A House Appropriations subcommittee recommends cutting FDA's fiscal 2012 direct appropriations 11.5% while increasing user fees nearly 25%.

The bill the Agriculture/FDA subcommittee passed May 24 sets FDA's total appropriation at $3.65 billion, down slightly from the agency's $3.66 billion budget for fiscal 2011 (Also see "FDA Gets Boost In Fiscal 2011 Compromise, Cuts Loom For 2012" - Pink Sheet, 18 April, 2011.).

Fiscal 2012 Budget Proposal Highlights

FDA: $3.65 bil. with $2.2 bil. direct appropriation
CDER: $1.03 bil., $416 mil. direct
CFSAN: $799.8 mil., $750 mil. direct
Food safety fees: $12.4 mil. from mandatory recalls; $14.7 mil. from re-inspection fees; $36 mil. from voluntary qualified importer program
Loss of 500-1,000 staff positions, according to the Alliance for a Stronger FDA

The U.S. Treasury's share of the total – the direct appropriation – is $2.2 billion, down $285 million, 11.5%, from fiscal 2011.

The remainder of FDA's budget will come from user fees, which the bill increases by 23.8% to $1.49 billion.

Firms pay user fees for the agency's product reviews and facility inspections related to drugs and devices. FDA's budget also includes food safety user fees for facility inspections, recall costs and registration.

The Center for Drug Evaluation and Research would receive $1.03 billion, with less than half – $416 million – from direct appropriation. The remaining $856 million would come from prescription drug user fees, including those paid by firms sponsoring Rx-to-OTC switches.

Meanwhile, the Center for Food Safety and Applied Nutrition would receive $799.8 million, with $750 million from direct appropriation.

The remainder comes from user fees authorized in the FDA Food Safety Modernization Act that Congress passed in 2010. The food safety fees include $12.4 million from fees recouped when the agency conducts a mandatory recall, $14.7 million from re-inspection fees and $36 million for the voluntary qualified importer program.

Supplements, which are regulated as foods, are subject to these fees despite being exempted from hazard analysis and critical control point regulations duplicative of good manufacturing practices standards (Also see "Supplement Ingredient Suppliers Should Prepare For Food HACCP Regs" - Pink Sheet, 9 May, 2011.).

The full House Appropriations Committee is scheduled to consider the bill May 31.

Industries Want "Strong FDA"

The Alliance for a Stronger FDA said the proposed fiscal 2012 budget is insufficient and pledged to push for an increase.

Despite the economic downturn and pressure to decrease the federal deficit, "now is not the time to cut the FDA," Richard Buckley, AstraZeneca VP for Federal Government Affairs and an alliance board member, said in a statement. "A strong FDA is welcomed by the industries it oversees and spurs innovation that drives our economy."

According to the alliance's calculations, the cut would eliminate 500 to 1,000 staff positions at FDA in fiscal 2012.

The subcommittee's appropriation is far less than President Obama's fiscal 2012 request, which would have increased funding dramatically – to $2.7 billion for the agency overall, excluding user fees – and called for more food safety user fees (Also see "President's Budget Proposal Points To Expanding FDA User Fees" - Pink Sheet, 21 February, 2011.).

Before the subcommittee released the bill, FDA Deputy Commissioner for Foods Mike Taylor emphasized the need for "meaningful increases" in funding over the next few years to carry out duties required under the food safety bill.

"There's no question if you build, for example a whole new import oversight system, you've got to invest in the infrastructure to do that," he said May 19 during a speech in Washington.

By Carolyn B. Phenicie

House FDA Budget Bill Boosts User Fees, Trims Direct Appropriations

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