Will Trump’s Hiring Freeze Put FDA’s New Cures Jobs on Ice?

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By Jeannie Baumann

President Donald Trump’s move to reduce the size of government could potentially undermine part of the 21st Century Cures law to help the FDA accelerate approval of new medicines.

The 90-day hiring freeze imposed by the new Trump administration juxtaposes with an explicit hiring authority provided for the Food and Drug Administration under Cures, a biomedical innovation law that was enacted in December with strong bipartisan support ( Pub. L. 114-255). How the hiring authority and hiring freeze will play out together at the FDA is unclear. But it appears the agency won’t be moving forward in the next few months with part of the law that allows it to be more competitive with the private sector in recruiting top scientists.

“At least for the first 90 days, which is a relatively short period of time, I think the hiring freeze overrides the hiring provisions of 21st Century Cures,” Jennifer L. Bragg, a health-care attorney with Skadden, Arps, Slate, Meagher & Flom LLP who spent five years in the FDA Office of Chief Counsel, told Bloomberg BNA on Jan. 25.

Paul Howard, director of health policy at conservative think tank the Manhattan Institute, expressed similar thoughts Jan. 25. “As far as I can tell, the president’s order is a blanket hiring freeze,” he said.

The Jan. 22 memorandum ordering a freeze on hiring new civilian employees delivered on one of Trump’s campaign promises. But the hiring authority under Cures—provided in the section Improving Scientific Expertise and Outreach at FDA—was a key part of Congress’s FDA reform efforts to spur new medical treatments. Robert M. Califf, who was in charge of the FDA up until Trump’s inauguration, said a number of times the new hiring authority is a critical step in meeting the agency’s mission of advancing public health.

While Califf told Bloomberg BNA he doesn’t have details about the hiring freeze, he said in a Jan. 24 e-mail, “The science underlying medical product development, agriculture and animal health is moving rapidly—informatics, big data, molecular biology, genomics, gene editing and 3D printing—just to name a few areas.”

“FDA needs to understand the technology to play its role,” Califf said.

The hiring provision in Cures doesn’t require the FDA to use the new streamlined hiring authority, but it does require the agency to develop a strategic workforce plan for Congress within 18 months of passage, Wade Ackerman, an attorney at Covington & Burling and former Senate counsel who negotiated many of the FDA provisions in Cures, including the hiring provision, told Bloomberg BNA.

“Keep in mind that the Cures Act was about advancing medical innovation, and Congress included a new authority to provide FDA with direct hiring authority for positions related to drug and device development and review,” Ackerman said in a Jan. 25 e-mail. The FDA’s drug center is down more than 600 positions, he said, and Cures streamlined the agency’s hiring process to help with those challenges. “FDA has faced great difficulties in hiring doctors and other professionals for key medical product review positions.”

The FDA referred inquiries about the hiring freeze to the White House, which did not respond to a Bloomberg BNA request for comment.

Potential Carve-out?

Mark B. McClellan, a former FDA commissioner who is now director of Duke University’s health policy center, noted Trump’s memorandum includes a carve-out that states any department or agency can exempt “any positions that it deems necessary to meet national security or public safety responsibilities.”

“That might encompass this legislation,” McClellan told Bloomberg BNA on Jan. 25. “So one next step is further clarification about how the hiring freeze is going to be implemented.”

The agency’s ability to meet critical new responsibilities under the Cures law will depend on staffing, said McClellan, who left the FDA to run the Center for Medicare & Medicaid Services. Unlike the CMS, where the agency’s funding goes out in payments to providers, he said most of the FDA’s budget pays for staff.

“FDA, just about more than any other agency in HHS, is dependent on personnel,” McClellan said. “It’s the regulatory expertise, the people that make the difference.”

The FDA frequently can’t offer a competitive compensation package to the leaders the agency wants to recruit, which is “an issue the FDA runs up against all the time,” Skadden’s Bragg said. “The provisions in 21st Century Cures were designed to be able to expand FDA’s ability to compete for this talent by expanding the narrow ranges that are provided in the existing salary schedules,” she said,

As products that come before the FDA grow in complexity, Bragg said, the agency needs those top thinkers to strengthen the industry and health care more generally. “In my mind, they always have needed them,” she said. “But it’s the case now more than ever.”

The memorandum further directs the White House Office of Management and Budget and the Office of Personnel Management to develop within 90 days a long-term plan “to reduce the size of the Federal Government’s workforce through attrition,” at which point the memorandum will expire.

Bragg noted the Cures law does not require the FDA to increase its employee pool; it provides the agency the ability to hire the best people when hiring takes place. “I think the way it plays out is that for those who are hired, there will be more flexibility on salary,” she said. “This does not necessarily mean, however, that the new administration is going to going out and look for lots of new people to hire.”

User Fees Paying for Cures Provisions?

Daniel A. Kracov, co-chairman of life science and health regulation practice at Arnold & Porter Kaye Scholer LLP , said the OMB and OPM probably aren’t even close to playing out fully the implications of a long-term attrition plan. “I think where they will probably end up is allowing continued hiring with user fee money, but not other areas.” Bragg agreed, adding, “eventually, using funds from user fees is probably where they’ll find the way to hire the kinds of people that the 21st Century Cures Act anticipates, which is really high quality doctors and the like.”

The user fees are paid by drug and device makers and help fund the FDA’s operations. The pharmaceutical industry and the FDA reached an agreement last summer for the next user fee agreement, which Congress must pass before the current agreement for prescription drugs expires this September.

Both the next user fee agreement and Cures addressed the types of personnel the FDA needs to hire, not just the number of new staff, McClellan said. The ability to validate early biomarkers, incorporate the patient voice and patient-based measures into an evaluation of a drug’s safety and effectiveness, as well as use real world evidence, will require “different kinds of people that are intended to change the skill set at the FDA,” McClellan said.

Other FDA Concerns

A spokesman for the Biotechnology Innovation Organization said his group couldn’t speculate on how the hiring freeze may impact Cures provisions. But the biotech trade group expressed concern the freeze may hinder the FDA’s ability to meet its commitments under the user fee agreements for drugs and biosimilars. The spokesman also said it’s “critical that the agency be able to attract and maintain a qualified workforce necessary to continue its mission of protecting and promoting the public health.”

Big Unknowns

Arnold & Porter’s Kracov also said the agency could change substantially depending upon whom Trump appoints as commissioner. “Right now they are talking to people who are way out there in terms of kind of a libertarian point of view,” he said. “There’s a fundamental misfit between the sort of libertarian view of the FDA and the Federal Food, Drug and Cosmetic Act. They don’t fit together very well. The question is, how does that all play out? I think that’s a big unknown.”

The Manhattan Institute’s Howard said once Trump’s administration has installed a health and human services secretary and an FDA commissioner, they would likely go back and review the hiring authority in Cures. Howard, who’s advocated for FDA reform and supports Cures, said the new hiring authority is one mechanism to “get the agency out of a risk-averse crouch in some of these areas.”

“It’s a very important part of the Cures bill, and I hope the commissioner when he or she comes in is going to communicate that need to the administration,” Howard said, adding he’s sensitive to and appreciative of the need to increase efficiency in the federal government. “In this particular area, this would enhance the FDA’s ability to help the U.S. innovate. And so I’d look at this as value-added.”

Califf told Bloomberg BNA, “I hope that when the dust settles people will see that a strong and smart FDA is great for patients, consumers and providers and really good for the American economy—the FDA approval is a global gold standard.”

To contact the reporter on this story: Jeannie Baumann in Washington at jbaumann@bna.com

To contact the editor responsible for this story: Randy Kubetin at RKubetin@bna.com

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