Dive Brief:

• The Food and Drug Administration, already reeling from layoffs and leadership changes under the Trump Administration, warned that the government shutdown will delay or pause important work at the agency.
• In a memo released before the shutdown began, the FDA said it expects to retain 86% of its staff, or 13,872 employees. The agency can continue reviewing existing applications for products, including drugs and medical devices that are funded by user fees, but will not be able to accept new submissions. 
• The FDA will also stop many regulatory activities that don’t address “imminent threats to the safety of human life.” For instance, food safety efforts will be reduced during the shutdown, and the agency won’t be able to support much of the work done to protect Americans from unsafe and ineffective compounded drugs, the FDA said.

Dive Insight:

A shutdown of a few days or a week likely won’t have a major impact on Americans or on the health-care industry. But an extended standoff between Republicans and Democrats over the budget would affect research funding, health insurance negotiations and eventually the flow of new medical products onto the market, analysts said.

While the agency emphasized that most of its employees will stay on the job, the total number of workers is less than its previous contingency plan before President Trump took office. That plan called for 77% of the FDA’s staff, or 15,223 employees, to be retained during a shutdown. 

The numbers “reflect the impact of the significant job cuts at FDA early in the Trump Administration, with many non-user fee positions already eliminated,” TD Cowen analyst Rick Weissenstein wrote in a note to clients. Still, he said, the earlier actions mean the agency probably won’t be significantly impacted now if Trump follows through on his threat to fire more of the federal workforce because of the shutdown.

The budget impasse comes during a year that has already featured much uncertainty for the industries regulated by the FDA. In addition to layoffs throughout the Health and Human Services Department, many key officials have either resigned or been forced out of the FDA, thinning expertise and heightening scrutiny of the agency’s ability to complete reviews on time.

FDA Commissioner Marty Makary has said that the “trains are running on time” at the agency. But there have been signs of slippage, with key products facing extensions in review times and at least one case of a delay because of “resource constraints.”