FDA's new budget heavily reliant on user fees

FDA's new budget heavily reliant on user fees

by Brendon Nafziger, DOTmed News Associate Editor | February 13, 2012
The Food and Drug Administration requested a $4.5 billion budget in the Obama administration's $3.8 trillion 2013 federal budget proposal, released Monday, more than 40 percent of which will come from industry user fees.

FDA's budget, a 17 percent or $654 million increase on last year's, includes $387 million in program level expenses for medical devices, $11 million more than last year, according to the budget released by the Department of Health and Human Services. The FDA said it has allocated nearly $1.7 billion for medical products.

The budget places a heavy burden on user fees, which the agency collects from industries to help pay for inspections and speed up product approvals. Such fees account for nearly 40 percent of the proposed budget, FDA Commissioner Margaret Hamburg told reporters at a press conference Monday.

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User fees also account for 98 percent of the growth in spending, the FDA said. The amount requested from Congress, at $2.5 billion, is basically the same as last year's.

The current budget assumes the reauthorization of two user fees expiring in October, one for medical devices and one for drugs, and also includes seven new proposed fees, including a $299 million generic drug fee and a $20 million biosimilar fee.

Patient advocates are often critical of the agency's growing financial reliance on user fees. A Science Insider blog on Monday cited a 2007 Public Citizen letter to Congress which warned that the agency was becoming "dependent for its funding upon the very industry over which it has regulatory authority." Science Insider said that, at the time, the agency drew 20 percent of its budget from user fees.

But user fees weren't the whole story of the proposed budget. The agency also plans to use $10 million in "new resources" to improve inspections of foods and drugs coming from China. The agency has about $1.4 billion devoted to food safety, it said.

About $62 million would also go to pay for the consolidation of offices at the agency's new campus in White Oaks, Md., the agency said.

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