcoms on Tap

A few drug advisory committee meetings are scheduled this month. The Endocrinologic and Metabolic Drugs Advisory Committee is first in line with an Oct. 16 meeting set to discuss another indication for Amarin Pharmaceuticals Ireland Ltd.’s Vascepa (icosapent ethyl) tablets. (See BioWorld Today, Dec. 10, 2012.)

The Anti-Infective Drugs Advisory Committee is scheduled to meet Oct. 18 to consider Paladin Therapeutics Inc.’s new drug application (NDA) for miltefosine tablets to treat visceral, mucosal and cutaneous leishmaniasis. The day before that meeting, the adcom is slated to discuss susceptibility interpretive criteria for systemic antibacterial drugs and for dosing recommendations in labeling.

Later in the month, the Antiviral Drugs Advisory Committee is supposed to have a two-day meeting in which it will consider NDAs for hepatitis C drugs sponsored by Janssen Pharmaceutical Co. and Gilead Sciences Inc.

The FDA has yet to indicate whether the adcom meetings will be affected by the shutdown.

PTO, SEC Remain Open

The situation isn’t as iffy with some of the other government agencies that typically interact with biopharma. For instance, the shutdown isn’t likely to get in the way of filing and processing patents, as it will be business as usual at the Patent and Trademark Office (PTO). Funded by user fees, the PTO said it has sufficient prior year reserve fee collections to operate for about four weeks.

However, if Congress has yet to pass a spending bill by the time those funds run out, the PTO would have to close its doors. Should that happen, “a very small staff would continue to work to accept new applications and maintain IT infrastructure, among other functions,” according to the office.

Another agency that doesn’t intend to shut down any time soon is the SEC, which also receives fees. Last week, the SEC said it planned to remain open and operational in the event of a lapse in government appropriations. At the same time, it released a contingency plan, just in case.

Under that plan, about 250 employees – about 6 percent of the SEC’s work force of nearly 4, 150 – would remain on the job if the commission were to shutter its offices. The SEC would continue some law enforcement and monitoring activities, and its filing systems, including EDGAR, would remain functional.

However, should it shut down, the SEC would discontinue the processing and approvals of filings and registrations and of self-regulatory organization rule changes. It also would stop all nonemergency rulemaking.

While no one is venturing a guess as to how long the shutdown will continue, White House Press Secretary Jay Carney discussed speculation Tuesday that the standoff over the continuing resolution could be rolled into action on the debt ceiling. The Congressional Budget Office expects the Treasury Department will exceed its borrowing authority between Oct. 22 and the end of the month. Once that happens, it will take an act of Congress to raise the ceiling.

For now, biopharma is taking a wait-and-see attitude on the shutdown. Given the vital role federal agencies play in drug R&D, “we cannot speculate on the full impact of a government shutdown on the biopharmaceutical sector,” said Matthew Bennett, senior vice president of Pharmaceutical Research and Manufacturers of America (PhRMA).

Meanwhile, “PhRMA will work with the agencies and the administration in an effort to minimize any negative consequences a shutdown could have on patient health and access to medicines,” Bennett told BioWorld Today.