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Sanofi's Zerhouni, analysts warn sequestration could cripple R&D

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Elias Zerhouni, Sanofi's global R&D chief

Those howls you've been hearing about the looming threat of sequestration may soon be coming to an office near you. While much of the attention about the budget cuts mandated in absence of a deal between Democrats and Republicans has been focused on consumer items--like the threat of flight delays or the elimination of food inspections--the FDA as well as the NIH are looking at some painful cutbacks that could inflict long-term damage on the biopharma industry. And analysts as well as industry insiders say the cleaver could wind up dropping on the fingers of drug developers and researchers.

Avalere Health noted just days ago that the FDA is looking at a loss of $210 million at a time when the agency already says it's strapped for the cash needed to accomplish its mission. "An underfunded FDA could lead to FDA review clocks being reset or delayed, which would affect a sponsor's ability to obtain product approval--thus delaying patient access to cutting edge medical innovations," Avalere noted, according to The Hill.

Looking at a quick 5.3% cut at the NIH, former agency chief and now Sanofi research czar Elias Zerhouni told The Washington Post: "I think the suddenness of it and the depth of it would be a disaster for research, which is not an activity that you can turn on and off from year to year. It's an activity that takes time. The most impacted are the young, new investigator scientists, who are coming into science, and will now abandon the field of science. There will be a generational gap created."

In a column for Forbes, Scott Gottlieb, a former deputy commissioner at the FDA and now a resident scholar at the American Enterprise Institute, outlined how the FDA could absorb a big cut without inflicting damage on its core mission. But if the FDA has to cut back to 2010 levels, he adds, hundreds of jobs would have to be cut, with the axe falling most heavily on new hires brought in to improve the FDA's performance.

"All of this, of course, centers on FDA's ability to take an earnest look at its budget and take measures to try and blunt the blow of these cuts," Gottlieb wrote. "People close to the agency say that--until now--the White House has largely forbid the agency staff from making a realistic plan for how the sequester cuts could be mitigated. Now the FDA personnel are scrambling to put together sensible preparations."

The exact timeline on sequestration remains fuzzy. The Obama administration says it will begin March 1, Friday. Furlough notices could begin just days later. On March 27, the government would run out of money without a deal. And actual furloughs would start days later. Of course, past deadlines have come and gone with temporary patches put in place to kick the budget debate down the road. Whether both sides will remain frozen in opposition won't be certain until Thursday, in the 11th hour of the standoff.

- here's the story from the Washington Post
- see the report from The Hill

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