2017 Federal Budget Highlights Precision Medicine and Fraud Enforcement

By Kelly A. Briganti, Editorial Director, G2 Intelligence

Diagnostics figure prominently in key portions of the federal budget for Fiscal Year 2017. Significant funding is devoted to precision medicine, cancer, antibiotic resistance, and of course, Medicare enforcement. Here’s a rundown on some of the numbers in the budget requests from two key agencies of interest to labs:

Office of Inspector General

The OIG is requesting a total budget of $419 million to oversee the administration of the Department of Health and Human Services (HHS)—that includes $334 million for oversight of Medicare and Medicaid and the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative. Specific targets for enforcement will be “fraud and wasteful spending, including improper payments, unsafe or poor quality health care and security of data and technology.” The OIG boasts its most recent return on investment for the Health Care Fraud and Abuse Control Program (which fights fraud and abuse against public and private payers) at “approximately $7.7 to $1, the third highest in the history of the program.”

U.S. Food and Drug Administration

The U.S. Food and Drug Administration’s budget request for 2017 totals $5.1 billion—8 percent more than the budget enacted last year. The importance of diagnostics is demonstrated throughout FDA budget requests that support Precision Medicine-based diagnostics and treatments, combating antibiotic resistant bacteria, and improving cancer diagnostics and treatments.

While there is no specific mention of the FDA’s intentions with regard to oversight of laboratory developed tests, there are plenty of references to precision medicine. The amount of $200,000 is earmarked for the FDA’s precisionFDA platform related to genetic testing data. Precision medicine is also targeted to receive $1.8 million in part to establish the National Medical Device Evaluation System.

Most notably, the budget highlights the Cancer Moonshot Initiative announced by President Obama in his state of the union address. A White House Fact Sheet designates this as a “$1 billion initiative to provide the funding necessary for researchers to accelerate the development of new cancer detection and treatments.”  The budget allocates $195 million to the National Institutes of Health (NIH), and $755 million for cancer-related efforts at NIH and the FDA and other agencies. It also calls for establishing an Oncology Center of Excellence “to streamline collaboration across FDA’s Human Drugs, Biologics, and Devices and Radiological Health, Programs.”