Print BCTV: The Morning After -- Sequestration still on table for FDA, NIH after government reopens

The Morning After

Transcript of BioCentury This Week TV Episode 161




Howard H. Garrison, Deputy Executive Director for Policy, Federation of American Societies for Experimental Biology


Kevin Wilson, Director, Public Policy, American Society of Cell Biologists


Steven Grossman, Deputy Executive Director, Alliance for a Stronger FDA


Dan Mendelson, Founder, Avalere Health




National Institutes of Health

Francis Collins, Director, NIH

Internal Revenue Service

Food & Drug Administration

Centers for Disease Control

Centers for Medicare Medicaird

Senator Deborah Stabenow (D-MI)

Representative Renee Ellmers (R-NC)

Representative Jack Kingston (R-GA)



Steve Usdin, Senior Editor




STEVE USDIN: What do shut downs and sequestration mean for science, medicine, and public health? This week, we'll take the political temperature. And in the Affordable Care update, we'll ask whether the exchanges can overcome a shaky start. I'm Steve Usdin. Welcome to BioCentury This Week.


NARRATOR: Your trusted source for biotechnology information and analysis, BioCentury This Week.


STEVE USDIN: The government shutdown highlighted NIH's role in searching for cures and America's reliance on FDA for safe food and drugs. In emotional press conferences, members of Congress from both sides of the aisle warned that closing NIH's campus and furloughing FDA staff were dashing hopes and hurting patients.


DEBBIE STABENOW: The shutdown has hurt the ability, as we know, of the National Institute of Health, also, the Center for Disease Control and Prevention and the Food and Drug Administration.


RENEE ELLMERS: I've seen these families. I've seen the looks on their faces when they're given hope. We have taken that hope away, and we need to replace it. If you are a family going to the NIH for care, it's because you are in a critical, critical situation, that you are looking for that last bit of hope. And you are looking for that treatment that will save your child's life.


STEVE USDIN: Was this just political theater? Reopening government is one thing. Funding NIH and FDA is another. Republican Representatives who pressed for reopening NIH and FDA also supported budget sequestration that limited FDA's ability to spend user fees and stripped over $1.5 billion from NIH's budget. As NIH turned new patients away from clinical trials, Representative Jack Kingston, a Georgia Republican, sponsored legislation to reopen NIH.


But in February, he told BioCentury This Week that NIH Director Francis Collins was exaggerating the harm caused by cutting research budgets.


JACK KINGSTON: So what we're looking at with sequestration would be approximately about a 5% cut to these agencies. So to say I got to operate on 95% of what I did last year, that's not disastrous.


STEVE USDIN: If austerity is here to stay, what's the right answer for taxpayers, scientists, and patients? Today, we'll talk with an advocate for FDA funding. But first, we're joined by two men who have spent years working on public policy strategies for American science: Howard Garrison of the Federation of American Societies for Experimental Biology and Kevin Wilson of the American Society for Cell Biology. Jack Kingston, who controls or has more control than anybody else does over the NIH budget, told me back in February that sequestration, that cutting 5% from the NIH budget isn't a big deal, anybody can live with that.


Michael Burgess, Representative Burgess said something to me similar. There are a lot of people in Congress who are saying that. What's your response to that?


HOWARD GARRISON: With all due respect to the Congressman and the Chairman, I'd like to ask them to walk a couple miles in our shoes. And we could show them the effect that this has been having. It's really a series of waves. It's not just a 5% cut. It's years of no growth funding in a very dynamic industry.


It has been real budget cuts. It has been the uncertainty that this is causing. It is now the disruption. And it is the threat of future cuts through sequestration. So it's a series of things that are having a continuous impact on the field. And it's really taking its toll.


STEVE USDIN: So Kevin, can you give some examples of what the funding cuts, the sequestration this year, some of the previous erosion in funding, what does that really meant for science? What has it meant for medical progress for patients, for people?


KEVIN WILSON: The most important thing is that grants that would and should have been funded are now, those scientists are not seeing their grant applications approved. And it it goes from the rank and file scientist all the way up into some most of the recent Nobel laureates. And among other things, it forces the community to sit back on its heels, unsure about what the future is going to be for their community.


The sequestration and the shutdown are just, as Howard was saying, are just the most recent insults to the community, starting all the way back with 2003. And then from then on, the community has been having cut after cut, insult after insult that have left real uncertainty in the community for the regular members and for the next generation.


STEVE USDIN: You mentioned the next generation. I think that's one of the bigger concerns. What does it mean when you have this uncertainty and when you have the real certainty of cuts that have happened? What does that mean for the next generation of American science?


HOWARD GARRISON: You need to understand about this community that you have some very talented, highly motivated people that are really making tremendous sacrifices of their time and their talent for the public good. This is a group of people, the most altruistic community I've ever known. And so in addition to the value that you get from their paycheck, you get their energy, you get their intelligence, you get their devotion. They're in the labs seven days a week, day and night.


And if you don't allow them the opportunity to go forward and continue that work, if you send a message that what they're doing is not valued, you have people who are talented enough to be successful at a wide variety of occupations. And you're losing this.


STEVE USDIN: You guys have been at this for a long time. I've been covering for a long time. Every time that we hear about somebody going up to Capitol Hill and asking for funding for NIH for biomedical research, they're always asking for more. And that's from the perspective of members of Congress. But they never, as far as I know, they never give a number and say, well, what's enough?


Can you put a number on it and say what would be enough, what's the level that American taxpayers should be supporting biomedical research? What's the delta between where we are at now and what would be enough?


HOWARD GARRISON: Well, it depends on what your criteria are. I think that the opportunities in biomedical research are outstanding. There are tremendous opportunities to progress on a wide range of fields. There are a number of initiatives coming out of NIH, the brain initiative, the cures acceleration initiative. The opportunity to absorb -


STEVE USDIN: That's still the more answer. Is there a number?


KEVIN WILSON: Let me try to answer your question a little bit higher up. I think, number one, it depends on what, as a country, we want from the research community. And number two, I think if you compare it to what the expected cost of not supporting research, then that will give you a framework of what is it that we expect? And if we don't do anything, what will the real cost be?


HOWARD GARRISON: Another example is we are still the leading nation in terms of biomedical research and a number of other fields. But as we dismantle our research enterprise, as we underfund it, as we cut it, as we dismantle it, we are losing funding. We are losing our world dominance.


STEVE USDIN: As we've discussed, NIH's budget has been under pressure for years. Here's a look at how inflation has eaten away at biomedical research funding.




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STEVE USDIN: We're back with science policy veterans Howard Garrison and Kevin Wilson, talking about shutdown, sequestration, and science. So we've seen there's this delta, this gap between where funding in real numbers is and what it is after inflation. It's a big gap, billions and billions of dollars.


Is it realistic to think that gap could be made up? Is that something in the foreseeable future that you think Congress could do?


HOWARD GARRISON: It's a goal that I think as a nation we must strive for, whether we can do it next week, next month -- probably not. But it certainly is our goal to regain what we've lost and to continue to expand, to make this country the leader in research that it's always been, to keep it that way.


KEVIN WILSON: I think it's a case of, the question is, is there the political will? In the past, there has been the political will to take these grand steps. Unfortunately, I don't think that there is the political will right now. But again, it is a case of what do we want? What do we want to pay for?


Do we want to pay a small amount of money for a large investment, literally an investment in the future? Or do we want to wait and pay even larger amounts of money for caring for the diseases that we won't be able to cure?


STEVE USDIN: So when we're talking about political will, I talked to somebody recently whose job it is to go up to Capitol Hill and talk to members of Congress about science. And he said to me, how can I even do this when there are members of Congress that publicly say that they don't believe in evolution, for example, and they don't want it taught in the schools? There isn't this public, political will for science among the politicians.


HOWARD GARRISON: Well, there's a wide range of opinions on Capitol Hill. I think when you stop and ask people about the value of medical research, I think people largely appreciate what it can do. I think it's our job as citizens who care about science and care about what science does for this country to be more vocal.


STEVE USDIN: So one of the other things maybe, is it time also to say, yeah, you want to get that delta made up, you want to get more? It's not going to happen, as you said, next week, next year. Are there things that we have to do, that the scientific community has to do, and that NIH has to do to live within the money that it's got now better, basically to accept this austerity and to make some changes to squeeze more science out of the money.


HOWARD GARRISON: Well, NIH and the community are going to make those decisions. They're going to be extremely difficult. And they're going to have a huge cost, no matter what decisions are made, because valuable science will not be done, important research will not take place. So it will hurt. And so those of us who care are looking not only at that delta, but at ways that we can go back to where we once were. This is a country that's always supported science.


STEVE USDIN: What are those trade-offs? Are there some kind of concrete things that members of Congress ask you and say, well, if we don't get that delta back, what are we going to lose? And does it have to be just across the board? Or are there some discrete things you say, well, we're not going to be able to do this?


KEVIN WILSON: Well, I think that one of the responsibilities that is connected with the question that you're asking is internally, as a community, we have to remove the stigma that currently exists about that is, the only way that you are a successful scientist is if you are working in an academic bench. There is a lot more to science than working at an academic bench and a lot more to science that is very important in moving us down the road to developing cures and treatments.


And right now, as a community, that stigma still exists. And it needs to change.


STEVE USDIN: So there's another issue which that plays into, which is, are we just producing too many Ph.D.s now who don't have any realistic expectation that they're going to become principal investigators, that they're going to get funded? Do we need to dial back on the number of Ph.D.s?


KEVIN WILSON: The only reason that's a problem is because currently, anything other than working at an academic bench is viewed as failure. That's where the problem exists. There is plenty of work that needs to be done in industry, taking basic research advances and taking it to market. There are scientific jobs there that are critical that need to be done, as well as other places.


STEVE USDIN: Well, thanks very much. That's an interesting topic and something we've talked about on the show before, and we will going forward. We've been discussing the effects of the shutdown and sequestration on basic science. The road to new therapies may start at NIH, but it must run through FDA. More on that in a moment.


NARRATOR: Healthcare is changing. And we're changing, too. Each week, watch BioCentury's Affordable Care update, a special part of every show, dedicated to keeping you informed about this unprecedented transition. And watch all of the weekly updates in one place at any time, only at




NARRATOR: Now, back to BioCentury This Week.


STEVE USDIN: We're talking about FDA's budget with Steven Grossman from the Alliance for a Stronger FDA, an advocacy organization.


Steven, reopening the government is one thing, but funding agencies is another. We've been talking about that for NIH. But it's also an issue for FDA. What has sequestration meant for FDA, and what would it mean if it continues?


STEVEN GROSSMAN: What it meant for FDA was $209 million less to spend in FY13 than it did in fiscal year 2012. And at the same time, the agency is getting new responsibilities and globalization and scientific complexity makes their job harder.


STEVE USDIN: What's you're kind of 'ask' as they say in Washington? What do you think Congress should do minus sequestration? We're leaving sequestration out of the picture for FDA. How much more do they need?


STEVEN GROSSMAN: Well, we've asked for about $80 million, $80 to $90 million higher than the FY12 base. And that would be $2.6 billion in appropriations. So that's still a modest increase given that they're implementing the Food Safety Modernization Act. They've got all of the requirements under the FDASIA. And there's just more to do. They're about to get legislation on compounding and track and trace.


The agency, unlike NIH, unlike CDC, is all people. It's all services. And so 80% of the FDA budget is salaries, rent, benefits, and such. The work output and the budget are very sensitive to each other.


STEVE USDIN: So what do you hear when you go to the Hill to talk about FDA's budget? Is their pushback about FDA specifically, or is it just caught up in the bigger fiscal crunch?


STEVEN GROSSMAN: FDA is definitely caught up in the bigger crunch. In fact, the authorizing committees have made very clear that they see FDA as necessary and important. In a time when there's not much legislation passing, there's been three, four major pieces of legislation over the last three years affecting FDA in changing and expanding its jurisdiction and its jobs.


You go to the appropriators and you look for the fiscal year that we're about to be in with all the downward pressures, both the House and the Senate were working on bills where FDA got a net increase.


STEVE USDIN: That's before sequestration, right? So if we have sequestration going forward, what is that going to mean for FDA, and what are the things that won't happen that would have happened if they'd had that extra money?


STEVEN GROSSMAN: OK, well first of all, how much sequestration there is is dependent on a lot of other factors that have nothing to do with FDA. Under one variation, all of the sequestration will be fairly minor and all come out of defense. On other scenarios, it could take 5%, 6%, 7% of FDA's budget.


This past year, in FY13, FDA lost $209 million. That was $124 million from the appropriation and $85 million from user fees. What did that not pay for?


Well, everybody worked harder because some of the work just has to be done. New program initiatives came very slowly. Inspections weren't increased, even though the law calls for that. New regulations, most of them called for by either Food Safety Modernization Act or FDASIA -- slower. People aren't getting to the work because there's so much and there should be more bodies. You've got offices that should have 10 people that are dealing with 6 or 7 and threatened with less.


STEVE USDIN: And there are things, you mentioned FDASIA that's a law that was supposed to improve a lot of things at FDA, the way they work, particularly on drug development. Some of those positions aren't being filled, right?


STEVEN GROSSMAN: That's correct. And particularly, the patient priority that comes out of that law calls for a lot more activity on FDA's part to reach out to stakeholders, to provide more opportunities. Each of those takes time. And each of them represents some portion of an employee's time to get it done.


STEVE USDIN: Steven, most people think of the FDA, to the extent they think about it at all, as kind of a cop on the beat. It's preventing bad things from happening, bad drugs from getting on the market, bad foods from getting on the market. Is that really the best way to think about it?


STEVEN GROSSMAN: No, FDA is both a public health and a regulatory agency. And it does have enforcement as well. So one part is the inspections. That's an important part. The Agency is also involved in providing some support for the food safety in this country, which is a huge industry. In addition, it's the source for new drugs and devices which represent hundreds of thousands of jobs. And certain segments are export positive, so they're things that the rest of the world want.


STEVE USDIN: So one of the things that's been the hallmark of Commissioner Hamburg's tenure as FDA Commissioner has been regulatory science, and her push for injecting more science, newer science into what FDA does. And it's like a lot of good ideas, when she first proposed it, people dismissed it. Then people thought, well, it's not really the right time for it. And now, everybody says it's obvious. But the real question is whether she has the money to do it. Whether FDA has the money to push regulatory science forward now.


STEVEN GROSSMAN: I don't think they do. I think that the budget increases have been very small. The fact that the agency has gotten any increase at all is a sign of congressional support, but it's not sufficient. And it's going into frontline food safety and drug safety issues. Regulatory science really has had to take a back seat.


New money has been found by -- what Congress always wants is for the agencies to be more efficient. And some of what FDA has done to become more efficient has been reinvested in regulatory science, but it needs a lot more work. And it needs to be based on the fact that the future is going to present ever more complex drugs and devices, and the Agency needs the tests. It needs the measurement tools to be able to evaluate them fairly.


STEVE USDIN: So one of the things that it does have that other agencies in government don't have is a large amount of money from industry -- user fees. One of the issues that's been happening with sequestration though, is some of those user fees are being held back. FDA can't spend them. How much is it that's been held back, and what effect does that have?


STEVEN GROSSMAN: As part of the sequestration, FDA lost $209 million of which $85 million was from user fees. That portion is - everybody's scratched their head about that. Supposedly that's the way the law is written, but that's industry money and it really doesn't contribute in any way that any of us understand to lessening the federal debt.


STEVE USDIN: Thanks. Up next, the health exchanges are off to a rocky start. Can the Affordable Care Act get back on track?




STEVE USDIN: Obamacare critics are pointing at dysfunctional websites and saying "I told you so" and reiterating calls for delaying the exchanges or the individual mandate. Even supporters of the law are cringing. To discuss the healthcare exchange's rough start, I'm joined by Dan Mendelson, CEO of Avalere Health.


Dan, what's the deal? Is this going to be kind of a fatal blow for the Affordable Care Act or just a bump in the road?


DAN MENDELSON: Well, there's no question that the failure of the federal exchange website is a big embarrassment for the Administration. You try to log on, you get error messages. And it is slowing people down right now. There's no question.


I think it's important to remember that we're just now three weeks into a six-month open enrollment period. So this does have some time to succeed. I think that it will come around.


STEVE USDIN: So you think that the people who have tried to log on and failed, are they going to come back?


DAN MENDELSON: Yeah, they'll come back. I mean, look, first of all, if you go out to make a purchase of this magnitude and you're delayed a little bit, you're going to come back to buy. And then, I think it's also fair to say that the real advertising hasn't even started yet because plans know that consumers generally make these purchases closer to their real deadlines.


We'll have a deadline in December for coverage to start in January. I think that's really the first time that you'll truly be able to assess what enrollment is likely to be.


STEVE USDIN: That's December 15, right, is the cut-off -


DAN MENDELSON: Yeah, it's December 15 to get covered -


STEVE USDIN: - to be able to get coverage starting January 1st. We know some things more now than we did before the exchanges opened up about what coverage is going to look like. One thing that's interesting that the country may be split between red and blue when it comes politically, but for health insurance, it's blue. It's Blue Cross, it's the affiliates of blue, right?




STEVE USDIN: What are the numbers on that? What does that mean?


DAN MENDELSON: Yeah. In our research, the blues are consistently offering lower-cost plans and they're offering them across really all states - in most states. I think what we'll see in terms of enrollment is that the blues really will be picking up a lot of patients.


And, look, they're generally very strong, if not dominant, in their markets. They have a strong presence across different types of insurance products. And if they slip in 5% more patients into a market, that's a good thing for them.


STEVE USDIN: There have been - just kind of a quick update on some of the other issues that have been in the news. One of them has been increased calls for income verification as part of some of the deals that might fund the government. What's the issue there?


DAN MENDELSON: CMS is doing some income verification. Income is verified by the IRS on a kind of a look-back basis. Republicans in Congress want more. They want more careful assessment. They also want to shine some light on this issue so that they can use that to show that they got something for this whole shutdown and the deficit fight.


STEVE USDIN: Do you think they're going to get it? Will it make a big difference if they do or not?


DAN MENDELSON: Yeah, I do. I think they will get an acknowledgment that more income verification is necessary. Whether it makes a big difference or not, it's a little hard to say. I think it's good ultimately for these programs to have strong income verification because, in the end, it does reduce fraud and it makes the programs tighter.


STEVE USDIN: So very quickly, one of the other issues that's been in the news has been coverage of Members of Congress and their staffs and White House officials. What's that all about?


DAN MENDELSON: Yeah. This is a showboat issue, honestly. I mean, it will not affect most Americans. The issue though is that if they are getting some subsidies, it's politically difficult to take those subsidies, particularly for members who oppose the law.


STEVE USDIN: Basically, what's happening is that there are members of Congress who are saying that the congressional staff and White House staff and members of Congress shouldn't get a subsidy that employees all over the rest of the country generally get.


DAN MENDELSON: Yeah. I mean, this is an issue like congressional pay. It becomes a visible issue and one that they like to fight about right around election time.


STEVE USDIN: All right. Thanks very much. That's this week's show. I'd like to thank my guests, Howard Garrison, Kevin Wilson, Steven Grossman, and Dan Mendelson.


Remember to share your thoughts about today's show on Twitter. Join the conversation by using the hashtag #biocenturytv. I'm Steve Usdin. Thanks for watching.