How a Government Shutdown Could Affect the Device Industry

If the federal government shuts down tonight (which is looking more and more likely) how will the device industry be affected?

As with every sector, one can debate the degree to which the government impacts device makers, but the feds do interact with industry in two key ways: as a regulatory authority via FDA and as a source of funding via the NIH.

Those who receive funding from NIH will not notice much of a difference, at least for a little while, according to the American Association for the Advancement of Science's ScienceLink blog. The NIH's intramural funding would be severely limited, and research done directly by the agency will be dramatically reduced. But extramural funding, which is what goes to researchers at universities and institutions outside of the NIH, would not be hampered in the immediate future. A representative from the Johns Hopkins University School of Medicine did tell Medpage Today, however, that the institution would not begin any new federally funded projects were a shutdown to take effect.

FDA (which does have the word "federal" in its name, after all), would see more immediate effects, with about 86% of its staff being furloughed, according to FOX Business, while "drug and device reviews and all public meetings" will be cancelled and inspections of device makers will "continue but would be slowed down." That can't be good news for an agency that many of you probably feel is slow enough when it's fully staffed and funded. 

Medicare would still be able to reimburse doctors and health care providers, according to Politico, at least for some time. However, according to FOX Business, 76% of CMS employees would be furloughed. The polarizing healthcare reform law would also continue to be funded under a shutdown.

Of course, this could all go out the window if, somehow, Republicans and Democrats are able to come to an agreement before the deadline (midnight in Washington), though judging by the tone of most news reports, this is not likely to happen. Then it's a matter of how long the shutdown continues and, ultimately, what sort of budget agreement is eventually reached. As has been discussed here before, NIH has floated in and out of danger, depending on which party is doing the cutting; FDA is also at risk of having funds cut. 

Where do you stand in this game of budgetary chicken? Are you concerned about the effects a shutdown might have on your business or do you feel confident that the private sector will be just fine?

— Thomas Blair