Everybody thinks they're poor, but Uncle Sam does have an ongoing deficit problem, and these budget issues are showing up in interesting ways of late.

Needless to say, these problems are affecting the appropriations process, but there may be an escape hatch, and a couple of items of interest for device makers may be at risk, depending on the outcome.

Will user fees cure the Cures problem?

It's time for the negotiations for the next round of device user fees, and the first meeting toward this end was a pretty chummy affair, given how the MDUFA III negotiations ran. The thing I found interesting about industry's comments at the July 13 meeting is how much effort everyone put into saying that user fees are not designed to supplant appropriated jingle, but should be used strictly to augment taxpayer dollars.

Then, acting FDA commish Steve Ostroff made a point of saying that the user fee negotiations and the 21st Century Cures mass movement should be seen as separate but parallel items. Maybe I just have an overactive imagination, but do they all protest too much?

Mark Leahey of the Medical Device Manufacturers Association pointed out that the total user fee schedule has roughly doubled each time the agreement is renewed. Let's remind ourselves that the House Cures bill gives FDA several hundred million dollars less than it needs to handle its end of the Cures program. But going from $595 million over five years under MDUFA III to nearly a billion bucks under MDUFA IV seems like a stretch.

Still, one has to figure user fees are going to rise substantially, and the Cures deal is precisely the sort of thing that will prompt industry to cough up more, especially when one considers how mangled the appropriations process is these days. Speaking of which ...

Another CR to the rescue

The House and Senate are working on spending bills for FDA and agriculture and so on, but President Obama and several Democrats keep arguing the sequester has to go. The President even raised this issue in connection with the 21st Century Cures program, but it's tough to see the political advantage in a veto of this kind of populist, bipartisan bill.

Appropriations bills are a different discussion, though. Democrats and the White House are determined to do away with the sequester, which has no doubt helped constrain budget growth. The problem on the other side is that FDA would lose money if the budget-cutters have their way, and the sources of those user fees know all too well how fungible money can be.

The continuing reliance on continuing resolutions (CRs) has some drawbacks, but one supposes there are worse outcomes. The House budget bill would trim about $2 million from the CDRH budget for 2016, but a CR might leave those numbers more or less even, so that's one advantage. Some in industry do not seem overly concerned about the potential for a CR to drain away a substantial volume of device user fees, a second reason to see a CR as a not-so-poison pill that may be the best available treatment for what's ailing Washington.