User Fees Expected to Save Taxpayers $358M Over Next Ten Years

The US Senate's Food and Drug Administration Safety and Innovation Act (FDASIA) is a expected to save taxpayers $358 million over the coming decade, with $71 million in savings in the next five years according to an analysis conducted by the Congressional Budget Office (CBO).

The bill, whose primary purpose is to reauthorize a variety of user fee programs used to fund the US Food and Drug Administration (FDA), contains a number of reforms and adjustments that would impact the federal budget, writes CBO.

"The bill would provide the FDA with additional regulatory authority to improve the safety of the drug supply chain and establish an early warning notification system to mitigate or prevent critical drug shortages," explained CBO in its analysis. "It also would create a new approval procedure for breakthrough drug therapies and offer financial incentives to drug sponsors to produce certain antimicrobial drugs. In addition, the legislation would streamline the process for reclassifying medical devices and permanently reauthorize programs that evaluate the use of drugs by children."

The bill impacts the federal budget in a number of ways.

While the user fees would directly offset many of FDA's increased spending on new staff and improvements ($6.4 billion between 2013 and 2017), some of the savings realized by the bill would be the result of federal programs being able to access less expensive drugs, writes CBO.

The bill would also minimally reduce federal outlays by going after violators of federal regulations with increased vigor.

"In addition, the bill would make certain violations of new requirements subject to criminal and civil money penalties," explains CBO. However, the agency "estimates that any net effects would not be significant in each year because of the small number of cases likely to be affected."

However, the largest impact on FDASIA on budget outlays comes as the result of spending of user fee dollars lagging the collection of such dollars.

"CBO estimates that gross FDA spending in subsequent years would exceed the amounts collected from fees (because some of the spending under the bill would not be offset by fees) and that the net discretionary cost of implementing the bill would amount to $332 million over the 2013-2017 period."

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CONGRESSIONAL BUDGET OFFICE COST ESTIMATE: FDASIA