FDA's Proposed BA and User Fee Funding for FY 13

The Alliance was created to advocate for increased public funding of FDA. We distinguish between budget authority (BA) appropriations, which are funds paid from the general treasury, and user fees, which are paid by industry.

BA funding is the core of the agency, the monies the agency needs to fulfill its public health and regulatory mission. User fees supplement the BA appropriations and are intended to provide additional resources to fund specific activities listed in the user fee agreements and laws.We are often asked about the difference between the two and the position of the Alliance on FDA having two sources of revenue. Our reply is that FDA should be a publicly funded agency, while at the same time we acknowledge the valuable role that user fees have, and continue to, play. Especially in these tight budgetary times, we are particularly concerned that a balance be maintained between the two and that the Congress continue to increase the public, BA funding of FDA.Unfortunately, the President’s FY 13 budget request is not balanced. The Administration is requesting additional funds for FDA, but 98% of the increase would come from existing, reauthorized and new user fees. This has prompted questions from the Hill, media and Alliance members:

• How much of FDA activity is funded by user fees (FY 12)?

• How much of FDA activity would be funded by user fees if the President’s request were to be adopted in its entirety (FY 13 requested)?

For FY 12: the FDA’s total budget is 25.3% user fees, excluding tobacco user fees. We usually exclude the tobacco center because it was intentionally created to be 100% user fee funded.  If you include the tobacco fees, FDA is 34.6% user fee funded.

Under the President’s FY 13 request:  the FDA’s total budget would be 36.8% user fees, excluding tobacco fees. If you include the tobacco fees, FDA would be 43.9% user fee funded.The President’s numbers come with at least two caveats. First, the fate of the new proposed user fees is unknown. It seems likely that some will become law and others will not. Second, the President’s request does not reflect the higher amounts in the FDA’s final MDUFA proposal (agreement with industry was reached after the budget request was put together).

FY 12 and President’s Proposed FY 13 Request: Total User Fee Funding and Percentage of Total Funding

FY 12 Enacted

FY 13 President’s Proposed FDA Funding Request

     Existing  New   Source of New           BA Total

$2506 M

$2517 M

              USER FEES         PDUFA

$  702 M

$  713 M

  Generics UF $299 M; Biosimilars UF $20 M; Medical Prod. Reinspection UF $15 M  

$  334 M

MDUFMA

$    58 M

$    70 M

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  Food

$    27 M

$    28 M

$   250 M

Food Establish. Registr. Fee $220 M; Food Contact UF $5 M; Cosmetics Rev. UF $ 19 M; Int. Courier UF $6 M  

All others

$    62 M

$    69 M

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  User fees w/o tobacco: Total and % of funds

$ 849 M

$   880 M

$584 M

$1464 M

25.3%

36.8%

  Tobacco

$ 477 M

$   505 M

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  User Fees inc. tobacco: Total and % of funds

$1326 M

$1385 M

$ 584 M

$1969 M

34.6%

43.9%

Note: This analysis and commentary is written by Steven Grossman, the Deputy Executive Director of the Alliance for a Stronger FDA.