User Fees Expected to Pay for 98 Percent of FDA Budget Increase Request

The Food and Drug Administration requested a budget of $4.5 billion under the President’s fiscal year (FY) 2013 budget – a 17 percent increase from the enacted budge of FY 2012.  In general, while the FDA’s budget request of money provided by the government remained flat from FY 2012, a larger percentage of the FDA’s overall budget is predicated on user fees provided by companies whose products are approved and overseen by FDA.  For FY 2013, user fees would be expected to pay for 98 percent of the proposed increase in budget, and 44 percent of the total budgeted amount for the FDA.  As we noted previously with medical devices, there has been concern over the years that the user fees put the FDA in a difficult position because the agency is getting money from the same companies whose products it approves.

As for the FY 2013 budget request, the agency has recommended new user fees to support the review of generic drugs and biosimilars.  In addition, the FDA budget also contains increased funding for priorities such as import safety, medical countermeasures and research facilities to protect patients and consumers.

The FDA’s listed highlights of the FY 2013 budget include:

  • $364 million in new user fees, as noted above, to support FDA generic drug activities and development and review of biosimilar biological products.  The FDA’s initiative also includes resources to equip state-of-the-art laboratory facilities at the agency’s Maryland campus for research to protect patients and consumers;
  • $253 million was also requested to bolster the FDA’s efforts in implementing a food safety system – per the Food Safety Modernization Act (FSMA) (P.L. 111-353).  With the addition of new user fees, the FDA’s goal is to evolve the current system from a reactionary one to a prevention-focused domestic and import food safety system;
  • $10 million would be spent by the agency to enhance collaboration with Chinese counterparts and increase the agency’s presence in and expertise on China.  The FDA noted that inclusion of the monies would strengthen the safety of the food and drugs produced in China for export to the United States;
  • $3.5 million would be spent on national security and public health requirements for medical countermeasures (MCM) readiness.  In FY 2012 Congress provided new resources to the agency in protecting the United States from chemical, biological, radiological and nuclear threats, and from emerging infectious diseases such as pandemic influenza.  According to the FDA, the additional resources in FY 2013 would support science and partnerships to improve MCM development timelines and the success rates for MCMs; and
  • $20 million would be saved by the agency in consolidating data and other IT measures, such as reducing redundant computer equipment.