As the partial shutdown of the U.S. government reaches a month (the longest in U.S. history), and thousands of federal workers furloughed or working without pay, regulated industry and stakeholders are asking: How long will the shutdown continue? And, what is the impact of the shutdown on federal agencies and regulatory matters? In addressing the first question, there does not appear to be an immediate end in sight as President Trump’s standoff with Congress over a border wall continues. The history of government gridlock shows that if shutdowns are not resolved in a few days, they can drag on for two or three weeks (or, as seen here, even longer). As for impact on government agencies, we focus our update on the effects of the shutdown on the Alcohol and Tobacco Tax and Trade Bureau (TTB) and the Food and Drug Administration (FDA).

TTB

It appears that TTB is only collecting tax payments at this time. Although a temporary landing page on TTB’s website indicates that it is “officially closed,” companies can still access the TTB website (although the information may not be up-to-date) during the shutdown period to make electronic payments, submit labels or formulas, and file operational reports. Firms can access TTB’s eGovernment applications, including Permits Online, Formulas Online, and COLAs Online, during the shutdown period; however, these will not be monitored and submissions will not be reviewed or approved until appropriations are enacted. No personnel are currently available to respond to any inquiries, including emails and telephone calls. TTB has suspended all non-excepted TTB operations, and the website and operations will fully resume when appropriations are reenacted. In its notice, TTB states that it has directed employees NOT to report to work and they are prohibited by federal law from volunteering their services during a lapse in appropriations.

During the shutdown, firms should continue to follow their normal compliance processes, including filing operational reports and making Federal Excise Tax payments. Firms should also continue to submit any new permit applications through the TTB website to ensure their applications remain in the queue. Unfortunately, there will be unavoidable delays and longer processing times, given that TTB employees will not be available to process submissions during the shutdown, and are likely to have a considerable backlog of applications when they return.

FDA

Compared to TTB, FDA will be more operational during the shutdown. Generally, FDA is continuing operations to the extent permitted by law. FDA is continuing specific activities within the scope of its user fee-funded programs, including those for prescription drugs, generic drugs, biosimilars, medical devices, animal drugs and tobacco products. FDA will also continue vital activities to respond to emergencies, manage high-risk recalls, pursue criminal enforcement work and civil investigations related to imminent threats to human health or life, review import entries to determine potential risks to health, and respond to other critical public health issues, as appropriate. FDA will also continue to address existing critical public health challenges, including drug shortages, and outbreaks related to foodborne illness and infectious diseases. Routine safety inspections and establishment inspections, however, are halted (although FDA may still inspect facilities when FDA believes there is an imminent public health threat).

With respect to effects on the Center for Tobacco Products (CTP), many of CTP’s activities are expected to continue through the shutdown, including overseeing requirements under the Tobacco Control Act related to the manufacturing, distribution, and marketing of tobacco products. FDA’s shutdown plans have about 58% of staff remaining active, with approximately 42% furloughed. The staff shortage will inevitably lead to delays in responding to inquiries and meeting requests and reviewing submissions.

FDA will continue to support activities funded by carryover user fee balances; however, during the lapse period, the FDA will not have legal authority to accept user fees assessed for fiscal year 2018 until an appropriation for the FDA is enacted. This means that FDA will not be able to accept any regulatory submissions for FY2018 that require a fee payment and that are submitted during the lapse period. Historically, as user fee money dries up, FDA has shifted funds around to try to better monitor existing products rather than to work on new product applications and premarket review. However, because this is a dynamic situation, FDA activities are subject to change, particularly if carry-over funds deplete, or pursuant to actions by Congress and the Administration.