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FDA USER FEE REVENUES WOULD BE INVESTED IN PART IN AGENCY PRODUCT REVIEW ACTIVITIES UNDER HHS PROPOSED LEGISLATION, TRANSMITTED TO HILL APRIL 3

Executive Summary

The Health & Human Services Department's proposed legislation for the implementation of user fees at FDA "would credit to the FDA appropriations account that portion of collections based on costs incurred by FDA," the bill states. HHS sent the proposal to Capitol Hill on April 3, but the legislation has not been introduced by a congressional sponsor. The HHS proposal adds parenthetically: "That portion of collections based on costs to the federal government other than FDA would be deposited as miscellaneous receipts of the Treasury." PMA has continued to express skepticism over whether receipts from user fees would actually be credited to relevant FDA activites. Under the proposal, user fee revenues credited to FDA would be available without fiscal year limitation, but subject to "the extent provided in appropriations acts, for FDA's administrative costs connected with carrying out the activities for which the fees were collected." The bill adds that "fees collected for each type of review activity could be used only for costs connected with carrying out that type of activity." User fee charges could be set to cover up to the full cost incurred by the government in processing the request ("The Pink Sheet" March 27, T&G-4). According to the bill, such costs could include: "the conduct of scientific research; development of methods of analysis; purchase of chemicals, fixtures, furniture, and scientific equipment and apparatus; acquisition, maintenance, and repair of real property; and expenses of advisory committees." Charges would be set to cover "costs of review of requests for exemptions with respect to products intended solely for investigational use," HHS Secretary Sullivan said in a cover letter to House Speaker Jim Wright (D-Tex.). "The bill does not require fees for investigational use reviews which do not result in an application for marketing approval," Sullivan added. User fees have been proposed by the Administration four out of the past five years, but have never made it through Congress. This year, user fees have already been opposed by key members including Rep. Waxman (D-Calif.), chairman of the House Energy & Commerce/Health Subcommittee and Sen. Kennedy (D-Mass.), chairman of the Senate Labor & Human Resources Committee. This year's proposal "would become effective upon enactment, but no fees authorized by the bill would be charged until implementing regulations had been promulgated," Sullivan pointed out. FDA Commissioner Young recently expressed concern that the promulgating regulations may not be out in time to meet the federal government's fiscal 1990 budget deadline, thereby leaving FDA with a substantial shortfall in funds ("The Pink Sheet" April 10, p. 3).
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