Pathways' Pick of the Week: FDA’s 2022 Budget Request

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The Biden administration’s FY 2022 budget request includes some notable increases and reform proposals for FDA. Here are a few takeaways for medtech.

Numbers up. FDA’s overall device and radiological health budget would increase 7.8% to $676.5 million under the request. That’s part of an overall $6.5 billion FDA package, which also represents a 7.8% uptick from FY 2021. And the device budget authority requested from Congress (without adding industry user fees) would see an increase of 10.7%. The Alliance for a Stronger FDA, whose mission is to support the agency’s resources and funding, said it was “pleased and supportive” of the request based on its initial analysis.

Shortage scrutiny. One factor that clearly influenced FDA’s request is the agency’s experience during COVID-19. For devices, in particular, the pandemic has underscored concerns at FDA that it has insufficient authority to stay ahead of product shortages. The 2020 CARES Act gave FDA power to mandate that manufacturers give it a heads-up about potential oncoming shortages and related product details, but only during a federally declared Public Health Emergency. In the budget request, the agency argues that is not enough. “The COVID-19 pandemic demonstrated that by the time there is an emergency, it is often too late to prevent shortages,” it writes. FDA asks for authority to require detailed supply chain information linked to potential shortages even outside of emergencies, a request industry has been wary of based on administrative burdens and the global complexities of the device supply chain. The request also asks for $21 million to establish a new Resilient Supply Chain and Shortages Program for devices.

Catching counterfeits. The request also proposes more extensive enforcement tools to address counterfeit medical devices using the same methods, including fines and product seizures, that it has at its disposal to respond to counterfeit drugs. Counterfeit devices, in particular diagnostics, have been a major compliance challenge for FDA during the pandemic.  

Inspections reboot? FDA is hoping to get back on track in conducting device facility inspections in FY 2022 after a massive downturn in site visits since March 2020. The budget request stakes out a plan for FDA to conduct 3,159 domestic and foreign device establishment inspections next fiscal year, which is the inspection volume the agency had predicted for FY 2020 and 2021 when it rolled out its 2021 budget request in February 2020. Soon after than that, inspections were stopped due to the pandemic, leading to only 1,259 inspections in FY 2020 (which included about five months before inspections were stopped) and only an estimated 105 inspections likely during the current fiscal year. The agency is also asking for a $3 million increase for device field operations next year.

What else? While the pandemic is a primary driver of the budget request narrative, it is not the only issue at play. The opioid crisis remains a high priority for the agency, and that includes a focus on devices, in particular digital health tools, that might help treat opioid use disorder (OUD). The budget included an extra $2 million to CDRH specifically to support its efforts to establish a “streamlined framework” for authorizing OUD digital devices. The request also includes a $2.8 million line-item increase for CDRH’s “digital transformation” initiative, which funds IT upgrades to improve the center’s efficiency and transparency and also support for review of digital health technologies, including cybersecurity activities.

Excerpted from “Pathways Picks June 2: Remanufacturing Guide, Budget Picks, Medicare Meetings, and More,” Market Pathways, June 2, 2021.

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