Budget impasse imperils FDA user fee programs

The deficit reduction plan facing Washington lawmakers could derail the FDA's newly approved user fee program slated to provide the agency with $6.4 billion over 5 years if automatic budget cuts go into effect in January.

The new user fee programs, which are slated to collect more money from branded--and, for the first time, generic drugmakers--as well as medical device makers, can't be collected unless the agency also gets a certain level of funding from lawmakers, an FDA spokesperson acknowledges to Bloomberg, a figure determined by a formula. If the automatic budget cuts go forward, the FDA is slated to have its budget automatically reduced 8%, or about $200 million next year. It is not clear whether that is enough to keep the FDA from starting to collect fees from drug and devicemakers.

"I personally doubt very seriously that the White House is going to let sequestration affect FDA because of the serious mission that it does," Alan Goldhammer tells Bloomberg. Now a consultant, he previously was a vice president with the Pharmaceutical Research and Manufacturers of America (PhRMA).

The new user fee programs were expanded so that the agency could meet an industry goal of approving drugs more quickly, as well as provide it with extra funds for things like increased inspections of foreign manufacturers. It was one of the few pieces of legislation this year to get bipartisan support.

The "sequestration" program was Congress' way of getting past a deficit fight earlier this year. The idea is that if it could not reach an accord on how to cut the deficit, across-the-board reductions would occur. The Democrats and Republicans have been unable to find common ground on whether deficit reduction should include tax increases.

That impasse "could result in the loss of whole user fee programs, programs that have become essential to public health and medical product innovation," Karen Riley, an FDA spokeswoman, tells the publication.

- read the Bloomberg story

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