Regulatory Focus™ > News Articles > President Signs into Law Budget Bill that Restores FDA's Authority to Spend User Fees

President Signs into Law Budget Bill that Restores FDA's Authority to Spend User Fees

Posted 27 March 2013 | By Alexander Gaffney, RAC

A new budget resolution passed into law by President Barack Obama on Wednesday will for the first time allow the US Food and Drug Administration (FDA) to spend tens of millions of annual user fees the agency had already been authorized to collect under the Food and Drug Administration Safety and Innovation Act (FDASIA) of 2012, but had been unable to spend under its existing budgetary authority.


The fees are responsible for funding a significant portion of the operations of FDA, which relies on them to be able to hire more staff, fund regulatory improvement projects and conduct inspections. Though it was given the authority to collect the fees under FDASIA, the authority to actually spend the fees can only come through budget bills passed by the House and Senate and signed into law by the president.

A series of budget battles in the past few years have left the US government, including FDA, operating on a series on continuing resolutions that have maintained spending at fiscal year 2012 levels. That means FDA has been unable to spend the additional user fees, even as they are held in FDA accounts, because they are held to FY2012 levels of spending.

More troubling from FDA's perspective is that even while it has been unable to spend the user fees, it has still been expected to start working to meet the goals of the various user fee bills contained within FDASIA, including the Prescription Drug User Fee Act (PDUFA), the Medical Device User Fee Act (MDUFA) and the Generic Drug User Fee Act (GDUFA).

New Budgetary Authority

The lack of spending authority was thought by many to be an inadvertent oversight by legislators, who had overwhelmingly voted to pass FDASIA in 2012-one of the only substantive bills during the 112th Congress to receive any sort of bipartisan support.

That thought was largely affirmed in recent weeks, as both House and Senate versions of a new continuing resolution bill included language that would explicitly allow FDA to spend the new user fees it is required to collect under FDASIA.

Under the new legislation, FDA will be authorized to spend $718 million in PDUFA fees, $97 million in MDUFA fees, $299 million in generic drug user fees, and $20 million in biosimilar user fees-an increase of more than $50 million.

While those fees are still subject to the effects of budget sequestration, the increase is undoubtedly a relief for an agency that stands to lose about $310 million on a per-annum basis due to budget austerity measures.

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