Sequestration Takes Effect, Imposes Major Cuts to Cancer Research and Care

Two months after temporarily delaying a package of budget cuts and tax increases, federal lawmakers allowed the changes to automatically take effect by failing to agree on an alternative plan.

Janis L. Abkowitz, MD

Two months after temporarily delaying a package of budget cuts and tax increases, federal lawmakers allowed the changes to automatically take effect by failing to agree on an alternative plan.

The $85 billion in across-the-board cuts, known as sequestration, will restrict cancer research and care, in part by reducing the budgets of agencies including the National Institutes of Health (NIH) and the Food and Drug Administration (FDA), and also by making it more difficult for physicians to afford to treat patients who are covered by Medicare, leaders in the oncology community have said.

As it became clear that sequestration would not be averted, those advocates asked for an immediate repeal of the budget cuts. Among them was Janis L. Abkowitz, MD, president of the American Society of Hematology (ASH).

“Cuts to NIH will not only affect millions of patients around the world, but will also deliver a staggering blow to the American biomedical research enterprise as we know it,” Abkowitz said in a statement. “As a direct result of cuts implemented, several thousand NIH grants are expected to be eliminated, delaying or halting vital scientific discovery and slashing thousands of jobs. Many projects would be difficult to pursue at reduced levels and would need to be cancelled, putting prior-year investments at risk.”

Abkowitz added that “these cuts will have an exponential effect on the future of research and medicine: An entire generation of scientists may be turned away from careers in research and never return.”

Sandra M. Swain, MD

Also “deeply disappointed” was Sandra M. Swain, MD, president of the American Society of Clinical Oncology (ASCO), who said her organization would also urge Congress to “retroactively reinstate critical funding.”

“Sequestration will have a shattering impact on the entire cancer enterprise in the United States,” Swain said. “The cuts will be far-reaching and widely felt, and–ultimately–it’s the cancer patient, fighting for his or her life, who’s going to feel the most profound impact from reductions in clinical cancer research, slowdowns in the drug review and approval process, and oncology practices being squeezed by cuts to reimbursement.”

Under the Budget Control Act of 2011, the cuts to defense and nondefense spending were scheduled to take effect January 2 unless Congress had agreed on an alternative plan to reduce America’s budget deficit by $1.2 trillion. The sequester, considered harsh, was scheduled as an incentive to promote compromise and was never intended to be implemented, according to a report by the Office of Management and Budget, part of President Barack Obama’s administration. The report called sequestration a “blunt and indiscriminate instrument” that “would be deeply destructive to national security, domestic investments, and core government functions.”

In January, even after political wrangling had pushed a decision beyond a year-end deadline widely referred to as the “fiscal cliff,” no alternative plan had emerged. However, the federal government passed the American Taxpayer Relief Act of 2012 (ATRA), delaying the cuts until March 1.

In the interim, Democrats and Republicans failed to agree on an alternative to the sequester and stopped negotiating in a stalemate over whether a deal should include tax hikes.

In a press conference, Obama said that Medicare will likely be on the table in future discussions about how to reduce America’s deficit.

“The vast majority of economists agree that the problem when it comes to deficits is not discretionary spending,” Obama said. “The problem (is) our healthcare costs and programs like Medicare. And what I’ve said very specifically…is that I’m prepared to take on the problem where it exists on entitlements, and do some things that my own party really doesn’t like if it’s part of a broader package of sensible deficit reduction.”

Under sequestration, Medicare reimbursements to physicians will be cut by 2%, effective April 1. An additional 27% cut to those reimbursements under the Sustainable Growth Rate formula has been delayed until 2014 under ATRA, an ASCO spokesperson said.

Also on tap under sequestration are slashes of $85 billion to government agencies that will include cuts of 5.1% each from the budgets of the Centers for Disease Control and Prevention and the NIH–whose budget in 2012, according to ASH, was already lower than it had been 9 years earlier.

Specifically, the cuts will take $1.5 billion from the NIH’s budget, $265 million of that affecting the National Cancer Institute, the ASCO spokesperson said. The cut to the FDA’s budget will total $210 million, she said.

Before the cuts were delayed on January 2, anticipated budget reductions to various federal agencies were higher, at 8.2%; they are lower now to account for the abbreviated portion of 2013 in which they will play out, according to the ASCO spokesperson. However, in relation to the number of months remaining in the year, the slashes are now proportionately larger, and so will be felt more harshly, ASH stated on its website.

At the NIH, the sequester will result in an estimated loss of 20,500 jobs and $3 billion in economic output, the American Association for Cancer Research (AACR) wrote in a statement.

On its website, ASH reported that the directors of the 27 institutes and centers that make up the NIH will get to decide where to effect the cuts. But, on a recent tour of NIH facilities, ASH reported, US Senator Barbara A. Mikulski, D-Maryland, chair of the Senate Appropriations Committee, rejected the value of that flexibility.

"The sequester is like the Titanic hitting an iceberg,” ASH quoted Mikulski as saying. “Flexibility essentially says, ‘You're on a ship that's sinking, what deck do you want to be on? As you go down, do you want to be closer to the kitchen? Do you want to be closer to the band while we hum ‘Nearer My God to Thee?’”

The AACR and 100 partnering organizations plan to speak out against the budget cuts with a Rally for Medical Research on the steps of the Carnegie Library in Washington, DC, on April 8. Participants will call on America’s policy makers to make lifesaving medical research funding a national priority, particularly through a sustained investment in the NIH, the AACR wrote in a statement.

On February 27, the Leukemia & Lymphoma Society (LLS) also registered its disapproval of the impending cuts.

“An explosion of innovative science, and the clinical successes of a new wave of targeted therapies and immunotherapies, are transforming the landscape of blood cancer,” LLS Chief Mission Officer Louis J. DeGennaro, MD, said in a statement. “Survival rates for some blood cancer patients have doubled, tripled, and even quadrupled, yet critical unmet needs remain. Resources in Washington–at the department of Health and Human Services and FDA–are essential to ‘finish the job’ and bring meaningful access of these breakthroughs to patients.”

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