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Where Does $225 Million Come From for FY 15?

April 4, 2014

It was hard not to like Senate subcommittee chair Mark Pryor’s opening comments at the Senate hearing on FDA’s FY 15 budget request. His theme — the Administration request for FDA is modest in the face of substantial and growing responsibilities — was one we had heard the previous week from House subcommittee chair Aderholt and others at the House hearing. And other Senators jumped in yesterday to echo it as well.

Senator Pryor particularly honed in on how little of the request was appropriated dollars ($24 million) and how much was proposed user fees ($240 million). He pointed out that the proposed user fees were outside the committee’s jurisdiction (handled by authorizing committees) and unlikely to be adopted this year. Subcommittee ranking member Roy Blunt took the point a little further, wondering how realistic the proposed fees were when this was the fourth budget cycle in which they were being proposed and there was no evidence of industry or Congressional interest.

In the face of this line of questioning, the Commissioner made a small, but we think very significant, retreat. As reported by Politico (and heard by us as well), she said: “FDA needs more money to adequately keep America’s food supply safe, regardless of how it gets it” (emphasis added). She continued by saying FDA can continue issuing rules and working on the regulatory process, but “it will be impossible to effectively to implement these important rules without a significant increase in resources.” According to Politico, she added: “If it comes from budget authority, that would be terrific.”

This provides us with support for one of our key advocacy points about food funding: the Administration is clear about a need for a very large increase (over $200 million), but has not provided any realistic means to fund it. Budget authority appropriations are the only means to generate the funds.

Somewhat less dramatically, the Commissioner’s testimony also provided additional ammunition for the case for greater funding for medical product programs. There was considerable discussion about increased responsibilities — new mandates, globalization, etc. — but the money to do this is clearly not in the President’s budget. It will also need to come from increased budget authority appropriations that are not in the President’s request.

Even the one medical products program for which the President is claiming to have provided funding — $25 million to implement new law requirements for regulation of pharmaceutical compounding — was clearly not being funded directly, since the proposed appropriation for all medical product programs nets to zero. The Commissioner pointed to $15 million that won’t be spent on White Oak Consolidation as a primary source of the funds, with various cost-savings in other areas filling in the remainder. However, some of those “saved” monies will be needed to pay for increased rent costs. Further, funds will come from unallocated and unexplained cuts in other medical products programs, including $1 million from CBER and nearly $3 million from CDRH.

Note: This week’s analysis and commentary was written by Steven Grossman, the deputy executive director of the Alliance for a Stronger FDA

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