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Executive Summary

Senator Hatch's (R-Utah) FDA revitalization bill will seek financial contributions from the health care industry for agency improvements. Planned for introduction the week of April 17, the legislation proposes "safeguards" to prevent conflicts of interest while seeking private sector funding. Hatch discussed his bill in testimony at an April 13 FDA budget hearing before the Senate Appropriations/Agriculture Subcommittee. Pointing out that FDA is "scattered among 23 different buildings at seven different sites in the Washington area," Hatch said his bill will authorize funds for the consolidation of the agency into a single building or campus. "I ask the committee to appropriate funds for this purpose," Hatch stated. "However," he said, "I also believe we should call on the private sector to contribute financially to this consolidation." The senator added: "The legislation I will introduce requires important safeguards to be put in place to avoid any potential conflicts of interest with respect to private support of a new facility." The idea of private contributions to the agency was floated by Hatch earlier this year as a way to boost agency resources in light of federal budget constraints. However, the conflict of interest problems posed by such an arrangement were quickly pointed out by PMA ("The Pink Sheet" Feb. 27, T&G-1), and the association is continuing to push for full federal appropriations for the agency. FDA is also worried about the conflict of interest problem. Commissioner Young expressed his concern at an April 6 budget hearing before the Senate Appropriations/Agriculture Subcommittee. He said the agency currently feels that "the fairest way" to supplement its budget "is a user fee" ("The Pink Sheet" April 10, p. 3). However, Young said he is considering user fees on imports as an alternative to product review fees. Hatch's bill will also provide: "the establishment of a Senior Biomedical Science Service to increase the pay of our senior scientists, retention of the fees currently collected for Freedom of Information [Fol] requests, and it will authorize the training of personnel in regulatory review medicine and food technology," the senator explained. According to a summary of provisions in the draft bill, the senior scientific service provision will direct the payment of up to 110% of civil service pay for top scientists at FDA as well as at the National Institutes of Health, the Alcohol, Drug Abuse and Mental Health Administration and the Centers for Disease Control. FDA records show that the agency received $ 451,000 from FoI charges in 1988. However, receipts currently go to the U.S. Treasury, rather than back into the agency. Agency receipts represent only one-tenth of actual processing costs for FoI requests in 1988: costs for the 40,000 requests received were $ 5.6 mil. According to the draft, the bill will authorize funds to provide small business with technical assistance. The bill will also set up a biotechnology demonstration program to allow FDA to use existing public laboratory facilities for public/private sector cooperatives. The bill will also "begin to move the FDA into more rapid computerization," Hatch told the Senate subcommittee. He pointed out that FDA's ability to review NDAs would be greatly enhanced if the agency had more and better computer equipment. The senator asked the subcommittee to assist by appropriating additional funds "so that we can automate FDA." Specifically, Hatch urged the subcommittee "to appropriate a total of $ 562 mil., an increase of $ 89 mil. over the current appropriation" for FDA. Bush's proposal for the agency requested a total of $ 512 mil. (excluding AIDS funding), $ 100 mil. of which would be derived from user fee revenues.

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