SEN. HATCH PURSUING PUBLIC/PRIVATE PARTNERSHIP FUND TO BOOST FDA RESOURCES; AGENCY BUDGET PROPOSAL PREDICATED ON USER FEES, COM. YOUNG DEFENDS CONCEPT

Sen. Hatch (R-Utah) and FDA Commissioner Young are turning up the heat for sources of outside funding for FDA to enhance agency resources. Hatch is floating the idea of a public/private partnership fund. After mentioning the idea in late January at a section meeting of the Pharmaceutical Manufacturers Association, the Utah Republican reportedly continued his discussions with PMA President Mossinghoff on Feb. 3. Hatch has also conveyed his interest in a fund directly to several senior execs in the industry. The senator publicly discussed the foundation idea at a Feb. 7 congressional hearing. During a Senate Labor & Human Resources Committee oversight hearing on government resources for AIDS programs (see related story, p. 12), Hatch reported that he "challenged" the pharmaceutical industry "to come up with some way that we might have a public/private partnership, without conflict of interest, that might help raise funds to help FDA have what it needs to do this job." PMA is expected to discuss the foundation concept at an upcoming board meeting during the week of Feb. 13-17. Hatch asked the association to develop a policy position by March 1. PMA is reportedly concerned that an outside funding scheme would be used by government budget planners to pay for normal operating expenses instead of special efforts, such as improving the quality of the FDA work environment or computer facilities. Hatch asked FDA Commissioner Young to comment on the idea of a private foundation during the Feb. 7 hearing. Young replied: "I agree with you that some kind of public/private resources, some sort of trust ]fund[, might be of great value because it might help keep our taxes down and bring in the needed resources." Young has reportedly suggested the idea of a foundation in recent months to groups interested in more funding for FDA. The committee's ranking minority member declared that he and Chairman Kennedy (D-Mass.) have discussed the shortage in FDA resources, "and we'd like to come up with some reasonable way to do what really needs to be done with this most special, important agency." Hatch's interest in the private funding project is significant as an indicator of the currency of the idea in Hatch's view of the FDA funding issue and in light of the upcoming renewed debate over user fees as a way to fund the FDA budget. Hatch has firmly opposed user fees in the past and his staff says that he maintains that position. The proposed FDA funding for fiscal 1990, however, appears to leave a hole in agency resources, which may necessitate outside funds or user fees if Congress cannot be cajoled into a higher budget allocation for the agency. Like the Reagan Administration budget that it supersedes, President Bush's fiscal 1990 funding proposal relies on user fee revenues to provide a portion of FDA resources. The Reagan Administration projected $ 100 mil. in revenues from user fees. According to agency budget officials, funding for all FDA programs, except those for AIDS, is frozen by the new Bush budget proposal at fiscal 1989 levels. If that figure includes user fee revenues, then an effort this year against user fees will have to include an effort for increased budget funding or FDA will be asked to operate with a $ 100 mil. cut on top of inflationary changes. At the Feb. 7 hearing, Young spoke up in favor of the proposal to charge pharmaceutical companies user fees for FDA review of new product marketing applications. Citing estimates that the drug industry spends an average of $ 25 mil. per day on R&D, the commissioner pointed out that, by comparison, the user fee charges being contemplated are minimal. "A single day's less research per year would provide roughly the amount of resources to cut the approval time at FDA in half three years after" user fees are authorized, Young said. "We're not talking big bucks." PMA has historically opposed user fees when revenues would be applied to the overall FDA budget. The association reasoned that under such circumstances, the industry's payments would be compensating for the budget deficit. The association has said it would support the concept only if it could be assured that the agency were fully funded and user fee revenues were allocated to enhancing the new drug review process. Although the Reagan Administration proposed a succession of user fees in budgets since fiscal 1984, Congress consistently showed almost no interest in the idea and has not touched bills that authorize FDA to retain for its own coffers revenues from fees collected.