US Budget Proposal Calls for Higher FDA Funding, Drug Pricing Reform

By Miranda Greenberg -

June 3, 2021

President Joe Biden issued the Administration's fiscal year (FY) 2022 budget proposal, which includes higher funding for the US Food and Drug Administration (FDA), support for reforms to lower the cost of prescription drugs, and funding to launch a new agency for pharmaceutical innovation.

Higher FDA funding

The FDA and the President’s FY 2022 budget proposal are requesting a total budget for the FDA of $6.5 billion. The FY 2022 budget request is nearly an 8% ($477-million) increase over the agency’s FY 2021 funding level and includes funding for public health infrastructure, core food safety and medical-product safety authority, including $343 million in increases and $2.9 billion in user fees, an increase of $155 million. The FY 2022 request covers the period from October 1, 2021 through September. 30, 2022. 

The FDA’s budget request includes $185 million in additional funding to support public health infrastructure needs, including enterprise-wide data modernization, improvements to federal buildings and facilities, expanded laboratory safety efforts, and increased internal capacity to support the agency’s growing workforce of over 18,000.

The FDA’s budget request further includes $97 million in additional funding in core FDA safety programs, including $37 million in medical-product safety funding to provide dedicated programmatic funding to strengthen and monitor the supply chain, increase drug-safety surveillance and oversight, and improve animal-drug safety and predictive technologies.

It further includes $61 million in additional funding for public health issues, including additional funding for increasing inspections ($18 million), promoting health equity ($4.7 million), and addressing the opioid crisis by supporting development of new therapies and smarter enforcement ($38 million).

To complement the funding requests, the agency’s budget proposal also includes a package of legislative proposals designed to bolster the FDA’s authorities to further its mission to protect and promote public health. Notable proposals include: (1) authorize the FDA to request records or other information in advance of or in lieu of inspections; (2) improve the agency’s ability to assess human and animal pharmaceutical critical infrastructure and manufacturing quality and capacity; (3) expand the FDA's authority to require, when likely to help prevent or mitigate a shortage, that a drug sponsor evaluate, submit studies to the FDA, and label a product with the longest possible expiration date that the agency agrees is scientifically justified; and (4) extend current provisions related to counterfeit drugs to include medical devices to help keep counterfeit products out of the US and facilitate enforcement actions.

Lowering the cost of prescription drugs

In his budget proposal, President Biden briefly offered policy support for reforms that would bring down drug prices by letting Medicare negotiate payment for certain high-cost drugs and requiring manufacturers to pay rebates when drug prices rise faster than inflation.

“These reforms would lower drug costs and save money for Medicare beneficiaries and people with job-based insurance,” said the proposal. “The reforms could also yield over half a trillion in Federal savings over 10 years, which could help pay for coverage expansions and improvements.”

Funding for a new agency for pharma innovation

The budget proposal also includes funding of $6.5 billion to launch a new federal agency, the Advanced Research Projects Agency for Health (ARPA-H), within the National Institutes of Health (NIH), to provide increases in direct federal R&D spending in health. The funding is part of a $51-billion budget request for the NIH. 

With an initial focus on cancer and other diseases such as diabetes and Alzheimer’s, funding is intended to drive innovation in health research and speed application and implementation of health breakthroughs.

Source: US Food and Drug Administration and President Biden’s Budget Proposal