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Apr 11, 2013

Obama Budget: More NIH Grants, Higher FDA User Fees

  • President Obama’s proposed $3.8 trillion budget for the 2014 federal fiscal year offers small overall increases for NIH and FDA, but sizeable jumps in programs reflecting the administration’s biopharma priorities.

    Obama is seeking $31.331 billion in overall program level funding for NIH, up just 1.5% from the $30.852 billion spent during FY 2012. However, the NIH spending plan would deliver a 14% increase in the number of “new and competing” research project grants, a nearly 16% jump in spending on NIH’s translational medicine center, a 4% rise in stipends for postdoctoral trainees, and new spending on Alzheimer’s disease and brain mapping.

    NIH said it planned to award 36,610 research project grants in FY 2014 costing $16.932 billion, just 351 more grants (and 2% in dollars) than FY 2012. The grants number includes 10,269 new and competing grants, 1,283 more than two years ago. The cost of new-and-competing grants will zoom almost 24% or $902.958 million, to $4.685 billion.

    Another double-digit increase is in store for NIH’s National Center to Advance Translational Science (NCATS). The center—launched two years ago by NIH Director Francis S. Collins, M.D., Ph.D.—would see funding jump almost 16% from FY 2012 (and 4% from Obama’s still-pending FY 2013 budget proposal), to $665.688 million. Within NCATS, the Cures Acceleration Network, created to fund programs addressing scientific and technical challenges of translational research, would grow to $50 million from the current $40 million.

    Obama’s budget would raise stipends for entry-level postdoctoral trainees and fellows to $42,000, with 4% increases for each subsequent level of experience. The increase would be part of the National Research Service Awards program, whose funding will rise 1.8% from FY 2012, to $775.975 million—though the number of trainees supported would dip by 108, to 16,197.

    Decreasing as well, by 6.4%, would be research center grant funding, to $2.846 billion. However, NIH shifted about $67.9 million of the $194.5 million difference to its National Institute of Allergy and Infectious Diseases (NIAID), toward grants to establish multi-project translational research centers in biodefense and emerging infectious diseases research. Another $51.3 million of the drop reflected planned reductions within the Protein Capture, Human Microbiome, Molecular Libraries, and Bioinformatics and Computational Biology programs.

    The budget also formalized previously announced new spending on priority programs: $40 million for the brain mapping initiative announced by Obama on April 2, and $100 million to expand Alzheimer’s disease research, for which NIH has estimated it will spend $562 million on research.

  • FDA: User-Fee Hikes, China, and MCMs

    While FDA would enjoy a 21% bigger budget in FY 2014 under Obama’s plan, most—but not all—of that increase reflects previously enacted hikes in user fees paid by developers of drugs and other products regulated by the agency.

    FDA would see its total budget balloon to $4.8 billion, though its budget authority would increase only 2% or $51.884 million, to $2.558 billion. The remainder of the agency’s 21% hike would come from user fees that exceed levels enacted into law by Obama just last July in the FDA Safety and Innovation Act (FDASIA).

    FDASIA includes the fifth five-year authorization of the Prescription Drug User Fee Act, under which Washington anticipated collecting $720 million in prescription-drug user fees, and expanded the user-fee program to generic drugs (about $299 million anticipated) and biosimilar drugs (just over $20 million).

    But in his FY 2014 budget proposal, Obama called instead for $760 million in prescription-drug user fees, up 5.5% from FDASIA; $305.996 million for generics user fees, up almost $7 million; and $20.716 million in biosimilar user fees, up about $500,000.

    In 2014, user fees would account for 45% of FDA’s total budget, up from 35% in FY 2012. That percentage swells to nearly two-thirds (63.9%) of the $1.292 billion spent on human drugs programs, up from 50% two years earlier.

    Also rising would be the number of employees whose jobs would be paid through user fees. The number of full-time equivalent employees funded through prescription drug user fees would increase by 72, to 2,778. The budget also envisions 690 employees funded through generic drug user fees, and 72 through biosimilar user fees.

    No generic or biosimilar fees were collected in FY 2012. Those fees, FDA says, will help pay for it to adopt a pathway for approving biosimilars and biologic drugs. Obama's budget also revived his earlier plan to cut the exclusivity period for biologics from 12 to seven years—a proposal defeated in past years through industry opposition.

    FDA’s program priorities in 2014 include:

    • Medical countermeasures: $23.548 million, up $3.5 million or 17% from two years ago.
    • Drug inspections in China: $4.725 million and nine FTEs planned, compared with zero and zero in 2012.
    • New facilities: FDA will spend $17.658 million toward final build-out, certification, and operation of the agency’s two largest laboratories—Buildings 52 and 72 of the Life Sciences-Biodefense Complex—and the expansion of the vivarium, both set to be completed and be ready for occupancy in FY 2014. The projects cost a total $300 million spread over several years.

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