BRIEF—US government shutdown and FDA impact on pharma - update

30 September 2023

With the threat of a federal government shutdown looming in America, the operations of the US Food and Drug Administration (FDA) may be impacted creating some potential application delays for pharmaceutical and medical device companies.

The Senate is scheduled to hold a vote at 1pm ET today on the stopgap spending bill, which would keep the government open until 17 November 17.

Reed Smith counsel Sarah Thompson Schick, who is well-versed on any potential issues, suggests the following possible impacts:

The FDA is partially funded by user fees which will allow the agency to continue reviewing applications. Work on guidance documents and research will also continue. Although one-fifth of FDA employees will be furloughed immediately, while roughly 80% of the remaining employees will, under the law, be able to continue to work.
The FDA will not be accepting any new user fees, which could create significant delays for companies should the shutdown last for an extended time period.
The FDA's budget may be impacted as user fees run out, which may result in additional employee furloughs and longer delays for pharmaceutical and medical device companies awaiting approvals or clearances.

The last US government shutdown was in December 2018 and lasted for 35 days. The latest shutdown, if it occurs, would be the fourth within a decade.

Outcome of the vote

Congress narrowly averted a federal shutdown as the House, in a stunning turnabout, approved a stopgap plan to keep the US government open until mid-November. The bill, which will keep money flowing to government agencies, does not include money for Ukraine.