The President’s Final Budget Request for Health Care Programs

Yesterday, President Obama released the final budget proposal of his presidency. Total outlays in FY2017 would surpass $4 trillion under this budget, with spending on Medicare and Medicaid accounting for nearly a quarter—$984 billion. Discretionary funding for Health and Human Services (HHS) would total $82.2 billion, with the largest share—$30.3 billion—going to the National Institutes of Health (NIH). The Centers for Disease Control and Prevention (CDC) would receive $11.9 billion in mandatory and discretionary funding, amid concerns over preparedness to respond to public health emergencies and disease outbreaks. The Food and Drug Administration (FDA) would receive approximately $3.6 billion for their health care related activities.

While the funding levels in the president’s budget come in about as expected, there are some noteworthy policy proposals included. The president includes several proposals to “fix” the “high drug cost problem”. One such proposal is to require drug manufacturers to disclose their research and development costs, discounts, and other data as determined through regulation; effectively requiring them to make public proprietary business information to their competitors. Another proposal, which has been included—and criticized—in several past budgets, is to reduce the exclusivity period for biologics from 12 years to 7. These two requirements would significantly inhibit innovation in the marketplace.

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