No Real New Money for Drug Regulation

Perhaps the Food and Drug Administration was fortunate to receive any budget boost from the cash-strapped Obama administration for fiscal year 2011, but there’s little real new money to support drug review and oversight. The spending plan for the federal government unveiled last month proposes to increase appropriated funds for FDA by $146 million, bringing the total budget to $2.5 billion. If you add $1.5 billion in user fees, FDA will have $4 billion to support all of its programs. That’s a 25 percent increase, according to the White House, but appropriated funds rise only 6 percent—barely enough to keep pace with rising costs.

The budget total includes $667 million in fees from pharma and biotech companies under the Prescription Drug User Fee program (PDUFA), along with smaller fees to support medical devices, animal drugs, and mammography standards. Congress has also approved $450 million in payments from tobacco companies to support the new tobacco oversight program. But the agency’s full budget assumes that legislators will approve another $220 million in user fees to bolster food oversight and inspections, $38 million to expand generic drug regulation, and $27 million for inspections that have to be repeated. There is a good chance that Congress will approve a large food safety bill with the added user fees; the measure has already passed the House and is slated for Senate consideration. But if that program falls by the wayside, FDA would be left with a big hole in its spending plan.

As usual, the administration’s 2011 budget plan highlights a number of pet projects. Food and drug safety is at the top of the list, with additional funds earmarked for better oversight of imports, an improved electronic drug registration and listing system, and additional inspections of high-risk foreign facilities. There’s also money to expand inspections of clinical research sites, to build FDA’s Sentinel Surveillance system, and to monitor vaccines and other high-risk products.

Another budget theme is enhancing regulatory science at FDA. The Advancing Regulatory Science Initiative would improve the agency’s assessment of biosimilars and medical products based on stem cells or nanotechnology. Funding will help FDA scientists keep up with advanced technologies and provide industry with standards that support innovative product development. But there’s only $25 million on the table to accomplish all of these goals, and that includes $4.5 million for the Critical Path Initiative to support biomarker validation, modernize clinical trials, and develop new tools for drug assessment.

The budget plan requests $850 million for the Center for Drug Evaluation and Research (CDER), which is $100 million less than the amount proposed by the Alliance for a Stronger FDA, a broad coalition that has been pressing for increased funding for the agency. Half of the amount would come from user fees, highlighting the Center’s ever-increasing reliance on industry payments to support all its activities.

The rising user fees trouble some members of Congress and some FDA officials. But no one has a better source of funds to support FDA’s expanding responsibilities and mandates. So the fees will grow in most areas.