US Government shutdown leads to the FDA grinding to a halt

The US Congress reached a deadlock after not being able to come to an agreement regarding funding, specifically reaching an impasse when Republicans and Democrats were unable to reach an agreement regarding Obamacare subsidies. The resulting shutdown on funding leaves federal organisations high and dry, including the FDA. 

Original story from Fierce Pharma. 

But the shutdown, which at least one former senator predicts could drag on for a month or more, will still have very real consequences for biopharma companies that don’t yet have an application in with the regulator, experts warned.

The FDA has committed to retaining 86% of its staff – equivalent to 13,872 workers – during the shutdown, according to a contingency plan posted on the Department of Health and Human Services (HHS) website. Sixty-six percent of those workers are immune from furloughs because their work is already funded or exempt, while the remaining 19% have been classified as excepted workers, meaning that their responsibilities have been deemed too important to sideline.

In turn, the FDA will be “less affected than almost any other federal agency that doesn’t provide clinical services,” former HHS deputy assistant secretary for health Steven Grossman wrote on his FDA Matters blog on Tuesday. Nevertheless, the agency has only been spared “in comparison to others,” and there “will be consequences” to the shutdown, Grossman warned.

In a letter to staff sent out Wednesday, FDA Commissioner Martin Makary confirmed that the budget impasse in Congress would “shut down certain operations of the agency.”

“Every employee will receive a notice indicating your status during the lapse in appropriations,” Makary wrote. “I have been working closely with the FDA Deputy Commissioner for Operations and Chief Operating Officer, Dr. Barclay Butler, to ensure that the FDA’s official shutdown procedures are implemented in the most efficient way possible.”

Although “many employees” will be furloughed during the shutdown, the FDA will strive to “fully execute our public health mission to the extent permitted by the law,” he added.

In its contingency plan, HHS noted that the FDA will not be able to accept applications for new drugs, generics, biologics, biosimilars or medical devices that require payment of a user fee while the shutdown is in effect. If companies have not already filed for a review of their products, they will now have to wait until Congress reaches a funding accord.

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While the FDA can continue to carry out certain work using leftover user fees it has already collected from applicants, the agency lacks legal authority to accept new fees assessed for the 2026 fiscal year until a 2026 appropriation or Continuing Resolution for the FDA is put in place, analysts at Leerink Partners explained in a Wednesday note to clients. 

The FDA will also need to halt most activities around unapproved drugs, with HHS noting the regulator’s ability to safeguard patients from “unsafe, ineffective, and poor-quality compounded drugs” will be limited.

As for the work, the FDA can continue to perform using carryover user fees – which companies typically pay when they submit product review applications to the agency – the regulator said it will keep reviewing applications for medical products, as long as that fee funding persists. 

The agency will also continue to issue certain guidance documents and carry out work essential to helping patients access drugs, diagnostics, vaccines and other medical products. The FDA will keep managing recalls and working to mitigate drug shortages as well, according to the HHS contingency plan. In addition, "certain surveillance inspections of regulated facilities" will continue, according to the plan.

The overall impact of the shutdown on the FDA is expected to be “limited” in comparison to other federal agencies, Leerink analysts wrote in a separate note to clients Tuesday, citing comments from an interview with former US Senator Richard Burr. Nevertheless, Burr noted that he’d anecdotally observed a “slowdown” in the FDA review process since President Donald Trump took office earlier this year, citing “frequent breakdowns in communication between the FDA and applicants,” according to the Leerink team.

“He predicts that the noise from a shutdown may further delay reviews and approvals to some extent,” the analysts added.

Overall, Burr noted that he saw the potential for an extended shutdown that could last for a month or more, although he told the Leerink team that he expected the biggest squeeze on healthcare to occur at academic institutions and companies that depend on NIH grants for their medical research.

The potential disruption from the shutdown comes after the federal government earlier this year cut 3,500 full-time jobs at the FDA as part of a broader initiative to downsize at the HHS. 

Meanwhile, even though President Trump has threatened a new round of mass reductions related to the shutdown, Makary recently told FDA employees that the agency would be exempt from that process, according to Bloomberg Law.

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Source: Fierce Pharma. FDA avoids the worst amid government shutdown, but new applications put on hold. [Date Accessed 02.10.2025] www.fiercepharma.com/pharma/fda-appears-avoid-worst-amid-government-shutdown-review-application-hurdles-remain