Summary of the Alliance webinar on “How FDA Is Funded.”

On February 2, 2022, the Alliance for a Stronger FDA held its “How FDA Is Funded” webinar featuring Alliance Board Member Emily Holubowich and Executive Director Steven Grossman. The PowerPoint slides used in this webinar can be found here and the transcript is here.

This webinar is particularly timely because the FY 23 appropriations process and the five-year renewal of user fee agreements will be considered by Congress this year.

FDA funding is complicated. The agency benefits from multiple funding sources, but this also can create confusion about which sources of money support which activities.

The presentation first reviewed the status of FY 2022 FDA (current year) appropriations. The Alliance’s recommended “an increase of not less than $200 million in FY 22.” Both the House and Senate positions are consistent with that. The exact amount will depend on Congressional negotiations, which are covered in-depth in the “Advocacy at a Glance” (top) section of every Friday Update.

Reviewing the five sources of FDA funding, Mr. Grossman spoke about BA (taxpayer-funded) appropriations, which were funded at $3.2 billion in FY 21. These appropriations can be used to meet requirements under law and regulations, items highlighted in the President’s Budget Request, and other provisions identified in appropriation bills, committee reports, and conference agreements. These are all-purpose funds that are available to support all FDA functions (except for tobacco control programs that are solely funded by user fees).

Second, medical product user fees were $1.9 billion in FY 2021. There are seven such programs and funds may only be used to conduct the activities specified in the user fee agreements. None of these funds are available for general use. User fees are negotiated and renewed on a five-year cycle and most such programs are slated for Congressional renewal this year.

Third, tobacco user fees were approximately $700 million in FY 21. Tobacco programs are totally paid for by user fees; no BA funding is provided. The Alliance excludes consideration of tobacco programs from its analyses because their inclusion distorts the perception of how much of FDA’s historical food and medical product programming is BA versus user fees.

Fourth, special funding is provided for 21st Century Cures initiatives. After a start-up year of $20 million, the program has brought FDA between $50-75 million each year for 9 years, ending in 2025. Neither BA nor user fees are provided. These monies are derived as “savings from changes in mandatory programs.”

Finally, no-year funding has been provided for special needs. For example, $500 million has been provided in response to COVID. Other examples of no-year funding in the past have included medical countermeasures, opioids, and seafood safety.

Looking at FDA funding from a functional standpoint (FY 21 numbers used), food safety funding is composed of $1.421 billion in BA and $16.4 million in user fees. Medical products received $1.716 billion in BA plus $2.027 in user fees. Rental costs received $425 million in BA, while buildings and facilities received $13 million in BA.

Mr. Grossman concluded with a review of the broad range of FDA’s responsibilities, and the Alliance’s key point of supporting a strong and well-funded FDA.

During a question-and-answer period, Mr. Grossman addressed:

• The impact of a CR – He repeated that a government shutdown is not expected; a short-term extension of the CR is most likely. The limitations of operating under a CR – no additional funding, no new program initiatives, and other restrictions – have frequently been discussed in the Alliance’s Friday Update.

• What Americans need to know to justify continuing increases in FDA’s BA –FDA costs Americans $10 per person per year. For that we have safe foods and safe and effective medications, and support for innovation in both areas. With respect to urgent and immediate investment, the FDA budget request for data technology modernization stands out.

• Thoughts on 21st Century Cures 2.0 –The Alliance’s mission is a strong, well-funded FDA. We take positions on funding, but not on authorizing legislation.

The Alliance is planning many additional webinars this year. Next up will be a series with FDA Center Directors and the Associate Commissioner for Regulatory Affairs. Please pay attention to Friday Update for announcements.

Editorial Note: The week’s Analysis and Commentary section was written by the Alliance’s Executive Director, Steven Grossman.