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Delays expected as result of furloughs at FDA, HRSA

By Jaimy Lee
Posted: October 1, 2013 - 2:30 pm ET

The government shutdown has led to furloughs of about half of the staff at the Food and Drug Administration and the Health Resources and Services Administration and may lead to delays in the agencies' operations.

The FDA will retain 8,180 people, or about 55% of its staff during the furlough, according to HHS' contingency plan.

Most of the shutdown's impact will hit the agency's food safety, nutrition and cosmetics activities, although the FDA also will be required to stop the majority of its laboratory research and will have to cease routine inspections, an FDA spokesman said in an e-mailed statement.

“It's a little hard to know exactly how it's going to impact things,” said Glenn Engelmann, a lawyer with McDermott Will & Emery who tracks FDA issues. “Inevitably, it's going to cause delays.”

The FDA is partly funded by user fees, which are paid by pharmaceutical and medical device manufacturers in exchange for agreed-upon performance goals. Some activities related to the user-fee funded programs, such as product approvals and safety communications for drugs and devices, will continue. About 75% of the FDA staffers who have been retained have jobs that are funded by user fees.

“FDA activities that are continuing during the government shutdown include those that do not rely on annual appropriations, and activities that involve the safety of human life and protection of property,” the agency spokesman said.

The Alliance for a Stronger FDA, which advocates for FDA resources, described HHS' contingency plans as “dramatically better” than a 2011 contingency plan. But the group noted that activities ranging from advisory committees to user-fee deadlines may be affected because those activities and staff are paid by a combination of user fees and appropriated funds.

“It is too early to predict the priorities and achievable workload of the retained staff,” the alliance said in an Oct. 1 statement.

Others say they expect a slowdown in the approval process. In addition, the shutdown could lead to further delays in agency guidance on biologics and biosimilars as well as social media.

“The agency's been pretty clear that those activities that are covered by user fees are not going to be totally immune,” Engelmann said. “When new drugs and devices enter the queue, I would not be surprised to see some slowdown occur.”

In a statement, Matthew Bennett, senior vice president of Pharmaceutical Research and Manufacturers of America, said his organization would work with the Obama administration to minimize negative consequences that the shutdown could have on patient health and access to drugs.

At HRSA, just 800 of the agency's 1,981 employees are being retained during the shutdown. The agency, which administers the 340B federal drug discount program, said in a statement that the 340B database will remain online; it is operated by Apexis, an external vendor.

However, a quarterly registration period during which healthcare providers and pharmacies register for the program may be delayed. The registration period, which begins Oct. 1, lasts 15 days. The next registration period is in January.

“The 15-day window for authorizing officials to accept or cancel certain types of requests remains unchanged, but HRSA will be unable to process those requests until normal operations resume,” HRSA said in an e-mail to 340B stakeholders.

Ellyn Sternfield, a lawyer with Mintz Levin Cohn Ferris Glovsky and Popeo, said providers and pharmacies can continue to submit registrations but they are not likely to be processed or HRSA will not be available with technical support.

The shutdown could also mean fewer or no 340B audits and could affect pricing adjustments, which occur quarterly. If that were to occur, providers could continue to pay higher prices for some drugs and manufacturers may lose money if a price adjustment has not been reflected.

“340b prices are based upon pricing metrics that are reported to the federal government quarterly and adjusted,” Sternfield said.

Follow Jaimy Lee on Twitter: @MHjlee

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