Statement Regarding Potential Budget Cuts to the FDA and NIH

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The Alliance for Regenerative Medicine (ARM), the advocacy voice for regenerative medicine, has significant concerns about the automatic budget cuts to the US Food and Drug Administration (FDA) and National Institutes of Health (NIH) scheduled to take affect on January 2, 2013 under sequestration provisions of federal law.

Based on our reading of the report issued on September 14 by the Office of Management and Budget, agency budgets will be cut by 8.2% from FY '12 levels.  That means NIH would lose about $2.5 billion while FDA's budget will be cut approximately $319 million. 

The FDA cuts include sequestering of user fee funds paid by industry under current law.  The combined loss of funding from appropriations and user fees for the FDA would be devastating.

Regenerative medicine holds promise for treating diseases and disabilities -- many of which are currently untreatable, as well as reducing overall health spending.  Regenerative medicine products already on the market treat complications from diabetes, help patients recover from oral surgery and treat other conditions.  With over 200 late stage clinical trials of regenerative medicine products underway for diseases such as stroke, heart disease, and spinal cord injury, that is just the tip of the iceberg.  As a growing technology it also will lead to creation of new, high-paying jobs.  To achieve this objective, however, requires a partnership with the federal government, especially FDA and NIH.  Sufficient funding for these two agencies is critical if regenerative medicine is to fulfill its promise.

Specifically, the Congress recently passed bi-partisan legislation designed to reform FDA regulatory processes.  These changes will greatly improve the path to market for regenerative medicine and other products.  However, secure funding for the agency is essential to turn the proposals enacted by Congress into policies and practices that will help safe and effective products reach patients more quickly.  Simply put, cuts of this magnitude will prevent the agency from implementing these important reforms.

Similarly, NIH funding is critical to the discovery of new medicines.  This is particularly true in areas such as regenerative medicine, where the agency performs important research that often forms the foundation of drug development efforts.  The budget cuts contemplated under sequestration will impede these important efforts. 

In addition to the depth of these cuts, we are concerned that if Congress does not act quickly to restore these funds, the agencies will be forced to take steps to plan for sequestration.  This will impact their operations in the near term as well as agency morale; both are critical for the agencies to meet their mandates.

We understand the need for federal budget discipline and are prepared to work with all parties to develop appropriate policies.  However, cuts at these levels are at cross-purposes with our nation's goal to develop treatments for the diseases that affect American families.