FDA Home Page | Search FDA Site | FDA A-Z Index | Contact FDA

FDA Backgrounder
April 9, 2001

FDA's Budget Request for FY 2002

The President's budget request for the Food and Drug Administration in fiscal year (FY) 2002 (Oct.1, 2001-Sept.30, 2002) totals $1.414 billion, an increase of $123 million or 9.5 percent over FY 2001. The request includes $204 million in industry-specific user fees.

The proposed budget reflects FDA's commitment to continue strengthening public health protection by basing its regulatory decisions on sound, unbiased, state-of-the-art science; assuring the safety of products throughout their entire life cycle; optimizing the agency's standards-enhancing and harmonizing operations within the global marketplace; leveraging programs in cooperation with stakeholders; and maintaining the highest, science-based standards as a critical precondition for effective health-care delivery and continued consumer confidence.

The requested appropriation increases, which focus on urgent public health hazards and major performance goals emphasized by Congress, include the following:

• $40 million to meet mandated cost-of-living and pay-related increases for FDA's employees. From FY 1993 to FY 2000, FDA has had to absorb $284 million in mandatory pay raises and other unfunded inflationary costs by reducing its staffing of all programs not supported by user fees from 8,996 to 7,908. During the same period, research and development spending by the pharmaceutical industry and the National Institutes of Health-which generates new medications for FDA's review and surveillance-increased from approximately $22 billion to almost $45 billion. The request will enable the agency to maintain current levels of performance, and support about one-half of the staff that reviews generic and other drugs not covered by the Prescription Drug User Fee Act of 1992.
• $15 million to protect consumers against the variant Creutzfeldt-Jakob disease (vCJD), a fatal illness that has been associated in Europe with the consumption of meat from cows with Bovine Spongiform Encephalopathy (BSE), or "Mad Cow Disease." Since 1997, FDA has banned the use of mammalian proteins, which are believed to cause BSE, in feed for cattle and other ruminants. The FY 2002 request is designed to ensure the strengthening of and 100 percent compliance with FDA's guidances and rules to help prevent the spread of BSE and vCJD through FDA-regulated products, including drugs, biologics, medical devices, pet foods, food additives, and dietary supplements.
• $25 million to prevent substandard food and health-care products from reaching the U.S. market. In FY 2002, FDA will be responsible for ensuring the safety, or the safety and effectiveness, of $1 trillion worth of food and health-care products, both domestic and imported. Since it is not feasible to reliably sample and test such vast quantities of finished goods, FDA inspects both domestic and foreign facilities for compliance with the agency's Good Manufacturing Practices, which offer the best assurance that the products meet FDA's high public health standards. The request would enable FDA to increase its inspection coverage, surveillance, sampling, and analysis of regulated products, as well as criminal investigation of fraudulent drug imports. The request includes $10.3 million in budget authority and $14.7 million in new user fees for imports. If the new user fees are not implemented, a larger portion of the budget authority will need to be used to support the import program.
• $10 million to safeguard patients against adverse events associated with the use of drugs, biological agents and medical devices by improving FDA's system for monitoring marketed products. According to recent estimates, more than a million people are accidentally injured each year in the United States in the course of medical therapy, and as many as 98,000 die from preventable medical errors. To minimize this hazard, which increases the nation's health-care costs by up to $75 billion a year, FDA plans to use the requested funds primarily for strengthening its capacity to learn about, identify and respond to adverse events; increase education programs for dietary supplements; and educate consumers and health-care professionals on the importance of preventing and reporting medical errors.
• $10 million to protect human subjects and the integrity of research data in clinical trials. FDA is responsible for protecting patients enrolled in clinical studies, and ensuring that the resulting data about the safety and effectiveness of the tested product are accurately stated in the application for marketing. FDA currently performs about 1,100 trial-associated inspections a year-less than 4 percent of the 30,000 clinical sites testing FDA-regulated products. The request will be used to increase the number of inspections by one-third, focus them on high-risk studies, and cover clinical investigators, institutional review boards, sponsors, monitors, and contract research organizations.
• $14.7 million to significantly reduce the incidence of foodborne illnesses that is estimated to affect 76 million Americans each year, more than 300,000 of whom are hospitalized, and 5,000 die from the disease. To counter this human suffering and the resulting $8 billion annual economic cost in medical expenses and lost productivity, FDA proposes to expand the highly successful Food Safety Initiative beyond microbiological contaminants to cover chemical and physical food hazards. The request includes $9.4 million in budget authority and $5.3 million in new user fees for export certification. If the new user fees are not authorized, FDA will have to continue supporting this service to U.S. food exporters from resources intended for food safety.
• $17.3 million to enhance FDA's scientific potential and operational efficiency through infrastructure improvements. The request, which covers three top-priority projects, is broken down as follows: $8.3 million to begin the development of an advanced financial management system as part of an effort by the Department of Health and Human Services to replace antiquated and inflexible systems, and to comply with the requirements of the Government Performance and Results Act; $3 million to complete the construction of a new facility in Los Angeles and move into it an FDA laboratory that analyzes 25 percent of all imported food samples; and $6 million to equip and occupy a new laboratory of FDA's Center for Drug Evaluation and Research as part of the agency's long-range move to a consolidated headquarters in a suburb of Washington, D.C.

FDA is also requesting an increase in current user fees to enhance the review process of new human drugs and biological products, and in fees for applications, establishments and approved products. Of the total request for $204 million in user fees, $20 million-$15 million for import activities and $5 million to provide certifications for food exporters-are new fees that require authorizing legislation. Drug and device exporters already cover such costs. The $162 million requested for drug and biologic reviews under the Prescription Drug User Fee Act includes an increase of $12 million, and the request for fees under the Mammography Quality Standards Act includes $.5 million for inflation.

(BG 01-2)

FDA Home Page | Search FDA Site | FDA A-Z Index | Contact FDA | Privacy | Accessibility

FDA Website Management Staff