FDA seeks 5% budget raise to offset inflationary pay increases

The US Food and Drug Administration (FDA) is asking for a nearly 5% increase in its budget for FY 2025, in part to provide its staff with pay increases to offset recent inflation.

During a webinar hosted by the Alliance for a Stronger FDA on 15 April, FDA officials said the lack of additional inflationary pay increases in the current budget has had detrimental effects on its ability to fulfill its public health mission.

Such pay increases would be accounted for in the agency’s $7.2 billion budget request to Congress for FY 2025, which includes about $3.7 billion in appropriations and $3.5 billion in user fee dollars. The request includes $173 million in appropriations over the agency’s FY 2024 funding level.

Benjamin Moncarz, FDA’s chief financial officer, said the increased funding is meant to help the agency make progress in key areas such as food safety and nutrition; cross-cutting issues related to medical products; modernizing the agency’s infrastructure, buildings, and facilities; tobacco regulations; and strengthening US biodefense capabilities. He noted the agency is asking for an additional $8 million to modernize its cosmetics oversight, $2 million for enterprise transformation, $15 million for its human foods program, $8.3 million for IT modernization, $12.3 million to address supply chains and product shortages, $1 million to expand its foreign offices, and $114.8 million cover a 5.2% inflation-based pay increase for certain federal employees that took effect earlier this year.

Moncarz emphasized the importance of giving FDA staff increases based on inflation to maintain its competitiveness and ensure it can hire people in a timely manner so the agency can go about its business. He noted that like many other agencies, FDA did not get additional funding for the inflationary pay increase in FY 2024, which led the agency to shift resources from its centers to pay for the increases. He also noted that if the agency does not get additional funding for pay increases in the next budget, it will have a “devastating and challenging impact” on the agency and its offices.

“I fully understand the fiscal predicament, and this is the one area that we really would appreciate support from Congress in fiscal year 2025,” said Moncarz. “I know that this is not tied to a specific initiative or programming increase, but this funding increase is critical to make sure we can continue serving the public in an exceptional manner.”

Due to a lack of additional funding for pay increases, Moncarz said he’s heard from FDA leaders that they have had to delay hiring staff and not fill certain vacancies. He also noted that this limits the professional and educational development the agency can provide, further straining its existing staff and hurting the agency’s ability to recruit from the private sector.

“FDA does rely on its highly-skilled specialized staff that are difficult to recruit and retain without additional funding from Congress,” said Moncarz. “We have to absorb those mandatory cost increases at the expense of filling needed positions and reducing some of our programmatic activities that support the public health.”

FDA’s Chief Medical Officer Hilary Marston said that some of the additional funding will be used to address product shortages and supply chain vulnerabilities. The issue has been a major talking point for FDA Commissioner Robert Califf and other agency leaders, who have asked Congress for more authority to address potential product shortages.
Marston noted that while the Covid-19 pandemic “laid bare” the US products supply chain vulnerabilities, the agency has seen increased shortages driven by economic factors. Califf has also recently expressed concern that many drug shortages are due to generic drugmakers finding it not profitable enough to produce certain drugs.

“We’ve had increasing market driven vulnerability in our medical product supply chains that FDA is working to help mitigate, but that ultimately we cannot solve,” she said. “A market-based failure needs to be solved with market-based solutions.”

Marston said that currently, FDA has a small staff that is working to address supply chain issues and help coordinate responses to them across agencies but wants the additional funding to increase its staffing to address larger supply chain challenges, such as those posed by natural disasters. The extra funding would also pay for additional investigators domestically and internationally.

“Further, we’d like to build out some of our analytic capabilities, both in drugs, devices, and foods, to make sure that we’re able to understand vulnerabilities in the supply chain, but also predict where there might be risks of supply disruptions and understand better where to direct some of our resources, such as our inspectional resources,” Marston added.

Martson also noted that FDA is asking for $670 million in the budget request to modernize the agency’s regulatory capacity and infrastructure to address biological threats, such as its response to future pandemics.

“Drawing on some of the lessons from COVID-19, we want to make sure that we’re building out our programs to better respond and build on what worked in responses in the future,” she said. “What that funding will do is build up a cadre of reviewers, invest in data exchange platforms, and help build out some of our research and development that’s so important to these efforts.” RAPS