Effects of Government Shutdown on Natural Health Industry

Should the clock strike midnight without an approved budget bill from Congress, the federal government will shut down. Sort of. The logistics of ceasing operation of an entity the size of the US federal government is not simple, and several agencies and contractors are working hard to decide which of their workers will stay on the job and which will undergo furlough. Undoubtedly, not every consequence is known, but for the natural products industry the primary effects would be tied to NIH (National Institutes of Health), namely FDA. USDA and FTC are the other agencies most likely to affect the industry.

All of these agencies have responsibilities to monitor and enforce regulations pertinent to the natural products industry, including foods and supplements. FDA’s influence on industry is either in rulemaking or issuing guidance, which are more long-term operations not likely to be affected by a temporary government shutdown, especially a short one.  The enforcement of existing regulations, however, can be affected by short-term shutdown, and FDA has said its ability to perform inspection would be severely limited during any shutdown. The agency wasn’t clear how many of its 13,000 employees would be furloughed, but it did say some staff at its Office of Regulatory Affairs, which oversees import inspections, will remain on the job.

Essentially, it seems as though government workers involved in critical areas, like safety of imports, would be far more likely to stay at work than those that work on rulemaking and outreach. FDA said it uses a system of prioritized risk to assess what staff will remain. For natural products, GMP inspections will likely come to a halt, and the new dietary ingredients (NDI) guidance will sit idle—some say it’s been idle for a long time.  FDA has assured monitoring activities for safety of imports, especially products from Japan, will not be adversely affected. Thus, there should no profound adverse effect on industry from a shutdown that would halt funding to the agency that most affects natural products.  

Similarly, FTC affects industry most in monitoring advertising and acting on violations, so while a shutdown would lead to a furlough of most FTC workers, according to the agency, those whose job addresses a threat to human life or property that requires immediate action would be exceptions to the furlough rule. If the shutdown is short, this should have no major effect on the industry.

USDA is responsible for overseeing food safety, including domestic livestock and agriculture, and both imported and exported. The agency has reported a number of its employees in critical areas, such as field inspections of meat, poultry and egg products, will remain on the job, while many other workers will be “on call,” including those who would respond to an immediate incidents such as contamination outbreaks or food safety recalls. Sounds like USDA will have any critical food safety areas covered to some degree.

One of the overlooked areas where a shutdown could affect natural products is in the area of research. Now, the highest risk is to clinical research involving time-sensitive components, such as stem cells, or subjects, such as animals, that need monitoring. NIH research centers have been working to preserve any specimens or cell cultures, in addition to not starting any new projects this past week. However depending on how a particular study is funded, some research will be stopped, including those still registering subjects. Stopping a trial midstream could have an adverse effect on the integrity of the trial, depending on the design and trial stage. It is not clear how many, if any, trials involving natural products could  be affected, but in theory, the shutdown, even for a few days, could affect some research.

Overall, a shutdown of a few days or less does not appear to threaten the natural products industry in a significant way beyond some monitoring gaps and delayed inspections, including GMP inspections, and work on policy, including guidance, rulemaking and approvals. OF course, should the shutdown go longer than a week or two, the effects could magnify, and the agencies will have to play catch-up when the government doors swing back open.