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Executive Summary

Sen. Hatch's FDA trust fund proposal would restrict use of the funds donated by private sources to the purchase or lease of new facilities. The Utah Republican unveiled the trust fund idea in his FDA revitalization bill, introduced as S 845 on April 19. Hatch has been promoting the idea of supplementary private funding to help modernize FDA for several months. The bill embodies that rhetoric and defines the specific use for industry donations. Hatch has lined up an impressive list of 12 bi-partisan sponsors, including four important committee or subcommittee chairmen: Labor & Human Resources Committee Chairman Kennedy (D-Mass.); Appropriations/Agriculture Subcommittee Chairman Burdick (D-MD); Small Business Committee Chairman Bumpers (D-Ark.); and Judiciary/Antitrust Monopolies Subcommittee Chairman Metzenbaum (D-Ohio). Metzenbaum's support may be important as an indication that the bill has the de facto acquiescence of the consumer advocacy groups. Metzenbaum frequently appears to take his lead on FDA issues from the Health Research Group. His support for the bill may imply that the proposal has cleared any conflict-of-interest concerns from that group. Other cosponsors are: Cochran (R-Miss.); Thurmond (R-SC); Wilson (R-Calif.); Kassebaum (R-Kansas); Mikulski (D-MD); Jeffords (R-VT); Dodd (D-CT); and Coats (R-Ind.). The bill was referred to the Labor & Human Resources Committee. In April 19 introductory statement accompanying the bill, Hatch reiterated his exhortation to industry to supplement FDA's budgeted resources. The major industry groups have been reluctant to agree to the call for funding. One of the primary concerns has been that any funds provided might be used by FDA to offset budget shortfalls -- i.e. money collected as extra funding might be diverted to make up for cutbacks in standard operating funds. "In Title I," Hatch declared, "I propose to establish a trust fund to provide the opportunity for the private sector to join hands with the federal government in paying for a consolidated facility for the FDA." Specifically, the bill directs the Secretary to "establish a trust for public and private sector contributions for the purchase or lease of a facility to consolidate facilities of the Food and Drug Administration that are located in the Washington, D.C. area." To assure that donations are not restricted exclusively to cash, the bill would permit HHS to "accept gifts or donations of services or property, real or personal. . ." The bill also authorizes $18 mil. for "expanded efforts to help small businesses comply with the regulations imposed by the FDA," and another $10 mil. "for a public/private sector partnership in biotechnology." The legislation further establishes a permanent "funding floor of $500 mil." for FDA -- a figure below the Bush budget but one which does not rely on user fees. HHS is directed under the bill to "make grants to, or enter into contracts with, public or nonprofit academic institutions (including schools of medicine, dentistry, pharmacy, and food science) to enable such institutions to develop core curriculum programs that will be used to train individuals in the field of regulatory review." The bill authorizes $4 mil. for fiscal 1990 for the program. The program requires postgraduate service with the FDA as part of the loan repayment. In addition, the bill: sets up a system under which senior FDA scientists could be paid at up to 110% of their current salary levels; authorizes funding for "greater automation" of the agency; and allows FDA to retain the proceeds from user fees collected from Freedom of Information requests. These revenues are to be used by the agency specifically to run its FoI program. The revenues currently go to the Treasury Department.

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