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How Is the Government Shutdown Impacting Medtech?

FDA cannot accept new 2019 user fees during the government shutdown, which means the agency cannot accept new medical product applications.

FDA Commissioner Scott Gottlieb, MD, Tweeted this week about FDA staff who are currently working unpaid to perform mission-critical activities.

Image Credit: Scott Gottlieb, MD via Twitter screen capture

If you think medical device companies are not impacted by the U.S. federal shutdown, think again.

FDA commissioner Scott Gottlieb, MD, took to Twitter this week to highlight agency employees who are working unpaid to perform mission-critical activities. FDA cannot legally accept any new medical device or drug submissions until the government shutdown ends because the user fees that are collected with these submissions cannot be processed during the lapse period. The agency is able to support activities funded by carryover user fee balances from FY 2018, but medical device user fee programs only have about two months to three months left, and pharmaceutical user fee programs have less than that.

The agency said it is continuing vital activities that are considered critical to ensuring public health and safety in the United States. These activities include: maintaining core functions to handle and respond to emergencies; supporting high-risk food and medical product recalls; pursuing civil investigations when public health is believed to be imminently at risk and pursuing criminal investigations; screening food and medical products imported to the country; and surveillance for significant safety concerns with medical devices and other medical products.

"You’re valued each day," Gottlieb Tweeted to FDA staff. "But it’s even more the case that in moments of challenge, when some of our work stops, that your critical role becomes so obvious. FDA can’t achieve its full mission without each of you; whether you’re exempt, excepted, or on furlough. We’re one FDA."

"Thank you for your understanding and support," replied a Twitter user with the handle Larry Stringer. "I’m stuck at home, furloughed and reading your tweets. I can’t even look at e-mail to see what I’m missing. I want to come back to work. I love my job and believe in our public health mission."

Gottlieb warned that because of the shutdown are not getting done. "It is not business as usual at FDA," he wrote.

Financing agreements are another way some medical device companies may be feeling the sting of the government shutdown. Israel-based Itamar Medical, for example, announced a private placement this week worth $11.5 million. While a portion of that financing is coming from Israel-based investors, most of the funds are coming from U.S. investors. That means the timing of the U.S. closing is uncertain due to the government shutdown, the company noted.

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