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The FDA Budget FY 18: Where Does the Money Come From?

August 4, 2017

FDARA is the product of a 3-year process that began with FDA hearings and negotiations and has culminated with Congressional passage of legislation. It’s been a long haul. Applause (loud, please) for the Members of Congress and staff who have labored to bring this about and for the hundreds of individuals and organizations that have participated along the way.

Passage of FDARA makes it timely to re-evaluate a question that the Alliance is frequently asked: how much of FDA’s budget comes from taxpayer sources (BA appropriations) and how much from industry sources (user fees). As is so often the case, the answer depends on how you frame the question.

The Alliance always calculates using the FDA’s total non-tobacco budget, which for FY 18 is likely to be $4.474 billion. Our rationale is twofold. First, tobacco control programs at FDA were created because of industry user fees and are totally funded by them. The programs have never been premised on taxpayer funding. Second, when FDA funding is characterized by BA vs. user fees, it is food and drug programs that the listener is thinking about, not tobacco. If you include tobacco user fees, they skew the numbers and distort what people really want to know (some variant of: how much do medical product companies contribute to FDA’s programs).

Excluding tobacco user fees, budget authority (taxpayer) appropriations funds 62% of the agency and medical product user fees support 38%. This is, of course, an average. Different parts of the agency have higher or lower percentage funding from each source.

If you include tobacco user fees, then 47% of FDA’s support comes from industry user fees. The 9% shift just by adding in tobacco user fees exemplifies why including them does not provide an accurate picture. All the details are in the chart below.

FY 18
Senate
Approp. Bill

Approps committees assumed enactment of FDARA

BA Approps  — Total

$2.760 billion
(62%)

The amount in both House and
Senate bills, not yet definite

PDUFA, GDUFA, BsUFA, MDUFA, Animal UFAs

$1.714 billion
(38%)

PDUFA = $937 million
GDUFA = $497 million
MDUFA = $193 million
BsUFA = $54 million
Animal UF = $36 million

FDA Non-tobacco Budget

$4.474  billion

This is the number that counts

Tobacco User Fees

$0.672 billion

Tobacco programs at FDA
always funded by user-fees;
never received taxpayer dollars

Total FDA Budget

$5.146 billion

With tobacco, user fees are
47% of FDA’s budget

Editorial note: The Analysis and Commentary section is written by Steven Grossman, Deputy Executive Director of the Alliance for a Stronger FDA.

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