The Office of Management and Budget has released a budget request for fiscal year 2024 for all departments of the federal government, including a proposed budget for the FDA. This includes an increase in the FDA’s budget authority of $372 million, which represents a 10% increase in this funding source and would help drive the agency’s total funding to $7.2 billion.
The FDA stated that it expects to receive $150 million more in user fees in fiscal year 2024 than in fiscal year 2023, an increase that will be aided by the MDUFA V user fee program for medical devices. Medical device user fees are expected to rise from $325 million in FY 2023 to $331 million in fiscal year 2024. In fiscal year 2022, the FDA received $243 million in device user fees. The annual user fee target increases slightly over each of the five years of MDUFA V, and application fees have increased significantly compared to the previous user fee agreement.
The FDA would apply $23 million of the additional budget toward programs for the opioid crisis, including an increased emphasis on the use of digital health medical devices for pain management. The budget request includes $11.6 million for improvement of the medical device supply chain and related shortage programs, as well as $50 million for the FDA’s participation in the Cancer Moonshot program. Among the areas of emphasis in the Moonshot program are improved evidence generation for populations that are underrepresented in clinical trials, and an expanded collaboration for new diagnostic and therapeutic products for cancer.
There are several legislative proposals included in the FDA budget request, such as a permanent authority to require that medical device manufacturers notify the agency of any potential interruptions or discontinuances in manufacturing. This would constitute an expansion of an authority that was temporarily in place for the COVID-19 pandemic. The FDA also seeks the authority to require that a manufacturer’s risk management plan provide a response for any difficulties in meeting increased demand for its products, as well as an increase in its authority to manage potential drug shortages to account for increases in demand.
Other legislative proposals include a new authority to require drug and device manufacturers to retain all premarket data for as long as the product is in distribution and use, and an improved ability to manage reviews of drug-device combinations that involve a generic drug. The FDA seeks an amendment of the statute that would allow it to destroy any imported drugs or devices deemed to present a public health threat, which would help prevent the reimportation of such products. Any costs incurred in the destruction would be charged to the importer of record.
The budget request for the National Cancer Institute is $7.8 billion, but more significant is the propose to increase the amount allocated to the Advanced Research Projects Agency for Health (ARPA-H), which would receive $2.5 billion. This would be an increase of $1 billion over fiscal year 2023, while total funding for the Cancer Moonshot would be $1.7 billion.
The White House has proposed to expand the number of pharmaceutical agents that would be within the scope of drug price negotiations, an expansion of authorities that were included in the Inflation Reduction Act (IRA) of 2022. The budget proposal expands the IRA requirements for rebates that must be paid to the Medicare program when drug prices increase at a rate faster than the rate of overall inflation. The budget proposal is just the first step in the budget process, however, with committees in both the House and Senate poised to hold hearings in the coming months on the budget and associated appropriations.