$1.95-Billion FDA Budget Request Focuses on High-Priority Programs

     The US Food and Drug Administration’s budget request for the 2007 fiscal year, released Feb. 6, totals $1.95 billion, an increase of $70.8 million (3.8%) from fiscal 2006.

      All of that increase is earmarked for high-priority programs, including:

• $55.3 million for pandemic protection, increased $30.5 million (123%);
• $178.2 million for food defense, increased $19.9 million (13%);
• $5.9 million for the newly funded Critical Path Initiative;
• $38.5 million for drug-safety oversight, up $4.0 (10%);
• $9.0 million for human-tissues safety, increased $2.5 million (28%); and
• $7.4 million needed to fund the activities that will trigger collection of user fees for medical devices and animal drugs.

      In addition to these increases, the agency is budgeting $20.3 million for cost of living increases and $14.3 million more for infrastructure (to cover rent paid to the General Services Administration and the agency’s consolidation on its new White Oak, MD, campus).

      To cover the costs, the agency plans to reduce spending for existing programs by $52.3 million, defer $3.0 million in facilities and maintenance expenses, and increase user fee revenues by $19 million (to $364.3 million).

      Reductions in Existing Programs

      The agency’s 81-page Performance Budget Overview describes the reductions, referred to as “budget offsets” for “strategic redeployment,” this way:

      “To fund these initiatives and essential infrastructure requirements at FDA, our budget reflects a strategic redeployment of resources from lower-priority programs to the priority initiatives that we have proposed for FY 2007. Our strategic redeployment will achieve program savings of $52,277,000, and thereby enable the Agency to fund new high priority initiatives.”

      All told, FDA will eliminate or change the duties of 189 employees to cover the budget gap. The Food part of FDA will bear the largest portion of these redeployments, some $22.6 million worth. On the Drug side of the house, the $14.9 million in reductions are allocated as follows:

Program

Center

Field

Total

Human Drugs

($5,430,000)

($1,661,000)

($7,091,000)

Biologics

($7,568,000)

($198,000)

($7,766,000)

      The Generic Pharmaceutical Association (GPhA) reacted immediately to the program changes, voicing “extreme disappointment.” The GPhA statement charges that the FDA’s Office of Generic Drugs (OGD) has been “flat-funded at best, even though its workload has increased by a staggering 36%. OGD currently has a backlog of more than 800 generic drug applications, a number that will only grow.”     

      User Fee Changes

      The great majority of user-fee revenues should come from Prescription Drug User Fee Act (PDUFA) charges for human drug approvals, budgeted at $320.6 million, up $15.3 million (4.8%).

      In addition, FDA is asking for authority to impose two new classes of user fees: the larger (budgeted to bring in an additional $22 million in FY 2007), would be levied for re-inspecting human-drug plants that have failed current good manufacturing practice inspections; the fee is estimated to exactly balance the direct costs of re-inspection. The smaller new fee (anticipated to produce $3.5 million) would pay direct costs required to issue some 37,000 annual food and animal-feed export certificates.