According to federal officials, the budget sequester and the government shutdown have drained approximately $85 million from the FDA's financial reserves. These reserves came from user fees that pharmaceutical and medical device companies pay to the FDA.
With sequester cuts still in effect, portions of collected user fees are placed in an account where they are out of reach.
"Sequestration was intended to reduce public spending, not private dollars that companies agreed to pay in order to expedite the approval of safe and effective medicines. This reaffirms the need to pass legislation that exempts from sequestration the private money FDA collects in user fees so that they may be used by the agency in full for their intended use," noted one official.
As of now, officials have made efforts to protect FDA user fees from the effects of sequestration. Both the Senate and the House have made moves to shield these fees, but nothing has been passed as of yet.
Funds that are sequestered will stay in the FDA Salaries & Expenses account. However, they will not be available to the agency unless Congress appropriates them. The sequestered funds are marked as unavailable and can not be diverted for other uses at the agency.
For the medical device industry, this could spell bad news. In total, the FDA will have approximately one-twentieth of its 2013 budget cut due to sequestration. Unless this issue is resolved, review times for medical devices could grow much longer.
