[UPDATE] FDA's 2025 Budget Proposal Includes Largest Reorganization in Agency History

pharmaceutical bottle medicine production line conveyer
The budget proposal included more than $12 million to tackle supply chain issues across all product areas, including cosmetics and medical products.
Kadmy - stock.adobe.com

A major agency-wide reorganization of the FDA's budget affecting cosmetics, regulatory affairs and medical products, among other elements, was recently proposed by Commissioner Robert M. Califf, M.D. to the Subcommittee of Agriculture, Rural Development, Food and Drug Administration and Related Agencies.

FDA’s FY 2025 budget proposal included more than $12 million to tackle supply chain issues across all product areas, which Califf labeled the FDA’s largest reorganization in its history and will impact nearly half of the agency’s 18,000 employees.

Related: FDA Cracks Down on Ozempic Knockoffs

In the subcommittee meeting, Dr. Califf highlighted the agency’s priority of aggressively tackling drug and device shortages while acknowledging factors beyond its control, including manufacturing issues and delays, market failures and discontinuations. He is seeking $12.3 million to enhance the FDA’s capabilities in making supply chains more resilient, increase regulatory oversight and mitigate shortages of critical medical and food products.

Califf proposed a roadmap for actions the agencies will take, individually and collaboratively, to improve regulatory clarity, streamline regulatory oversight, reduce regulatory redundancies and gaps and increase regulatory coordination for specific product categories and across the Coordinated Framework.

The proposal references the 21st Century Cures Act (Cures Act), a law that was enacted to accelerate medical product development and bring new innovations and advances to patients. The Cures Act authorized $500 million over nine years to help FDA cover the cost of implementing the law. FDA requests an increase of $5 million for 21st Century Cures to reflect the last authorized level for Cures in FY 2025, for a total of $55 million. 

Senate Response     

U.S. Senator Patty Murray (D-WA), chair of the Senate Committee on Health, Education, Labor and Pensions (HELP), addressed the proposal, relaying the Senate’s passage of key Food and Drug Administration (FDA) reforms she negotiated in 2024 and pushed to pass as part of the Fiscal Year 2023 Omnibus Appropriations bill.

Murray noted that the final FY24 funding bill included $7 million for the implementation of the Modernization of Cosmetics Regulation Act of 2022, which she negotiated and got signed into law as HELP Chair.

“That bill, for the first time, provided much-needed new authority to FDA to make sure that families know that the products we put on our bodies every day are safe,” Murray said.

Murray asked Dr. Califf what steps the agency has taken over the last year to implement those new authorities and what resources FDA is requesting in their budget for this year.

Califf said, “Progress we’ve made really exceeded what we had planned—that is, for the first year—which is that we now have the listing, so there’s a place for the cosmetics companies to list that they’re on the market and what’s in them, and there’s also an adverse reporting system for the first time… This is done on a shoestring and in the budget, we have an eight million dollar ask to really instantiate this office and get to the next level. As you also know, there are several cosmetics that are very worrisome in terms of health, where we have to do a lot of work in order to take the kind of actions that are needed to protect health, and we need a budget to make sure those things can be done.”

UPDATE: FDA 2025 Reorganization & Budget Proposal Approved 

The approval of the FDA's 2025 budget proposal was just announced May 30, 2024, with the formal notice of the full list of changes to be published on the Federal Register notice Monday, June 3, 2024. The implementation of this major reorganization involving "modernization efforts for establishing a unified human foods program, new model for field operations and more" is currently planned for October 1, 2024. 

According to the FDA's announcement, "After undergoing a formal external review process required for all federal reorganizations, the FDA received approval of the reorganization package in May 2024. The reorganization is considered final, and the FDA is planning to implement the reorganization on October 1, 2024. 

The changes in the reorganization will allow the agency to:

  • More effectively realize the preventive vision laid out in the FDA Food Safety Modernization Act. 
  • Elevate the importance of nutrition to help reduce diet-related diseases.
  • Strengthen state partnerships and embrace innovative food and agricultural technologies that will position the agency to more effectively regulate and uphold safety of the nation’s food supply. 

The FDA also has changes that will impact other products we regulate, such as medical products and cosmetics, by creating an enterprise-wide structure that will enhance collaboration between its field investigators and subject matter experts throughout the entire agency. The reorganization includes additional improvements to modernize and strengthen the entire agency to work more cohesively and collaboratively together to accomplish its public health mission."

Additionally, this FDA reorganization and modernization efforts, per the FDA's spokesperson, "complies with the recently enacted Food and Drug Omnibus Reform Act of 2022 which mandates the establishment of the Office of Critical Foods, and the Modernization of Cosmetics Regulation Act of 2022 to ensure the safety of cosmetics products."

"This is a distinctive moment for the FDA. I'm very pleased to see that after a year and a half of arduous work and effort put into this transformative vision for the FDA Human Foods Program and the architecture of the agency, we are a step closer to seeing the largest reorganization of the agency in recent history come to life this fall," said FDA Commissioner Robert M. Califf, M.D. "This reorganization has been a major undertaking for the FDA, and I am proud of what we will be able to accomplish more efficiently and collaboratively to better meet our public health mandate." 

More in News