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Regulatory Focus™ > News Articles > Budget Passes Senate, Leaving User Fees at 2012 Levels

Budget Passes Senate, Leaving User Fees at 2012 Levels

Posted 24 September 2012 | By Alexander Gaffney, RAC 

Both chambers of Congress have now passed a continuing resolution that would keep the government's-and the US Food and Drug Administration's (FDA)-budget at existing fiscal year 2012 levels, averting a government shutdown but also leaving in limbo several important FDA programs.

Legislators scrambled on 21 September to pass a legislative fix for the establishment of fees for generic drug products, but did not establish similar exemptions for prescription drug, medical device or biologic products, raising the likely prospect that the new funds will not be available on 1 October 2012 when the existing legislation authorizing the programs expires.

Because several user fee programs, including ones for generic drugs and biosimilar products, did not exist in 2012, appropriations for them would not be provided if regular 2012 funding levels were maintained. Similarly, though prescription drug and medical devices products were scheduled to be subject to higher fees in fiscal year 2013, the continuing resolution does not make an exemption for the products.

Legislation to authorize the establishment of a biosimilars user fee program exemption and enhancement of prescription drug and medical device user fees did not pass either chamber of Congress, likely as a result of the compressed legislative calendar. Because different subcommittees have different legislative jurisdictions, legislation must often pass through several committees and sub-committees to become a law. The last-minute markups of the budget legislation may have made this more complicated by bogging down in the House and Senate Appropriations Committees, which typically have jurisdiction over matters of revenue and spending.

The new gap between what FDA can spend-frozen at 2012 levels-and what it is legislatively required to collect-established under the FDA Safety and Innovation Act-could present a headache for companies, which will collectively be paying tens of millions of dollars extra without receiving any additional support from FDA.

Expected to be Signed into Law

In a statement, the White House said President Barack Obama would sign the budget resolution, saying it, "Allows critical government functions to operate without interruption … and ensure that Americans continue to receive vital services and benefits in a timely manner."

The continuing resolution is set to last until March 2013, after which time Congress will either need to pass a separate budget for 2013 or extend the 2012 continuing resolution again-a distinct possibility since the 2014 budget planning process will already be under way.

Congress remains out of session until after the election, and is expected to return for a short session starting 12 November 2012.

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