How the Shutdown is Affecting the FDA

Another shutdown leaves the FDA balancing public health responsibilities against frozen funding. Here’s what continues, what stops, and what it means for sponsors and regulators.

In case your time is short, here’s the topline: The current government shutdown has left the FDA operating in partial capacity—continuing only its most vital public-health and safety functions while halting any submissions that require user-fee payments. Roughly 86% of the agency’s workforce remains on duty, supported by carryover user-fee funds and life-safety exemptions, but guidance development, administrative work, and new reviews are paused.

As of October 1, a lapse in appropriations has forced much of the federal government into shutdown.

For the FDA, it hits at a critical moment: the start of a new fiscal year and FY 2026 user-fee cycle. Because Congress failed to pass either a full-year appropriations bill or even a short-term Continuing Resolution, the FDA now lacks the legal authority to collect or spend new user-fee revenue. That means the agency cannot accept any submission that requires a fee until funding is restored—a freeze that could ripple through the drug, biologics, and device sectors if it continues.

The backdrop to this crisis is an increasingly contentious political impasse in Congress. Senate Democrats refused to advance a temporary spending package that excluded an extension of Affordable Care Act subsidies and the reversal of recent Medicaid cuts, prompting a shutdown that began October 1. The FDA homepage now carries a notice blaming the “Democrat-led government shutdown,” while an HHS-wide email reviewed by RAPS Focus repeated similar language—an unusual politicization of a typically nonpartisan agency.

FDA.gov

Even brief interruptions in funding can delay approvals, stall inspections, and reduce oversight during critical manufacturing or safety issues. Still, as several experts note, the FDA is better positioned today than it was in past shutdowns to maintain its core public health functions.

Its evolving budget structure, now nearly half funded by user-fee programs, has insulated it from some of the paralysis facing other agencies. Yet that structure also creates a paradox: without appropriations authority, the very funding mechanism that keeps the FDA running becomes inaccessible.

The immediate impact

As Joanne S. Eglovitch reports in RAPS, the FDA has announced it will not accept any regulatory submissions that require a user-fee payment until Congress enacts a new appropriation or Continuing Resolution.

In a public statement, the agency said it will continue only “vital and mission-critical activities”—those necessary to protect human life and property. Those activities include:

• Responding to public-health emergencies such as outbreaks or high-risk recalls.

• Maintaining surveillance of high-risk medical devices and products.

• Screening imported food and drugs to prevent unsafe products from reaching U.S. consumers.

• Pursuing civil and criminal investigations related to imminent threats to health.

The FDA’s contingency plan shows that 13,872 employees (about 86% of its workforce will be retained, while 14% are furloughed. Most retained staff are either exempt (funded by carry-over user fees) or excepted (engaged in protecting life or property).

By comparison, HHS as a whole expects to furlough over 32,000 employees.

What continues (and what doesn’t)

Despite that high retention rate at FDA, the shutdown still limits important work. Guidance development, data analysis, and many administrative functions are paused. Even where teams remain staffed, missing colleagues in adjacent offices will create delays.

While existing carry-over user-fee funds allow FDA to continue some review work temporarily, no new FY 2026 user fees can be accepted—meaning sponsors that planned submissions after October 1 must now wait. Depending on the shutdown’s length, this backlog could compound once appropriations are restored.

Insight from FDA Matters

In his September 30 column, Steven Grossman, an FDA regulatory consultant and publisher of the FDA Matters blog, provided some helpful perspective on what this means in practice.

“With most of its employees retained, the FDA will be less affected than almost any other federal agency that doesn’t provide clinical services (VA, NIH Clinical Center, Indian Health Service),” Grossman wrote.

He emphasizes that “less affected” is not “unaffected.” The furloughed fraction of FDA employees is concentrated in non-user-fee functions—routine food inspections, guidance drafting, database maintenance, web operations, and financial management (including the personnel responsible for accepting or disbursing funds). Even among retained groups, those missing administrative or technical counterparts will feel the slowdown.

He notes that in 2012–2013, the FDA retained far fewer employees during a shutdown. Over the past decade, successive commissioners have successfully positioned the agency as essential to public health and safety, making sure that more of its operations continue when funding lapses. Still, Grossman cautions that no one benefits from a shutdown, and that “it costs more to run the government in partial shutdown mode than in full-service mode.”

In previous shutdowns, Grossman recalls, the FDA prioritized review work that was already near approval once funding resumed—a pragmatic triage that is likely to reappear if the current lapse persists.

The broader picture

For FDA stakeholders—manufacturers, sponsors, and regulated entities—the practical message is straightforward:

• Submissions requiring user-fee payment are on hold.

• Existing carry-over funding can support ongoing reviews temporarily, but not indefinitely.

• Guidance, communications, and policy work will slow dramatically.

• Enforcement and inspection functions will continue only where imminent health threats exist.

The political message is equally clear: the FDA’s hybrid funding model shields it from immediate collapse, but leaves it structurally dependent on timely appropriations to keep user-fee programs functioning.

As Grossman concludes, Congress’s impasse amounts to “a childish game” that ultimately undermines public confidence. For life-science firms, sponsors, and consultants, the task now is to plan around uncertainty—because even the best-prepared agency can’t operate efficiently when its funding pipeline is switched off.

Further reading

• As shutdown begins, FDA to stop accepting new drug submissions (BioPharma Dive)

• FDA avoids the worst amid government shutdown, but new applications put on hold (Fierce Pharma)

• What a Government Shutdown Means for Medtech (MD+DI / Informa Markets)

• “What an FY 2026 federal government shutdown will mean for FDA (Hogan Lovells)

• What the October 1, 2025, Federal Government Shutdown Means for HHS Operations (Foley Hoag)

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