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Apr 30, 2012

Senate Appropriations Approves FDA Budget for FY 2013

  • The Senate Appropriations Committee has approved a fiscal year 2013 budget for FDA. It increases funding to implement the Food Safety and Modernization Act, carry out the medical countermeasures program, and conduct safety inspections in China.

    FDA would see its budgetary authority inch up to $2.524 billion. That is $12.5 million, 0.5%, more than the spending plan submitted in February by President Barack Obama and $27.47 million, or 1.1%, more than the current fiscal year. When industry user fees are included, FDA’s total program spending would jump $19.794 million, or 0.5%, to $3.91 billion, which is nearly $571 million, or 13%, below the President's proposed level.

    Senate Appropriations trimmed user fees to about $1.386 billion, down nearly 30% from the $1.969 billion envisioned by President Obama’s spending plan and a 0.5% dip from the $1.393 billion budgeted for FY ’12, as the committee limited user fees to the current-year budget request.

    The resulting cutbacks were precautionary since user fees under the Prescription Drug User Fee Act and Medical Device User Fee and Modernization Act are pending reauthorization for FY 2013. The Senate appropriations spending plan for FDA also doesn’t include generic drug and biosimilar fees, since they are subject to a new user-fee program yet to be authorized by Congress.

    FDA is counting on $299 million in first-time revenue from new user fees to be imposed on developers of generic drugs, allowing for hiring 450 full-time equivalent employees (FTEs); and $20.242 million in first-time biosimilar user fees, to pay for 72 FTEs. Those charges account for more than half the $563.125 million in new user fees projected by FDA. Of the remainder, the largest new fee would be the $220.2 million in “food establishment registration” fees FDA plans to collect to help pay for 273 FTEs to implement the Transforming Food Safety Initiative portion of the Food Safety Modernization Act.

    Final numbers for those first-time user fees and adjusted drug and device user fees will be added to FDA’s budget later, the committee said. When that happens, user fees are expected to climb, since FDA was counting on user fees to account for 44% of FDA’s budget, up from 35% both this fiscal year and in the Senate Appropriations markup version.

    Senate appropriations approved $21.166 million for “necessary” expenses, mandatory rental payments, and facilities; $12.5 million in additional funds for the Food Safety Modernization Act; $10 million for additional safety inspections in China; and $3.51 million for medical countermeasures (MCMs).

    Under the China initiative, which the committee approved as proposed by President Obama, FDA would set aside $10 million to advise Chinese biopharmas on manufacturing products to FDA standards as well as inspect products produced at the companies’ manufacturing plants, through 19 FTEs to be based in China. Of the employees whose pay the program will fund, 16 will be inspectors based in China.

    The committee supported President Obama’s proposed 17.5% spending increase for the MCMs Initiative to $23.548 million in FY ’13 from $20.038 million. The extra funding will allow the program to support partnerships with industry, academia, and government to improve MCM development timelines and success rates, plus expand technical assistance to developers for the highest priority MCMs.

    In the committee report, Senate Appropriations endorsed several FDA initiatives including:

    • Expanding upon current research in nanotechnology, including the development of a Nanotechnology Core Center that should be designed to “support nanotechnology toxicity studies, develop analytical tools to quantify nanomaterials in complex matrices, and develop procedures for characterizing nanomaterials in FDA-regulated products.
    • Stepping up communication with medical practitioners of drug shortages through specialty-specific lists and other means of targeted communications “to provide information on potential shortages, the anticipated length of time of the shortage, and options for obtaining therapies while they are in short supply.”
    • Continuing to work on critical path, regulatory science, and innovative opportunities and promoting collaborations with other government agencies, academia, patient groups, and other interested parties including existing partnerships with academic institutions.

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