The FDA faces a “catastrophic collapse” while massive layoffs endanger user costs

After be emptied This week, the FDA is now in a precarious position, at risk of losing one of its largest financing flows: user fees, according to an analysis of the political expert Alexander Gaffney.

In a FDA today Shared article with Biospace By Leerink Partners, Gaffney wrote (emphasizing his): “I want to emphasize: we are not talking about user fees that are struggling to adapt to lost staff. We are talking about A catastrophic collapse.“” FDA today is a publication of the agencyiq by Politico.

The FDA has several user costs programs, the most common of which is the Prescription medication user fee programwhich applies to new drugs and biologicals. The FDA also offers separate user fees for medical devices, generic drugs, biosimilars and other pharmaceutical products.

These programs allow the FDA to receive fees from pharmaceutical companies applying for examination for examination. All in all, the use costs include a huge part of the FDA total budget. In 2024, user fees totalized $ 3.328 billionJust under half of the total balance of $ 6.872 billion from the agency.

The FDA uses this money to support its operations, mainly subsidizing employee salaries. The user fee program, above all, does not guarantee a favorable examination for participating pharmaceutical companies. Instead, these participants are able to negotiate with the FDA on certain deliverables and performance measures to which they can hold the responsible agency. These may include response times, a number of meetings and similar.

Under normal circumstances, the user -fee program is re -authorized every five years, the next cycle which should start at the end of 2027. However, because the negotiation process between the agency and the industry is complicated and developed, the program renewal process begins well before the start of the next execution. According to Gaffney’s complete analysis for AgencyiqThe first step in the process for the next series of use costs should start in September 2025.

The problem, according to Gaffney, is that mass layoffs have left the crippled FDA, with not enough employees on the staff to maintain the user costs program.

Citing interviews with regulatory policy employees who were recently employed at the FDA, Gaffney stressed what is called the “trigger mechanism” of the User costs program, which is intended to “ensure that the FDA and appropriars do not fall below historical financing levels and are not tempted to use the costs of use of the industry to replace the appropriate financing.” If the financing falls below certain thresholds, the FDA will no longer be authorized to collect user fees and will rather be required to reimburse the existing costs.

“The agency is dangerously close to triggering these conditions after layoffs,” wrote Gaffney. Many staff members who knew the financial functioning of the user fees programs were released, and each additional employee who comes out and is not replaced “leaves the agency in a more precarious position”.

Worse still, apparently “almost nobody” knows that this trigger mechanism exists, warned Gaffney or how close the regulator is to hit it.

If the FDA reaches this trigger threshold, Gaffney continued: “It would lose billions of funds and would be forced to compete thousands of additional staff.”

According to a note by Leerink analysts to investors on Friday morning, “Congress could introduce a statutory delay if the financing of the programs for the use of tariff costs is lower than the trigger, which could provide the FDA with a little time to comply. But following significant DOGE discounts, the agency may find it difficult to hire the staff. And since RFK JR. Renegency of user costs programs. »»