The Trump Transition: How could Trump’s DOGE affect the FDA?

Updated Nov 26, 2024 9:31 AM EST

A new effort announced on Nov. 12 by President-elect DONALD TRUMP is intended to make America’s federal bureaucracy leaner and more efficient. While the effort – known as the Department of Government Efficiency, or DOGE – isn’t focused on FDA, it could have a significant impact on the agency’s resources, and its co-leaders both have strong negative opinions of FDA’s regulatory review process.

The basics of DOGE

The Department of Government Efficiency (DOGE) planned for the next term of President-elect DONALD TRUMP aims to “dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal agencies,” the President-elect wrote in a statement on the social media platform X (formerly Twitter). While DOGE will not be an official government department or agency – it is more like a blue-ribbon commission – it is set to work closely with Trump’s Office of Management and Budget (OMB), which acts as the regulator of regulatory agencies in the federal government. Trump’s expectations for DOGE are high. “It will become, potentially, ‘The Manhattan project’ of our time,” he wrote.

DOGE is set to be co-led by billionaire technology entrepreneur ELON MUSK and former pharmaceutical executive and Presidential candidate VIVEK RAMASWAMY, who notably both have no prior government employment. However, both have interacted closely with the FDA, thereby raising the chances that proposed reforms could affect the agency. DOGE is also in the process of onboarding “small-government revolutionaries” who would be unpaid volunteers on the effort expected to work “80+ hours per week on unglamorous cost-cutting.”

While the specific goals of DOGE are still under development, there are some reported signs of its ambition. Musk told a Trump campaign rally that he believed he could find $2 trillion in cuts, although it wasn’t clear if that target would be in a single year or over a longer timeline. Since then, Ramaswamy and Musk have indicated they may be narrowing in on $516 billion in appropriated spending that was never reauthorized by the relevant Congressional committees.

Ramaswamy and Musk recently authored an op-ed in the Wall Street Journal detailing the scope of what they intend to focus on. There are three main focus areas, according to the duo: “regulatory rescissions, administrative reductions and cost savings.” They wrote that they intend to take most actions by executive action, rather than by passing new laws, and also plan to take advantage of two recent landmark cases decided by the Supreme Court during the Biden administration: West Virginia v. EPA, and Loper Bright v. Raimondo. The first of these cases, decided in 2022, found that the Environmental Protection Agency had exceeded its legal authority to regulate based on the court’s reading of the explicit, rather than implicit, authorities granted to it by Congress. The latter case, decided in 2024, explicitly overturned precedent established in 1984 by the Supreme Court in its Chevron v. Natural Resources Defense Council opinion, which held that courts should largely defer to the expertise of government bureaucrats and their interpretation of statute – the so-called “Chevron deference.” Of the two newer cases, Musk and Ramaswamy wrote, “Together, these cases suggest that a plethora of current federal regulations exceed the authority Congress has granted under the law.”

The ultimate goal is for DOGE to work with legal staff embedded at regulatory agencies to identify regulations that allegedly violate those two Supreme Court standards, and then present those regulations to then-President Trump to “immediately pause the enforcement of those regulations and initiate the process for review and rescission.”

FDA may have a target on its back:

While DOGE is set to explore potential efficiencies across the entire government, the FDA may find itself under particular scrutiny as a result of Musk and Ramaswamy’s prior, negative experiences with the agency’s regulatory processes. For example, FDA initially rejected bids by Musk’s Neuralink, a medical device company developing a brain-computer interface, to begin testing in humans. The agency’s concerns reportedly delayed development by at least a year. Neuralink was also the recipient of a Form 483 inspection report in June 2023 that detailed problems at his Fremont, CA facility. These included documentation and procedural issues with its animal care program. In addition, Ramaswamy’s firm Enzyvant received a Complete Response Letter issued by the FDA in December 2019, effectively quashing its bid for a new biologics license for its regenerative tissue therapy. Following a resubmission, the agency eventually approved the product, marketed as Rethymic, in October 2021.

Unsurprisingly, both Musk and Ramaswamy have recently targeted criticism at the FDA. For example:

• In a Nov. 14 post on the social media platform X (formerly Twitter), Ramaswamy wrote: “My #1 issue with FDA is that it erects unnecessary barriers to innovation (e.g. two replicate phase 3 studies instead of one, refusal to accept valid clinical results from other nations, etc.). This stops patients from accessing promising therapies & raises prescription drug costs by impeding competition. The agency’s staff have callous disregard for the impact of their daily decisions on the cost of developing new therapies, which inevitably gets passed on to the healthcare system. *That’s* the actual problem with FDA & it’s the one we should be talking more about.”
• Then, in a Nov. 18 post on X, Ramaswamy wrote: “The top problem with FDA is the agency’s reckless disregard for the impact of its daily decisions on the cost of new innovation. FDA’s day-to-day decisions include not just the final drug approval decisions that grab headlines, but their micromanagement of every single step of the clinical & even preclinical drug development process. This increases overall healthcare costs by raising the cost barriers to competition, which in turn advantages big pharma over smaller biotechs that face a higher cost of capital to fund their projects. That’s the *real* FDA issue we need to be talking much more about, even if it takes some level of nuance to understand.”
• Ramaswamy previously wrote on X that “Countless FDA regulations and actions are hypocritical, harmful & unconstitutional.” The July 2023 post continues: “I will rescind them accordingly, using the Supreme Court’s holding in West Virginia vs. EPA as my legal basis for doing so.”
• In December 2023, Ramaswamy wrote on X that the next FDA commissioner needs to be “ready to fire 75% of its staff,” going on to write that he was “not at all convinced the FDA’s existence is even necessary.”
• In a podcast recorded in August 2024 focused on the FDA, Ramaswamy spoke with BALAJI SRINIVASAN about strategies for dismantling the FDA. Ramaswamy pointed specifically to the costs associated with lengthy FDA review periods, and said it resulted in FDA having blood on its hands.
• Musk told a campaign crowd that “There are actually a huge number of drugs that are stuck in approval at the FDA that can help people. And they’re just stuck in bureaucratic molasses. […] If we could just be faster about getting amazing drugs through the system, a lot more people would be alive. Overregulation kills people, where you’ve got helpful drugs stuck in approvals and could be helping people, but they’re not. That’s crazy. Simply expediting drug approval at the FDA, I think, will save millions of lives.” However, it’s worth noting that the drug Musk used to illustrate his point, Welireg, had actually been approved by FDA several years prior.

As DOGE begins to take shape, early indications are that it could have significant impacts on the way FDA regulates.

Impact on FDA: As noted above, DOGE appears to be taking a look at money that Congress has appropriated, but not authorized. Ordinarily, legislators are supposed to authorize legislation to appropriate funds for a specified amount of time, and then Congressional appropriators may provide the specified funding to those programs for that duration, subject to availability of revenue and other considerations. Rules generally restrict lawmakers from appropriating funding if there has not been a proper authorization, according to a Congressional Research Service (CRS) report. But that same CRS report indicates that the practice of appropriating without authorizations is widespread. There were at least 1,264 authorizations that expired before the beginning of FY 2024 associated with $516 billion in appropriations. And one of those appropriations stands out in terms of its size: The 21^st Century Cures Act, with $48.2 billion in FY 2024 appropriations and no authorization. The FDA has considerable exposure to the law, which originally authorized funding for FDA innovation projects, special hiring authority, and more. If that funding is cut, or potentially “impounded” by the President, that could have significant implications for FDA’s existing grantmaking.

Remote work: DOGE has indicated that government employees should not be permitted to work remotely. “Requiring federal employees to come to the office five days a week would result in a wave of voluntary terminations that we welcome: If federal employees don’t want to show up, American taxpayers shouldn’t pay them for the Covid-era privilege of staying home,” Musk and Ramaswamy wrote in their recent Wall Street Journal opinion piece. While FDA’s headquarters is in the Washington, D.C. suburb of Silver Spring, Md., the agency employs many remote staff through its “ Business-Driven Hybrid Workplace model.” One of FDA’s primary challenges is finding staff who have sufficient expertise to do the agency’s work and are also willing to work for government wages (which tend to be lower than those in the private sector). Since there is a finite supply of those staff in the Washington, D.C. metropolitan region, the agency has in some cases needed to hire remote staff – especially for highly specialized roles. While not all FDA positions are eligible to be remote – some are deemed “non-portable” because they must be performed at agency facilities – those that can be completed “without the need for access to specialized equipment” are.

Government employees: Musk and Ramaswamy have said they are targeting “mass head-count reductions across the federal bureaucracy.” DOGE aims to identify the “minimum number of employees required at an agency for it to perform its constitutionally permissible and statutorily mandated functions.” In addition, staff reductions would be generally proportionate with the number of regulations targeted for elimination, and agencies would be expected to “produce fewer regulations” as well, likely affecting regulatory policy staff. Ramaswamy has also indicated that “entire agencies [will] be deleted,” although it’s not clear which ones might be considered for elimination. (It’s worth noting that the DOGE effort appears to be taking at least some inspiration from JAVIER MILEI, the President of Argentina, who recently undertook similar sweeping reforms using a “chainsaw approach.”)

Specific regulations: As noted above, Ramaswamy has indicated that be believes certain FDA regulations are inappropriate. For example, he indicated that FDA requiring “two replicate phase 3 studies instead of one” and its “refusal to accept valid clinical results from other nations” are serving as barriers to innovation and competition, and therefore raising costs for patients. As such, the DOGE initiative might recommend changes to FDA regulations. However, it’s worth noting that both of these specific allegations against the FDA are incorrect – at least as they were phrased in his post. FDA has been able to accept evidence from a single Phase III clinical trial since the 1997 passage of the FDA Modernization Act and now the majority of all new drugs approved are based on evidence from a single pivotal trial, and FDA has long accepted clinical trial data from outside of the U.S., and its current practice for certain product types is to actively encourage multiregional clinical trials – as long as those trials help “ facilitate FDA’s assessment of applicability of the data to the U.S. population.”

Life sciences industry stakeholders should pay close attention to Musk and Ramaswamy’s social media posts, which have already touched upon the topic of research and development costs. Ramaswamy, for example, has said that DOGE considers healthcare a “critical frontier” to address, and that “innovation is a key part of the solution (not the problem).” He has also accused other countries of effectively free-riding on U.S. investments in developing health technologies, and said they need to “start sharing the burden” – a point which Musk agreed with.

The chief concern for the FDA is that it could come under enhanced scrutiny by Musk and Ramaswamy, who might take steps to effect budget cuts and curb the agency’s authority to regulate certain medical products. Regulators and the life sciences industry alike may find themselves scrambling to identify which regulations and associated programs will be targeted.

The work ahead for DOGE is considerable, and there are some obvious roadblocks

Of course, regulations and bureaucracy are often responses to specific problems, and often regulations are required by statute. A phrase we’ve heard throughout our career is that each FDA regulation is “written in blood,” meaning they are almost always written to address a problem that resulted in the death of at least one patient – and often many more than that. And while the FDA does create some of its own regulations without direction from Congress (the recent final rule on laboratory-developed tests is a good example), in many other cases federal law directs FDA to promulgate specific regulations within specific timeframes. It would be difficult to overturn these regulations without modifying federal statutes.

Not all deregulation is likely to be welcomed by industry, either. Some regulations also have their ardent industry defenders. An open secret in the regulatory world is that some companies even like regulation, as it raises the bar for competition to their products. For example, regulations requiring extensive testing make product development more difficult, but also confer benefit to industry by increasing its reputation for safety and quality. And changes to regulation (even by deregulation) can be challenging for companies to understand and implement, since new standard operating procedures, documentation, technological systems and strategies must be developed and implemented. For companies that have understood how to excel under the status quo and have already invested heavily in the systems that let them do so, the costs of change may be unwelcome.

The process of rolling back regulations is also highly complex, since many regulations reference and build upon existing regulations. When renovating a house, removing key components – like load-bearing walls – can compromise the larger structure; so it also is with regulations, where removing one regulatory pathway could alter, or even cripple, another one. There are lessons to be learned in some recent legislation, like the FDA Modernization Act 2.0, which passed in December 2022 as part of the annual appropriations legislation and directed FDA to remove requirements that all drugs be studied in animals as part of nonclinical testing. Nearly two years later, and FDA has still not modified those regulations, and efforts by The Humane Society to assist FDA demonstrate the significant scope of the work needed to make just one mandatory requirement voluntary. More than 30 regulatory citations would need to be updated, according to a petition from the group.

How DOGE might leverage “impoundments”: Neither the executive branch nor DOGE – not itself a government agency – can cut the budget unilaterally, since only Congress can propose that. However, Trump has previously said he plans to use a tactic called budget “ impoundment” to sharply limit spending. Impoundment happens when a president decides not to spend funding that has been appropriated by Congress to a specific government agency or program. Trump has said he will order federal agencies to impound funds “on day one” of his presidency to achieve savings, and that he will challenge legal limits on this practice that were passed as part of the Congressional Budget and Impoundment Control Act of 1974, which he contends is unconstitutional. [ Read AgencyIQ’s analysis of impoundments here.]

To read other articles in our Trump Transition series, please see our Table of Contents piece here.