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On February 13, 2003, the House passed Conference Report Number 108-10 for the bill making FY 2003 appropriations for the FDA. Also on February 13th, the conference report was agreed to by the Senate and cleared for transmittal to the White House. On February 20, 2003, the President signed the Omnibus Appropriations Bill, and it became Public Law No. 108-7.
FDA's budget request for FY 2004 was included in the Bush Administration's budget proposal submitted to Congress On February 3, 2003. The Commissioner testified on the budget proposal at a hearing before the House Subcommittee on Agriculture, Rural Development, FDA, and Related Agencies on March 6.
The House Agricultural subcommittee on Agriculture, Rural Development, FDA, and Related Agencies marked up the FDA FY 2004 budget request on June 17, 2003. The Agricultural committee as a whole marked up the budget request on June 25, 2003.
The Bush Administration's budget proposal for the Food and Drug Administration for FY 2004 requested $1.406 billion in budget authority, an increase of $22 million over FY 2003. In addition to the FY 2004 $1.406 billion budget authority request, an additional $307 million in user fees from benefiting parties will be collected for a total program level FY 2004 budget of $1.713 billion.
The following is a summary of the differences between the budget request for FY 2004 and FY 2003:
Pay Increase + $23,283,000: This increase will cover a two percent inflationary increase in FY 2004. Payroll accounts for over 60 percent of FDA's budget.
Counter Terrorism - Food Safety + $20,500,000: The increase will provide grants to states, increased laboratory preparedness and funds to develop a foods registration system. The grants to the states will be used to build states' infrastructure to enable them to become part of the Laboratory Response Network and conduct direct federal food inspections. Increased laboratory preparedness will allow the agency's laboratory accreditation program to continue and to develop uniform scientific practices. The resources for the food registration system will allow FDA to develop and implement a system to register domestic and imported food facilities.
Patient Safety + $4,000,000: Medical errors are estimated to account for 40,000 to 100,000 deaths per year in hospitals alone. FDA will continue implementing Phase III of the Medical Product Surveillance Network (MedSun). FDA's new safety initiative, using modern health information systems, will provide faster and more complete information on safety problems associated with drugs and devices so adverse events involving these products can be avoided. Additionally, as part of the increase requested for generic drugs, FDA will place greater emphasis on preventing adverse events involving generic drugs.
Generic Drugs + $13,000,000: The increase will expand FDA's efforts to speed review of generic drug applications. Current savings to consumers from the use of generics is estimated to be in excess of $20 billion. In order to expedite the number of generic drugs available on the market, FDA plans to hire 40 FTEs to reduce review times, develop science, and support implementation of improved regulations for generic drug competition. FDA would also improve its post-market monitoring of adverse events of generic drugs as part of its effort to reduce avoidable complications involving FDA-regulated products.
Over-the-Counter Drugs + $1,000,000: OTC drugs provide an effective means to reduce consumer prescription costs for specified ailments. In an effort to provide greater consumer access to OTC drugs FDA will: Improve the regulatory process to provide the consumer faster access to OTC drug products without compromising safety issues; expedite the review of Rx-to-OTC switches; and, develop and finalize standards for analgesic, antiseptic, laxative, and sunscreen products for OTC use.
Best Pharmaceuticals for Children Act + $5,000,000: The request expands the joint effort between FDA and the National Institutes of Health (NIH) to ensure that medicines have been properly evaluated for use in pediatric populations and to improve the information physicians have to use when prescribing medicines to children. A total of $30 million is requested, $5 million for FDA and $25 million for NIH. FDA will expand its work with industry to develop pediatric specific information for on-patent drugs, and work with NIH to determine the specific research needed for frequently used off-patent drugs.
Medical Device Review + $1,000,000: The Medical Device and Radiological Health program has been re-engineered over the last decade to accomplish more with fewer resources and has changed its strategic direction by shifting its focus to high-risk, high-impact products to maximize the benefits on public health. The increase would allow the agency to work towards shoring up its device review infrastructure and contribute towards maintaining review performance.
Arkansas Regional Laboratory + $3,500,000: This laboratory, which is under construction, will provide critical laboratory analysis for FDA-regulated products in a seventeen-state radius. The request will allow for completion of Phase III of the construction and allow ARL to collaborate with NCTR on scientific issues.
CDER's Relocation to White Oak + $6,000,000: FDA headquarters are currently being consolidated into two locations to achieve considerable annual operating savings and to promote operational efficiencies. Funding will support cabling and relocation services for the second phase of the Center for Drug Evaluation and Research (CDER) relocation that consolidates the offices and laboratories of CDER into one complex in the White Oak area of Silver Spring, MD.
Unified Financial Management System + $2,290,000: This system will integrate the financial management system of the Department of Health and Human Services (HHS) by providing information and promoting the consolidation of accounting operations that will substantially reduce the cost of accounting services throughout HHS.
Department of Homeland Security - $583,000: To support the establishment of the Department of Homeland Security (DHS), FDA will transfer $583,000 to DHS to allow states and major cities to increase the preparedness of hospitals and public health systems. The objective is to increase local preparedness, with national resources ready to be deployed.
President's Management Agenda: The President's management agenda is an aggressive strategy for improving the management of the federal government. It focuses on areas of management across the government where improvements and the most progress can be made to deliver results to the American people.
Management Savings - $25,698,000: FDA is supporting the initiatives associated with the President's Management Agenda. These initiatives will save an estimated $25,698,000 in FY 2004 while better aligning FDA's staff resources with its operational needs and priorities.
Rent Redistribution [$10,000,000]: The General Services Administration (GSA) rent costs are expected to increase by at least $10,000,000 in FY 2004. This increase will be re-allocated by the agency.
Information Technology Consolidation - $29,587,000: Information technology (IT) infrastructure functions and development expenditures will be consolidated in FY 2004, saving FDA $29,587,000. Standardization of management processes will increase the effectiveness of IT, as well as reduce overall costs.
Current Law User Fees + $31,725,000: For the review of drug and biological products $249,825,000 is requested to support the Prescription Drug User Fee Act, an increase of $26,925,000. To improve the medical device review process $29,190,000 is requested for the second year of Medical Device User Fee and Modernization Act, an increase of $4,065,000. To ensure compliance with national quality standards for mammography, $16,576,000 is requested for the Mammography Quality Standards Act, an increase of $464,000. For the certification of color additives used in foods, drugs and cosmetics $5,079,000 is requested, an increase of $201,000 for Color Certification and a $1,570,000 is requested for Export Certification, an increase of $70,000.
Proposed Law User Fees + $5,000,000: FDA has submitted a proposal for a new user fee for the review of animal drug products. This proposal is patterned after the successful Prescription Drug User Fee Act. FDA will improve and expedite the review of animal drug pre-approvals.
Working with industry to reduce threats and contain outbreaks of foodborne illness -- FDA has issued new industry guidance on security measures, and has encouraged specific additional industry security measures in response to the increased threat level. The guidance will help food producers, warehouses, importers, stores, restaurants, and other food establishments minimize the risk that their food will be subject to terrorism. [Counterterrorism Home Page]
Increasing risk-based surveillance of domestic and imported food-- FDA has increased inspections of domestic food facilities and sampling and lab analysis of foods produced here and abroad. [Counterterrorism Home Page]
Developing PrepNet food safety network -- With the U.S. Department of Agriculture and other federal agencies, FDA is designing this safety net that will help prevent and respond to chemical, biological or radiation contamination of our nation's food supply. [Counterterrorism Home Page]
Implementing the 2002 Bioterrorism Act -- Under the Bioterrorism Preparedness and Response Act of 2002, FDA has developed and published proposed regulations requiring all of the more than 400,000 domestic and foreign food facilities to register with FDA. This will allow FDA to follow through quickly on high-risk situations. Also, the new rules will require importers to tell FDA in advance about food shipments, improve FDA's ability to detain suspected food, and require food companies to keep better records so any contamination can be traced back to its source. FDA intends to publish final rules no later than December 12, 2003, in accordance with the deadline set forth in the Act. The law also strengthens FDA's authority to detain suspect food and allows for more grants to the states to help inspect food facilities. [Counterterrorism Home Page]
Increasing ability to quickly identify outbreaks of foodborne illness -- FDA is working with the U.S. Centers for Disease Control and Prevention to ensure that outbreaks or unusual patterns of illness are investigated quickly. [Counterterrorism Home Page]
Increasing participation in the first Internet-based food safety system -- FDA's goal is to have 79 laboratories around the country participating in eLEXNET (Electronic Laboratory Exchange Network). This shared electronic data system consolidates and shares microbial food contamination findings among federal, state and local laboratories. [Counterterrorism Home Page]
Helping to speed development of new emergency treatments and diagnostic tests -- FDA is adapting its review processes and working around the clock to speed the development of products to diagnose, treat or prevent outbreaks from exposure to anthrax, smallpox, plague, and other biological, chemical and radiological agents that could be used by terrorists. FDA is even assuming many of the responsibilities normally carried out by drug sponsors. Specific efforts to date have focused on:
Speeding availability of critical medical products -- FDA has made it possible for critically important treatments and diagnostic tests still under investigation to be made rapidly available for emergency use through rapid turn-around of applications. Flexible, creative ways are being found to share information about these new products (for example, videos for patients who might receive smallpox vaccine). [Counterterrorism Home Page]
Providing researchers with early guidance and assistance -- FDA is providing guidance early on to researchers so that discoveries made in the laboratory can be more quickly turned into counterterrorism products available to first responders, health professionals and the military. [Counterterrorism Home Page]
Relying on animal efficacy studies -- Under a new regulation, FDA can now approve medical treatments against chemical, biological, radiological, or nuclear agents based on evidence of effectiveness from animal studies when human studies are not ethical or feasible. Human data supporting the safety of such products is still required. [Counterterrorism Home Page]
Ensuring an adequate stockpile of emergency medical products -- FDA is working with the Department of Homeland Security's Strategic National Stockpile, as well as with industry, the National Institutes of Health, CDC, the Defense Department, and foreign governments to ensure the safety and effectiveness of stockpiled vaccines and other medical products so that they are available to respond to terrorist attacks. [Counterterrorism Home Page]
Offering research grants and other funding --
Working with the military -- FDA has worked with the Joint Chiefs of Staff to help obtain critical medical products for combat readiness. It has helped U.S. Special Forces obtain medical countermeasures for airborne hospitals used in evacuating battlefield casualties. It has provided intensive consultation and review to help make available needed investigational and licensed medical products such as antisera and vaccines. FDA recently approved pyridostigmine bromide for combat use by U.S. military personnel to protect them from the lethal effects of the nerve gas Soman. The agency also recently cleared a high-tech battlefield wound dressing that can stop massive bleeding within minutes and a decontamination lotion for use by the military to remove or neutralize chemical warfare agents and other toxins from the skin, preventing serious burns and death. [Counterterrorism Home Page]
Protecting children -- FDA has been providing guidance to parents and health professionals when they use antibiotics and other drugs to treat children and pregnant and nursing women stricken by bioterrorist attacks. The advice covers such areas as:
Detecting bioterrorism agents -- FDA is helping develop methods to detect biological agents that terrorists might use in an attack. [Counterterrorism Home Page]
Keeping the blood supply safe -- FDA has provided guidance to blood donation centers and healthcare facilities on prudent measures to reduce any possible risk of transmitting anthrax through blood donated by people who may be infected with the disease. [Counterterrorism Home Page]
Helping companies develop drugs to prevent and treat radiation exposure -- FDA has called for manufacturers to submit marketing applications for Prussian blue, a mineral compound that can help treat people exposed to radioactive elements such as cesium-137. FDA has provided guidance to first responders and health professionals on how to use potassium iodide to reduce the risk of thyroid cancer in radiation emergencies. [Counterterrorism Home Page]
Reviewing radiation devices used against terrorism -- FDA is monitoring the safety and effectiveness of radiation-emitting devices used to detect potential security threats in airports and other locations, devices used to destroy biological agents released in a terrorist attack, and devices used to treat victims of radiation exposure. [Counterterrorism Home Page]
Increasing security measures for animal feed -- FDA is working with other government agencies and the animal feed industry to minimize the risk of terrorist attacks on feed for animals that are raised for human food. [Counterterrorism Home Page]
Facilitating the supply of critical animal drugs -- FDA is ensuring the availability of veterinary drug products to meet emergency needs. [Counterterrorism Home Page]
Working with the cosmetic industry to reduce threats -- FDA has issued draft guidance to industry on security steps they can take to help ensure that their products are secure against terrorism. [Counterterrorism Home Page]
Increasing inspections -- Thanks to increased bioterrorism funding from Congress, FDA has hired over 800 new inspectors and other field personnel to keep watch on imports and other avenues our enemies might try to use to contaminate our food or tamper with other FDA-regulated products. FDA has also increased inspections of facilities that manufacture medical products that could be used in response to a terrorism threat. [Counterterrorism Home Page]
Upgrading laboratories -- FDA has upgraded its laboratories to handle the increased number of sample analyses. Lab scientists are developing rapid methods for detecting bacterial and viral food contaminants. [Counterterrorism Home Page]
Scrutinizing imports -- FDA plans to cover an additional 45 ports of entry where there are significant shipments of FDA-regulated products. The agency is also strengthening its import information systems to improve targeting of suspect products. The links between import and domestic information are being tightened so imported products can be better traced in this country. [Counterterrorism Home Page]
Enhancing research facilities and technologies -- FDA is developing a Level 3 lab at its National Center for Toxicological Research to safely allow analysis and research on select agents. The lab will be used to test food samples that may be contaminated by biological, chemical or radiological means. The center is continuing research to identify and characterize biological warfare agents using technologies involving DNA and proteins. [Counterterrorism Home Page]
Developing methods to detect explosives -- The center is developing sensor technologies to detect nitrogen-based explosives in airline cargo by refining its patented methodology currently used to detect and identify deteriorating food. [Counterterrorism Home Page]
FDA's Patient Safety Initiative is a collaborative effort between FDA's three medical product centers that support the Secretary's goal to "Realize the Possibilities of the 21st Century Health Care" and "Preventing Disease and Illness". This initiative addresses the challenges inherent in managing the risks of and reducing preventable adverse events associated with medical product use by creating a seamless interaction among the FDA, consumers, health care personnel, and the regulated industry.
The FDA is requesting $120.05 million in FY 2004 for rental payments to GSA. This includes budget authority, plus current and proposed user fees. This amount is an increase of $11.78 million over FY 2003, because of the substantial amount of additional space currently being requested or acquired. Also, changes in the amount of time it takes to acquire new space and because of variations in the rent rates always occur. In addition, FDA is working with GSA to obtain space around the county for field offices and additional space for Headquarters Centers at existing or new locations to accommodate the many Bioterrorism Personnel hired with Supplemental funds.
The $307.2 million is comprised of current law and proposed law user fees. Current law user fees include $249.8 million under the Prescription Drug User Fee Act (PDUFA), $29.2 million under the Medical Device User Fee and Modernization Act (MDUFMA), and $16.6 million under the Mammography Quality Standards Act (MQSA). FDA also plans to collect $6.6 million in fees for export certification and color additive certifications. The remaining amount, $5.0 million, represents proposed law user fees for the Animal Drug User Fee Act (ADUFA).
|
FY 2004 Budget Request - User Fees |
|
|---|---|
|
PDUFA |
249.8 |
|
MDUFMA |
29.2 |
|
MQSA |
16.6 |
|
Export and color additive certifications |
6.6 |
|
Proposed new user fees |
5.0 |
|
Total User Fees |
307.2 |
The Prescription Drug User Fee Act (PDUFA) authorizes the collection of user fees from regulated industries for reviewing drug applications. In 1992, Congress passed the Prescription Drug User Fee Act (PDUFA). This was reauthorized by the Food and Drug Modernization Act of 1997 and again by the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. PDUFA authorized FDA to collect fees from companies that produce certain human drug and biological products. Any time a company wants the FDA to approve a new drug or biologic prior to marketing, it must submit an application along with a fee to support the review process. In addition, companies pay annual fees for each manufacturing establishment and for each prescription drug product marketed. Previously, taxpayers alone paid for product reviews through budgets provided by Congressional appropriations. In the new program, industry provides the funding in exchange for FDA agreement to meet drug-review performance goals, which emphasize timeliness. As a result of PDUFA, approval time for standard new drug applications has fallen from 22 months in 1994, to 14 months in 2001. In addition, the approval time for priority new drug applications has fallen from 15 months in 1994, to 6 months in 2001. FDA will continue to improve its review performance and focus on measures to reduce the overall development time for drugs and biologics.
The Mammography Quality Standards Act (MQSA) authorizes FDA to collect user fees from regulated industries for inspecting mammography devices. The revenue generated under MQSA enables FDA and state authorities to annually inspect about 8,750 mammography facilities. To insure that women continue to have access to quality mammography, an effective tool in reducing breast cancer mortality, FDA is requesting a $464,000 inflation-based increase in MQSA user fees.
ADUFA is a proposed user fee that will require new animal drug applicants, sponsors, and manufacturers to incur a fee to expedite their respective applications. ADUFA will strengthen the animal drug review process, by providing a cost-efficient, high quality review process that is predictable and performance driven. The passage of ADUFA would enable FDA to work toward meeting the aggressive goal of reviewing 90 percent of specific review types completed within statutory (or lesser) time frames, and decrease the backlog of pending applications.
The Medical Device User Fee and Modernization Act of 2002 (MDUFMA) amends the Federal Food, Drug, and Cosmetic Act to provide FDA important new responsibilities, resources, and challenges.
MDUFMA has three particularly significant provisions:
FDA is undertaking many new efforts to help consumers make better-informed decisions. These include better labeling of foods and drug products, clearer guidance for direct-to-consumer advertising for pharmaceutical products, and new enforcement initiatives against dietary supplement manufacturers who make health claims without scientific foundation.
Better labeling: There is a growing interest among consumers in understanding how their diet and other activities can influence their health. Accordingly, FDA strives to make sure that consumers have access to the latest information, presented in a way that is not misleading, when they make decisions about their diet. It is a public health imperative to get accurate health information to consumers to use in their daily lives with the rising rates of obesity and the resulting consequences for chronic conditions such as diabetes and heart disease.
In December 2002, the FDA announced the Consumer Health Information for Better Nutrition initiative which is designed to encourage the flow of high-quality, science-based information regarding the health benefits of conventional foods and dietary supplements to consumers. Individual dietary choices are important in preventing disease and improving the public's health. The goal of this initiative is to facilitate the flow of information to consumers concerning the role of sound dietary practices in achieving and maintaining good health, while assuring that this information complies with legal requirements that it be truthful, non-misleading, and based on sufficient scientific evidence.
Direct-to-Consumer Advertising: The FDA oversees the advertising of prescription drug products under the Federal Food, Drug, and Cosmetic Act and related regulations. That means the agency must ensure that prescription drug information provided by drug firms is truthful, balanced, and accurately communicated. This is accomplished through a comprehensive surveillance, enforcement, and education program, and by fostering better communication of labeling and promotional information to both health professionals and consumers.
Enforcement activities: The FDA is committed to pursuing Federal Food, Drug, and Cosmetic Act violations by undertaking enforcement activities as needed, such as warning and untitled letters, injunctions, recalls, arrests, and convictions, particularly in areas related to the most serious threats to public health, such as arrests and convictions on criminal charges involving potentially dangerous activities and actions against manufacturers making misleading claims about product risks and benefits. FDA's most decisive actions, those that remove products from the market and that bring criminal charges against people who would harm the public, have increased the most.