The user fees FDA already lost to sequester may not be recovered, but Congress is expected to make an attempt to ensure the same thing does not happen in fiscal year 2014.

Congressional staff and Rep. Sam Farr, D-Calif., said following a June 5 subcommittee mark-up of the FY 2014 agriculture appropriations bill, which includes FDA funding, that the FY 2013 fees FDA lost to sequester likely will remain unavailable because they could not overcome issues related to the Congressional Budget Office score of the potential change.

A staffer said several amendment drafts were considered, but none could be used. The next best thing is to ensure going forward that user fees will be available even if the sequester continues.

Farr said he would propose an amendment making the change at the full committee mark-up of the bill, expected the week of June 10.

FDA lost $82 million in FY 2013 user fees when the budget sequester went into effect, and $209 million overall. It forced the agency to suspend some hiring as well as cut travel and training budgets, but it did not require employee furloughs ([A#14130301008]).

The lost user fee revenue forced FDA to delay adding some communications liaisons intended to help sponsors gain answers to application questions Also see "PDUFA Communications Hurt By Sequestration As Late-Stage Meetings Begin" - Pink Sheet, 8 April, 2013..

Farr and other legislators already had said they were looking for a way to give FDA access to the sequestered user fee funding because it could not be used for debt reduction. He worried that industry would become frustrated that the government is not being a fair partner ([A#14130426007]).

FDA Would See A Small FY 2014 Discretionary Funding Increase

The House Appropriations Subcommittee on Agriculture, Rural Development, FDA and Related Agencies did not propose any amendments to the bill during the mark-up and reported it to the full committee by voice vote.

FDA would receive nearly $4.3 billion overall, including user fee revenue. That is slightly higher than the almost $4.2 billion the agency received in the FY 2013 continuing resolution.

The bill would increase FDA discretionary funding slightly, by $24 million, from the FY 2013 enacted amount, which was before sequester cuts were made. Included was a $2.5 million increase for drug safety activities, the committee said.

About $1.3 billion would go to the Center for Drug Evaluation and Research for its field activities and those of the related Office of Regulatory Affairs. Another $331.7 million would go to the Center for Biologics Evaluation and Research for its and ORA’s related field work.

FDA also would receive $175.8 million for rent payments, including $63.9 million for construction at its White Oak headquarters.

While the agency would receive some additional funding, its growing reliance on user fees may be among the reasons Farr and his colleagues will push to remove the revenue from the sequester.

The bill would appropriate $760 million for prescription drug user fees, $306 million in generic drug user fees, and $20.7 million in biosimilar user fees.

The Alliance for a Stronger FDA was encouraged by the additional budget authority in the FY 2014 bill, but said the agency still needs more money.

Alliance President Diane Dorman said in a written statement that the subcommittee’s decision to “exceptionalize FDA … is a positive step in the right direction.”

The agency asked for more than $4.6 billion in the White House FY 2014 budget request, with nearly half coming from user fee revenue. Nearly two-thirds of the request for the human drug program came from user fees Also see "FDA’s Budget Proposal: It’s The User Fees’ Agency Now" - Pink Sheet, 15 April, 2013..

FDA may be forced to rely on fees even more in FY 2015. The White House has told agencies that they should cut 5% from initial FY 2015 budget projections, as well as include options for more reductions, if necessary Also see "FDA Budget May Need To Be Trimmed 5% In FY 2015" - Pink Sheet, 31 May, 2013..

Compounding Language May Be Included

FDA was mostly ignored during the mark-up, although Rep. Hal Rogers, R-Ky., who chairs the full Appropriations Committee, said FDA funding will go toward prevention of diversion and abuse of prescription painkillers, including “supplying the resources necessary for the agency to establish standards for abuse-deterrent drugs,” according to his prepared remarks.

Rogers and others have pushed FDA to deal with opioid abuse problems. The agency recently gave reformulated OxyContin (oxycodone controlled release) an abuse-deterrent claim Also see "OxyContin’s Abuse-Deterrent Claims Strong, But Stronger Claims Possible" - Pink Sheet, 22 April, 2013..

Rep. Rosa DeLauro, D-Conn., said she did not support the bill, but was grateful language related to compounding had been inserted into the committee report, a set of directions from legislators on how money that is attached to the bill should be used.

DeLauro said after the hearing that the provision dealt with ensuring the safety of compounded medicines at the state and federal levels.

The report language would represent the most concrete action by the House on the compounding issue. Several bills already are circulating, including one introduced by DeLauro, with more potentially on the way that will address compounding oversight and program funding ([A#14121207005]).

To date, House Republicans have framed the compounding issue as a problem that FDA could address with its existing authorities. Rep. Morgan Griffith, R-Va., has said that he is writing legislation that would be based on a 2012 draft guidance on compounding that the agency was writing but never released ([A#14130523005]).

The Senate Health, Education, Labor and Pensions Committee also sent a compounding bill to the Senate floor that expands FDA authority over the industry and creates a user fee to help fund inspections and other facets of the program ([A#14130522004]).

DeLauro has opposed the growth of user fee funding in the past and famously blocked implementation of a fee for agency direct-to-consumer advertising reviews several years ago Also see "DTC User Fees Rejected By House Approps Panel As FDA Safety Funds Get Boost" - Pink Sheet, 23 July, 2007..

User fees from compounding manufacturers are a key element of the Senate bill. FDA already has said the extra funding is necessary to conduct facility inspections, include compounders in the adverse event reporting system and write the necessary guidance ([A#00130520017]).

FDA’s Sequestered User Fees From FY 2013 Likely Gone, But FY 2014 Fees Could Be Exempted

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