Lawyers Say Government Shutdown Could Stall Reviews
With a potential government shutdown looming in two weeks, FDA’s ability to use its user fee carryover balances to fund product review operations during a shutdown may be unlikely because the agency is further along in the fiscal year and those balances are likely depleted, according to BrownStein lawyers writing in a 2/27 client alert. Under the current continuing resolution, the federal government is funded through 3/14 and Congress is facing a more challenging environment to secure another continuing resolution or omnibus appropriations bill by that date to fund the remainder of fiscal year 2025 with Democrats sitting on the sidelines.
FDA has previously stated that it expected to have carryover funds to support fewer than 10 weeks of drug review work in FY 2025. “If FDA has continued to follow its first in, first out approach to accounting, these carryover user fee funds were depleted in December, during the last full month of the Biden administration,” the alert says. “Recognizing the possibility that FDA underestimated operating reserves and/or that monthly drug review expenditures during the first quarter or half of the fiscal year may be lower than average weekly expenditures, it still seems very unlikely that there will be carryover user fees available come March 14, which is over 23 weeks after the start of the fiscal year.”
If FDA has implemented a new approach to spending its operating reserve balances, the Office of Management and Budget (OMB) will need to permit their use during a shutdown, and this is not a given in the current Trump administration, the alert notes. While OMB during the first Trump administration gave FDA the green light to use carryover user fee funds during a shutdown, “there is no guarantee that the current OMB will do the same if a government shutdown is not averted by March 14, as the second Trump administration has already taken different approaches than the first Trump administration on several issues,” the alert notes.
“The current administration may not prioritize continuing medical product reviews during a shutdown,” the alert continues, “and so OMB may not permit FDA to continue drug review work if carryover user fee funds are in fact available. For the same reason, it does not seem likely that the administration will go against historical practice to consider drug review at FDA to be ‘excepted work’ (those who perform ‘excepted work’ [e.g., emergency work involving the safety of human life] are excepted from furlough during a government shutdown).”
If a government shutdown impacts user fee reviews, user fee dates will likely be extended by the length of the shutdown, according to the alert. “There may be longer delays for those drug applications for which FDA is planning an advisory committee review during the shutdown period, as it may take several weeks to reschedule an advisory committee meeting,” it adds.