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US shutdown "hurting business"

But FDA decisions continue to trickle through

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As the US government shutdown enters its second week, there are already signs that business is starting to suffer, according to Commerce Secretary Penny Pritzker.

Speaking at the Asia-Pacific Economic Cooperation (APEC) at the weekend, Pritzker said companies are suffering not only from nervousness about the impact of the hiatus on the world economy, but also from being deprived of access to vital information provided by the commerce department.

Some companies who rely a lot on government contracts and oversight are already showing symptoms, with defense contractors Lockheed Martin and United Technologies furloughing 3,000 and 2,000 workers, respectively, in the wake of the shutdown.

Business leaders seem to be suggesting that the US economy can weather a short closure, but if it drags on there could be serious consequences. For example, Ford Motor Company's senior US economist Jenny Lin warned that a prolonged hiatus "would adversely affect directly government spending, confidence, business consumer confidence and financial markets."

The pharma sector looks likely to be insulated during the shutdown, at least in the short term, as most medicines are bought by the private sector in the US and the state-funded Medicare and Medicaid programmes are expected to continue "largely without disruption" while efforts to thrash out a budget deal continue, according to US officials.

The Affordable Care Act (ACA) - a key element of President Obama's healthcare reforms and the major sticking point in the budget negotiations - came into effect on October 1 as planned. The new health insurance exchanges open for business from last Tuesday to allow currently uninsured Americans - estimated at some 40 million people - to register and purchase policies for 2014.

FDA ticking over

Meanwhile, FDA activities related to user fees do seem to be trickling through as promised, although it is unclear whether these projects were largely completed ahead of the shutdown.

For example, Baxter has secured approval for its Clinolipid intravenous nutritional supplement on Friday, while Discovery Labs has been given a green light for updated specifications for its Surfaxin (lucinactant) that will allow it to launch the therapy for respiratory distress syndrome (RDS) in premature infants.

The FDA said last week that in addition to user fee-related activity it would focus only on emergency work involving the safety of human life or property, as well as criminal law enforcement activities. Moreover, the user-fee projects would only include those already paid for, and it will not be able to accept any additional fees during the hiatus.

This will mean that FDA will not be able to accept any regulatory submissions for fiscal year 2014 that require a fee payment and that are submitted during the lapse period," said the agency.

Updates are being posted relating to product recalls - with one involving Hospira's sterile injectables products announced on October 2 - and the warning letter page the regulator's website is being updated.

The FDA has also been updating its Twitter feed with key developments - though at nowhere near the frequency ahead of the shutdown - and the Federal Register is continuing to publish documents "necessary for the protection of life and property".

When will shutdown end?

As the second week gets underway there are no obvious signs of progress towards agreement on the fiscal budget - or indeed an extension to the US' debt limit that President Obama says is needed to avoid a national default later this month. Republicans and Democrats seem intent on blaming each other for the impasse.

House Speaker John Boehner said yesterday that the US may indeed default on its debt if President Obama does not start to negotiate with House Republicans on the debt ceiling, the Obamacare package of healthcare reforms and "how we begin to pay our bills".

Meanwhile, Democrats maintain that Boehner himself has the power to schedule a vote for a 'clean' funding resolution - without conditions - that could end the deadlock and get the federal government back to normal.

They also point out that Obamacare has been passed into law, upheld by the US Supreme Court and ratified by the re-election of Obama last year.

"There's only one way out of this reckless and damaging shutdown; pass a budget that funds our government with no partisan string attached," said the President in his address over the weekend.

"The American people don't get to demand ransom in exchange for doing their job, and neither does Congress," he added. "An economic shutdown that comes from default, with America not paying its bills, would be dramatically worse". 

Article by
Phil Taylor

7th October 2013

From: Sales, Regulatory, Healthcare



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