Breakthroughs Blog: US budget

Earlier this week, both the House and Senate passed a budget package to fund the government through the remainder of fiscal year (FY) 2013, thereby averting a government shutdown when current funding expires on March 27. The new compromise funds most accounts roughly at FY2012 levels, with an across the board cut of 0.092 percent. As a reference, the Centers for Disease Control and Prevention's Center for Global Health budget was $349 million in FY2012, while the National Institutes of Health was funded at $30.69 billion. In addition, global health programs at the State Department and US Agency for International Development (USAID) were funded at $8.167 billion. The budget package also makes some key changes to certain programs. For instance, global health programs at the State Department and at USAID, including those that fund global health research and development (R&D) initiatives, are increased over FY2012 levels by roughly 5 percent—potentially to counteract the effects of sequestration. The bill also gives greater flexibility to the Department of Defense to manage sequester cuts to its budget. It also leaves the sequester largely in place, instead of replacing it with balanced budget cuts, as many advocates in the global health community were hoping lawmakers would do. The bill now goes to President Obama’s desk, and he is expected to sign it. Budget negotiations in Congress will have far-reaching effects on global health R&D efforts at agencies such as CDC, DoD, NIH, and USAID. Photo credit: PATH/Evelyn Hockstein. If and when Obama signs the final FY2013 budget package into law, the funding levels will still be subject to sequestration—meaning that the final levels are really anywhere from 5 percent to 9 percent lower. For instance, USAID’s global health programs would see an overall cut of $193 million. While this is better than the $428 million cut it was facing before the Senate stepped in, it could still have a large impact on global health and R&D programs that fall under USAID. The House also passed its version of an FY 2014 budget resolution, which would replace sequestration with budget caps for the next decade. The House resolution would move most of the budget cuts away from the Department of Defense and onto non-defense accounts, including most global health R&D programs, and would balance the budget over the long term. The Senate has introduced its own budget resolution, which could pass today or tomorrow. The Senate version is very different from the House version, as it would make balanced cuts to both defense and non-defense programs and protect non-defense programs from the drastic cuts seen in the House budget. The Senate version does not include a plan to balance the budget in the short- or long-term, but contains a significant reduction in spending over the next decade. Although replacing sequestration with an actual budget plan is widely approved of, advocates for both domestic and global health programs believe that the House budget resolution would be devastating for key health and humanitarian programs. Therefore, as Congress makes decisions on FY2014 spending bills, lawmakers should use a balanced approach when allocating budget cuts (as seen in the Senate version), and increase support for global health and R&D when possible. Additionally, as agencies receive their final FY2013 budgets, they should ensure that global health and R&D programs are protected.

Earlier this week, the GHTC and other global health and international development advocates called on the House Appropriations State and Foreign Operations subcommittee to fully fund key programs in the foreign affairs budget. Advocates presented testimony regarding the fiscal year (FY) 2014 budget for State and Foreign Operations, which includes funding for the US Agency for International Development (USAID) and many other global health and research programs. Subcommittee Chair Rep. Kay Granger (R-TX) and Ranking Member Rep. Nita Lowey (D-NY) ran the proceedings, and Reps. Barbara Lee (D-CA) and Henry Cuellar (D-TX) also attended. Granger and Lowey kicked off the hearing with statements in support of continued US leadership in global health and foreign aid programs. Lowey stated that she is “proud of the progress that US government funding has made against diseases like tuberculosis, malaria and HIV and AIDS.” Global health research and development (R&D) efforts funded by agencies like USAID play an inextricable role in this progress, through innovations such as new HIV drugs, tuberculosis (TB) diagnostics, and advanced insecticides to bolster the use of mosquito nets to prevent malaria. Rep. Kay Granger (R-TX) (right) and Rep. Nita Lowey (D-NY) (left) ran the hearing, which focused on the FY 2014 budget for USAID. Photo credit: PATH. The GHTC and many of its members were invited to testify at the hearing, and spoke about the value of global health research in terms of saving lives, improving health outcomes, furthering American innovation, and increasing cost-savings in public health over the long term. According to the GHTC’s written testimony, every day “more than 35,000 people die from AIDS, TB, malaria, and other neglected diseases around the world. … These issues highlight the urgent need for sustained investment in global health research to deliver new tools to combat these devastating diseases.” Fortunately, previous “US investment in global health R&D has generated great success in treating devastating diseases and improving the lives of millions through new technologies.” And there are “several very promising technology candidates in the R&D pipeline; however, these tools will never be available if the support needed to continue R&D is not supported and sustained.” Other GHTC members stressed the importance of sustained support from USAID and other US agencies for global health research initiatives. For example: Jennifer Katz, policy director for the North America office of the Drugs for Neglected Diseases initiative (DNDi), highlighted the need for USAID to expand its neglected tropical disease (NTD) program to include research and product development through the story of William, a boy stricken with sleeping sickness in Uganda a few years ago. William was treated with the only medicine available at the time—an arsenic-based drug called melarsoprol. Michael died not from sleeping sickness but from the side effects of the toxic medication. Katz then explained that if William were treated today, he would receive a non-toxic and effective drug developed by DNDi. Katz stressed that support from USAID to develop new and improved NTD treatments would mean that more lives could be saved worldwide. International AIDS Vaccine Initiative (IAVI) CEO Margaret McGlynn described how even a 70 percent efficacious HIV vaccine distributed to 40 percent of the population in low- and middle-income countries would avert 8.9 million new infectious over 10 years. This impact would be a groundbreaking step forward in public health. USAID is a leading funder of IAVI’s efforts to develop a safe and effective HIV and AIDS vaccine, and McGlynn emphasized that Congress should continue to support USAID’s HIV vaccine research programs so this research can continue. Sabin Global Network for Neglected Tropical Diseases Managing Director Dr. Neeraj Mistry described the success that USAID’s NTD control program has had in delivering more than 587 million treatments and training hundreds of thousands of community health workers. Mistry also noted that USAID should increase its support for NTD research and product development efforts. Indeed, USAID can repeat its success in delivering existing treatments by also funding NTD research and product development, as new and improved drugs and other tools are desperately needed. PATH’s Senior Director of Policy and Advocacy Rachel Wilson described how a New Jersey company, in partnership with PATH and USAID, developed and produced a vaccine vial monitor that is now used to ensure the quality of every vaccine that UNICEF and other global agencies deliver worldwide. This is just one example of the economic benefit global health research holds for the United States. For example, 64 cents of every dollar invested in global health R&D goes directly to US researchers, many of which conduct research with domestic universities and academic centers—thereby providing jobs and jumpstarting new economic activity. Other global health community members such as the Non-Communicable Disease Roundtable, Bread for the World, and the GAVI Alliance also testified in support of global health and development programs. Witnesses at the hearing strongly demonstrated that even in this extremely challenging fiscal climate, when difficult decisions must be made in the face of budget cuts, is it essential that Congress prioritize effective programs that save lives at home and abroad. Global health research and product development programs at USAID save millions of lives, spur economic activity in the United States, and save money in the long run. These programs must be protected, and the US leadership in this area must not falter. To achieve this goal, Congress must ensure that global health research programs at USAID and across the government are robustly funded in FY 2014.

Although we’re several days into sequestration, details about the full impact of funding cuts are still hazy. On Friday, the Office of Management and Budget (OMB) released a report to Congress, which details funding cuts required to offset $85 billion in the fiscal year (FY) 2013 budget. In order to reach this goal, the OMB report indicates that global health research and development (R&D) programs will be subjected to cuts of either 5 percent or 7.8 percent. But because the cuts must take place over a seven month period (instead of a full year) to fit within the fiscal year, OMB calculates that these cuts could actually be at a rate of 9 percent and 13 percent with the remaining funding for this year. OMB’s report provides some specific details on how the cuts are calculated. It also provides illustrative examples of what the sequestration cuts might look like if applied equally within federal agency budgets. However, because agency heads will have discretion over how specific cuts affect their agencies, the exact implications of sequestration will be determined in the coming weeks. Estimates are emerging regarding the widespread impact of sequestration on the agencies that support global health R&D. Photo credit: PATH While waiting for these details to come out, we are starting to see some estimates emerge regarding the impact of sequestration on the agencies that support global health R&D. For example: The National Institutes of Health’s discretionary budget will be reduced from $30,899,000 to $29,321,000 for FY13, a cut of over $1.5 billion. The sequester would equate to a $2.6 billion reduction to the State Department and US Agency for International Development (USAID) FY13 budget, translating to a $1.7 billion cut to foreign assistance programs. In particular, sequestration will cut over $400 million from global health initiatives at the State Department and USAID, including R&D initiatives. Global health programs at the Centers for Disease Control and Prevention are likely to be reduced by taking 5 percent from HIV and AIDS initiatives and then taking 5 percent from the remainder of the account. Discretionary spending for the Department of Defense (DoD) is subject to a 7.8 percent reduction, which would include any global health R&D initiatives embedded in DoD programs. Some reports indicate that the US Food and Drug Administration will lose about 9 percent of its budget for FY13. The Obama Administration is urging Congress to allow the agency to spend $41 billion-worth of user fees. In the meantime, the government is currently running on a Continuing Resolution, which expires on March 27. Congressional leaders and President Obama have expressed hopes about successfully negotiating a new spending bill by March 27, in order to avoid a government shut-down. These negotiations may also provide an opportunity to reverse the sequester, before the full impact of the cuts are felt across the government. The President’s budget request for FY14 is also on the horizon, with reports indicating that it might be released on March 25. The House and Senate will begin to take up FY14 budget resolutions, which each Chamber must pass by April 15. It’s becoming increasingly clear that sequestration is the wrong way to reduce the nation’s debt, especially when the impact would set back innovation and devastate global public health. Policymakers should use the upcoming budget negotiations as an opportunity to reverse sequestration and develop a long-term budget solution that protects and—where possible—increases funding for global health product development. Slashing funding will interrupt scientific progress and leave us without the urgent tools we need to address health needs now and in the future.

  “I’d be careful not to break something that would be hard to put back together,” Alan Magill—director of Malaria at the Bill & Melinda Gates Foundation—said this week at the GHTC’s annual congressional briefing. Sequestration, just days away, was a primary concern for Magill and others at the event, which focused on how US policymakers can protect the nation’s investments in global health research in upcoming budget discussions. As Magill and others stressed, sequestration and federal budget cuts would severely hamper research taking place across the US government to develop new vaccines, drugs, and other tools for global public health. According to moderator Lisa Cohen, executive director of the Washington Global Health Alliance, more than 350 health innovations are in the research pipeline. She added that 200 of these are supported by the US government through agencies such as the Centers for Disease Control and Prevention (CDC), the Department of Defense (DoD), the US Food and Drug Administration (FDA), the National Institutes of Health (NIH), and the US Agency for International Development (USAID). (from right to left) Lee Hall from the National Institute of Allergy and Infectious Diseases, Caroline Ryan from the President's Emergency Plan for AIDS Relief, and Alan Magill from the Bill & Melinda Gates Foundation. Photo credit: PATH. Widespread budget cuts would stop scientific progress in its tracks—progress that cannot be seamlessly picked up again if funding were to resume in the future. “Many biomedical studies cannot survive cuts in funding in the middle of their work. It would be an irreversible mistake to halt these ongoing global health research efforts,” Cohen said, adding, “Halting funding would mean that the world may never benefit from these tools that are so close to development and delivery.” As the panelists stressed, there are several compelling humanitarian reasons to protect US investments in global health research. “Scientific advancements have brought us to a tipping point in the fight against HIV and AIDS,” Caroline Ryan, deputy coordinator for Technical Leadership at the President’s Emergency Plan for AIDS Relief (PEPFAR) said. She added that “science has set us on a new path—a path to achieving an HIV-free generation.” Lee Hall, chief of the Parasitology and International Programs Branch at the National Institute of Allergy and Infectious Diseases, said that the NIH is supporting research for an array of new, lifesaving health tools—including drugs, diagnostics, and vaccines for malaria, Chagas disease, and tuberculosis. “We’re standing at a very promising moment,” Hall said. “Looking at what’s on the horizon, it’s clear that a lot will come out of our support for global health research. We need new tools if we are to realize the benefits of US support for global health.” Speakers also emphasized that there are countless domestic benefits that come with US investments in global health research. “We live in a globalized world, whether we like it or not,” Magill said. “This presents us with the choice to exert America’s leadership role and shape the world how we’d like to see it—or let someone else do it for us.” Magill added that with the ease and speed of airline travel, “what’s happening in the middle of Africa today could be happening at Dulles tomorrow.” Hall also highlighted that many areas in the United States are vulnerable to tropical infections, and that diseases like Chagas are appearing throughout some Southwestern states. Lee Hall (left) and Alan Magill (right) at the GHTC's annual congressional briefing. Throughout the event, all three panelists underscored the importance of partnerships to advancing research and science for new health tools. According to Ryan, PEPFAR “gets more bang for our buck” by working in partnerships with other US agencies, such as the NIH and FDA, as well as philanthropic groups like the Gates Foundation. As an example, Ryan cited that PEPFAR and USAID are supporting the development of microbicides with a research infrastructure established by the NIH. Hall also cited NIH’s numerous partnerships with US academic institutions, nonprofit groups, and other federal agencies like the CDC and DoD. Magill stressed that from the Gates Foundation’s perspective, the US government is a critical partner in global health. “The Bill & Melinda Gates Foundation can only provide a small fraction of what the US can bring to the table,” he said, adding that investments in global health research should not only be seen as humanitarian aid—they are investments in science that provide “a lot bang for a little buck. We should save programs that are investments in the future.”