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Regulatory Focus™ > News Articles > FDA to Get Access to New Funding, Sequestered User Fees Under New Spending Bill

FDA to Get Access to New Funding, Sequestered User Fees Under New Spending Bill

Posted 14 January 2014 | By Alexander Gaffney, RAC

The holiday season may technically be over, but the US Congress is poised to give the US Food and Drug Administration (FDA) a long-sought and large gift in the coming weeks: Access to approximately $85 million in sequestered user fee funding and more than $90 million in new funding.

Background: Sequestered User Fees

FDA was authorized to collect the funds under the 2012 Food and Drug Administration Safety and Innovation Act (FDASIA), but its authority to spend the funds is determined by an annual appropriations process-a procedural quirk given that FDASIA also directs how the money is to be spent.

In August 2011, Congress passed the Budget Control Act, which set up what was essentially a political poison pill: Either Congress would balance the budget, or the legislation would automatically sequester-essentially seize-approximately 5% from FDA and all other federal agencies.

Congress failed to act, and FDA found both its congressionally appropriated funding and its user fee funding subject to the sequester. To date, that has left nearly $85 million in funding that should have been spent on its pharmaceutical, medical device, generic drug, animal drug, tobacco and food programs sitting idle instead at the US Treasury Department.

Funding, New and Old

Now, though, FDA is slated to get those funds back under the terms of a new omnibus spending bill that seems likely to pass.

"The agreement includes the work of all of our Subcommittee Chairs and Ranking Members - in total, nearly 50 Members of the House and Senate, an equal number of Democrats and Republicans," Senate Appropriations Chairwoman Barbara Mikulski said in a statement provided to Roll Call. "It is truly a bipartisan agreement," she added.

The agreement contains $2.552 billion in appropriated funding for FDA, according to Steven Grossman and Ladd Wiley of the group Alliance for a Stronger FDA, who noted that this would be a $91 million increase above the amount provided to FDA in FY2013.

"This fully restores FDA's pre-sequester funding and actually increases FDA funding beyond its FY12 number (which was the last year before the sequester was implemented)," Wiley and Grossman explained.

But just as importantly, the bill contains provisions to allow FDA to access $85 million "to restore the loss of funds due to OMB's sequester of FDA user fees," they added. The duo noted that while the information is contained clearly in the committee summary of the text, it is curiously not in the legislative language itself. "While we have no reason to doubt the summary, we will attempt to confirm details this week," they concluded.

Industry: Development Welcomed

News of the return of the user fee funding was met with exuberance by members of industry, including the Pharmaceutical Research and Manufacturers of America (PhRMA), a prominent pharmaceutical trade group for US companies.

"PhRMA greatly appreciates the efforts of members of the House and Senate Appropriations Committees as well as leaders in both Chambers who have worked tirelessly over the past year to find a bipartisan resolution to restore FDA's access to the sequestered FY2013 Prescription Drug User Fee Act (PDUFA) funds," said Sascha Haverfield, VP of Scientific and Regulatory Affairs at PhRMA. "The release of these funds will benefit patients, public health and regulatory science."

"We look forward to working with the FDA as the Agency pursues implementation of the regulatory science initiatives which were a key component of the PDUFA V technical agreement but were negatively impacted by the sequestration of PDUFA user fees."

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