Would Medtech Feel the Pain of Trump Budget Cuts?

Posted in Medical Device Business by amanda.pedersen on March 16, 2017

The NIH would absorb a painful $5.8 billion cut under President Trump's first budget proposal, and double the amount of user fees FDA collects from drug and device makers.

Amanda Pedersen


 

President Donald Trump’s plan to make America great again involves major slashes to the National Institutes of Health budget, and doubling the amount of user fees FDA would collect from drug and device makers.

Hear AdvaMed President and CEO Scott Whittaker's keynote address at BIOMEDevice Boston, May 3-4, 2017. Whittaker will discuss how medtech will fare in our new public policy.

According to the Trump’s administration’s “America First: A Budget Blueprint to Make America Great Again,” the NIH would face a major reorganization of its 27 institutes and centers, and would absorb a significant $5.8 billion cut to its current budget of $30.3 billion.

In a message to Congress signed by Trump, the president explained that he instructed his budget director, Mick Mulvaney, to craft a budget that emphasizes national security and public safety.

“A budget that puts America first must make the safety of our people its number one priority – because without safety, there can be no prosperity,” Trump wrote. “… To keep Americans safe, we have made tough choices that have been put off for too long. But we have also made necessary investments that are long overdue.”

In short, Trump’s budget blueprint for 2018 includes a historically large $54 billion increase in defense spending, significant increases for immigration enforcement, additional resources for the wall he wants to build on the southern border with Mexico, and increases funding aimed at reducing crime and opioid abuse."

That spending, however, is offset by “targeted reductions elsewhere,” and unfortunately for the biomedical research community, programs funded by the NIH are high on that list of “targeted reductions.”

Big Changes Coming to NIH

The budget blueprint would eliminate the Fogarty International Center, a $69.1 million program dedicated to building partnerships between U.S. and global health research institutions. The plan also calls for the Agency for Healthcare Research and Quality to be consolidated within the NIH.

The document also suggests there will be cuts to administrative costs, along with a “rebalance” of federal contributions to research funding.

During the presidential campaign, Trump said that what he hears about the NIH is “terrible.” He also told Science Debate that although he is committed to balancing the federal budget, investing in healthcare, science, engineering, and “other areas that will make the lives of Americans better, safer, and more prosperous,” would continue to be a priority.

The NIH received a funding boost in fiscal 2016, and its budget was supposed to receive a $1 billion to $2 billion bump in the 2017 fiscal year, which began in October, but Congress was not able to finish its 2017 spending plan, so spending is currently frozen at 2016 levels.

Several lawmakers on both sides of the aisle issued statements Thursday opposing the proposed cuts.

"More than 300 members voted to boost medical research by billions in November, we cannot turn around a few short months later and slash its budget," said Rep. Kevin Yoder (R-KS).

Countless medical researchers took to Twitter to share their views on the proposed NIH budget cuts.

"Brutal and stupid," tweeted Daniel Kraft, a physician, scientist and founder of Exponential Medicine, a San Diego-based cross-disciplinary medical conference.

"The proposed Trump NIH budget cuts expose, at their root, a fundamental lack of appreciation of the value of science and discovery," tweeted Bob Darnell, a professor and senior physician at Rockerfeller University and an investigator at the Howard Hughes Medical Institute.  

Medtech Caught in the Crosshairs

Medtech would also get caught in the crosshairs of the “targeted reductions,” as the budget would double FDA medical product user fees, raising the amount to more than $2 billion in 2018.

“In a constrained budget environment, industries that benefit from FDA’s approval can and should pay for their share,” the administration noted in the budget blueprint.

The funding mechanism was met with opposition by the Alliance for a Stronger FDA, which called the proposed increase in user fees "neither wise nor relistic."

The drug and device industries have recently completed user fee agreement negotiations with FDA, concurring upon an appropriate amount of industry fees to support agency improvements," the group said. "User fees have always been intended to supplement the agency's appropriation, never to replace it."

One potential upside for the industry, however, is that the plan also calls for new administrative actions designed to achieve regulatory efficiency, and speed the development of medical products.

Cutting some of FDA's red tape to improve approval times is expected to be a focus of Scott Gottlieb's, if he is confirmed as the new FDA commissioner. Gottlieb's nomination for the job was viewed as a big win for the industry.

In Mulvaney’s message, included in the blueprint, the budget director recognized that the document is not the full federal budget, but said it “does provide lawmakers and the public with a view of the priorities of the president and his administration.”

Amanda Pedersen is Qmed's news editor. Contact her at amanda.pedersen@ubm.com.