Trump Budget “Blueprint” Proposes NIH Cuts, Increases for FDA User Fees and Enforcement

The headlines are harsh. "Terrible," devastating," and "crippling," are words the biomedical industry is using to describe President Trump's proposed cuts to science and medical research in his 2018 budget proposal. On the flip side, some increased funding targets enforcement and public health.

While only Congress has the authority to make budget and appropriation decisions, the administration's budget is considered a "blueprint" of the president's spending priorities. Experts say based on the deep cuts in the 2018 budget proposal to the U.S. Department of Health and Human Services (HHS), including the National Institutes of Health (NIH), biomedical funding is clearly not a priority for President Trump. In his introductory message to the budget proposal President Trump explained that "defense and public safety" budget increases would be offset by "finding greater savings and efficiencies across the Federal Government. … We are going to do more with less, and make the Government lean and accountable to the people."

"The Trump administration's proposed budget would cripple the science and technology enterprise through short-sighted cuts to discovery science programs and critical mission agencies alike," said Rush Holt, CEO of the American Association for the Advancement of Science in a statement. "Investments in federal research and development make significant contributions to economic growth and public well-being. The administration's proposed cuts would threaten our nation's ability to advance cures for disease, maintain our technological leadership, ensure a more prosperous energy future, and train the next generation of scientists and innovators."

The diagnostics industry would be impacted by both the proposed cuts to the NIH, as well as the increase in U.S. Food and Drug Administration (FDA) user fees proposed in the budget. Also subject to increase is funding for enforcement efforts, particularly the Health Care Fraud and Abuse Control Program (HCFAC).

NIH Budget Cuts
In the proposal, $69 billion is requested for HHS, a $15.1 billion decrease (or 17.9 percent) from the current level. The NIH stands to lose $5.8 billion (an almost 20 percent reduction), bringing its funding to $25.9 billion, which is below 2003 levels. By comparison, 2013 sequestration cuts cut the NIH budget by 5 percent, a fraction of what's being proposed by the Trump administration. Even still, sequestration, the institute said, led to 700 fewer competitive research grants in fiscal year 2013.

"In the last 15 years, NIH-funded research has built the foundation for many of America's biotechnologies, such as developments in cancer treatments, genomics, and medical diagnostics," said Darrell Kirch, M.D., president of the Association of American Medical Colleges, in a statement. "Medical research takes years to translate from the bench to the bedside and cannot be turned on and off like a faucet. The proposed cuts would set back progress toward critical advancements that could take decades to regain, prevent new ideas from being explored, and have a chilling effect on those who would potentially enter the biomedical research workforce."

The Trump administration says the budget proposal "reduces administrative costs and rebalance[s] Federal contributions to research funding." While details are scarce in the two pages dedicated to HHS, the budget proposal also mentions "a major reorganization of NIH's Institutes and Centers."

Advocates for science and medical research remain hopeful that Congress will maintain its bipartisan history of "protecting" research investments, as Congressional members from both parties have expressed public concern over the proposed NIH cuts.

FDA User Fees
In addition to the proposed cuts to NIH funding levels, the administration's proposal looks to "recalibrate" medical product user fees, which could double what pharmaceutical companies and medical device manufacturers (including diagnostics companies) would pay in review costs. The FDA had decreased user frees in 2017 to what the Regulatory Affairs Professionals Society says are the lowest fees since 2013. The White House says the proposed increase in fees is "designed to achieve regulatory efficiency and speed." However, given the current shortage of FDA reviewers and the federal hiring freeze, experts are skeptical the increase in fees would achieve its stated goal.

HCFAC Increases
One area receiving a budget increase rather than cuts is Medicare and Medicaid fraud enforcement. The Blueprint includes a commitment to "investing in activities to prevent fraud, waste, and abuse and promote high quality and efficient health care." Recognizing that "[a]dditional funding for the Health Care Fraud and Abuse Control (HCFAC) program has allowed the Centers for Medicare & Medicaid Services in recent years to shift away from a "payand- chase" model toward identifying and preventing fraudulent or improper payments from being paid in the first place," the budget raises HCFAC discretionary funding for 2018 by $70 million to $751 million.

Public Health Emergency Funding
The proposed Budget also "[r]eforms key public health, emergency preparedness, and prevention programs"—such as changing preparedness grants to "reduce overlap," save expense and channel funding to states most in need. Additionally, the budget calls for a new Federal Emergency Response Fund to address public health crises such as the Zika Virus outbreak. Finally, the Centers for Disease Control and Prevention would get a $500 million block grant designed to provide more flexibility and address state-specific needs.

Takeaway: If enacted, the Trump administration cuts to the NIH could have profound negative effects on biomedical research and would increase FDA user fees. While Congress will ultimately decide the budget, the White House proposal would be detrimental to the biomedical industry, including the diagnostics sector.