Regulatory Focus™ > News Articles > Proposed Senate Bill would Increase FDA Funding by $24 Million, Restore User Fee Funding

Proposed Senate Bill would Increase FDA Funding by $24 Million, Restore User Fee Funding

Posted 13 March 2013 | By Alexander Gaffney, RAC 

The Senate version of a Continuing Resolution bill that recently passed the US House of Representatives would, like the House version, allow the US Food and Drug Administration (FDA) full access to user fees it now collects from generic pharmaceutical and medical device companies under the 2012 FDA Safety and Innovation Act, as well as some additional appropriated funding.

The fees are responsible for partially funding the regulatory agency, which relies on them to be able to hire more staff, fund regulatory improvement projects and conduct inspections. Though FDA 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.

The House's budget bill, and now the Senate's, would change that dynamic.

Changes

Under the proposed Senate continuing resolution, FDA would be funded with $4.223 billion in total funding, including $718.7 million in prescription drug user fees, $97.7 million in medical device user fees, $299 million in generic drug user fees, $20 million in biosimilar user fees, and $29.8 million in animal drug user fees (branded and generic).

On a per-department (and related areas) basis, FDA would see its funding as follows:

  • Center for Drug Evaluation and Research (CDER) - $474.1M
  • Center for Biologics Evaluation and Research - $210.4M
  • Center for Veterinary Medicine - $137.3M
  • Center for Devices and Radiological Health - $320.3M
  • National Center for Toxicological Research - $59.4M
  • Office of the Commissioner -$ 163.5M
  • Rent and Facilities- $162.4M
  • Total User Fees: $1.7B

Specific Programs

The funding also includes a number of specific programs relevant to FDA's interests. For example, FDA proposed to cut more than $19.7 million in information technology spending, which the Senate accepted. Legislators, however, recommended $10 million in new funding for drug safety inspections in China, $3.5 million in medical countermeasure spending, and $21 million in rent and facilities payments.

FDA's budget will also continue to see $58 million as part of its White Oak consolidation plan in which the agency is consolidating many of its various capitol offices to its main location in Silver Spring.

Many of these activities were contained within President Barack Obama's FY2013 budget request, but were never incorporated.

The Senate's explanation of FDA's budget also includes a curious notice indicating that legislators did not find useful FDA's attempts to justify program increases. "FDA is reminded that the budget justification is specifically for the use of the Committees," the note says. "A more streamlined approach to the justification would serve both the Agency and the committees. Therefore, prior to submission of the FY2014 budget, FDA is directed to work with the Committees to determine the most helpful format in which to submit the justification."

'Highly Favorable to FDA'

In a statement, The Alliance for a Stronger FDA called the bill "highly favorable to FDA," and noted that it increases FDA's appropriated budget by around $24 million. Critically, the bill also includes the user fee increases for all programs, while the House bill only specifically does so for medical devices and generic drugs.

This increase, however, does not account for the effects of the sequester, which would reduce FDA's budget by around $210 million through FY2013. However, trade publication BioCentury reported last week that the White House is lobbying some members of Congress to eliminate the sequester's effect on user fees, which would restore tens of millions of dollars to the agency. As of the time of this article's publication, those fees have not yet been restored.


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