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SENATE BUDGET RESOLUTION INCLUDES $100 MIL. USER FEE PROVISION FOR FDA; USER FEES NOW FACE KENNEDY, HATCH HURDLE IN LABOR & HUMAN RESOURCES CMTE.

Executive Summary

The Administration's $100 mil. user fee proposal for FDA's FY 1990 appropriations is included in the budget resolution that cleared the Senate Budget Committee on April 19. The resolution is a product of weeks of negotiations between the Bush Administration and a bipartisan congressional group. The resolution will go before the full Senate when recess ends May 1. The House Budget Committee is expected to begin consideration of the budget resolution during the week of April 23-27. The $100 mil. user fee provision has been forwarded to the Senate Labor & Human Resources Committee where it will face stiff opposition from Sen. Kennedy (D-Mass.) and Sen. Hatch (R-Utah), who have openly stated their disapproval of the proposal. Sen. Kennedy's staff indicated that the senator will continue to oppose FDA user fees throughout the budget process. At a Senate Appropriations/Agriculture Subcommittee hearing April 20 on the FDA budget, Sen. Burdick (R-ND) noted that "despite concern by many senators on this subcommittee, it appears that user fees could still be on the table in the budget committee negotiations." The Senate hearing was essentially a rerun of the House Appropriations/Agriculture Subcommittee hearing April 13 ("The Pink Sheet, April 17, p. 5). Among the witnesses who testified before both committees were Pharmaceutical Manufacturers Association President Gerald Mossinghoff, Proprietary Association Senior VP and General Counsel Daniel O'Keefe, and Industrial Biotechnology Association President Richard Godown. Mossinghoff reiterated PMA's opposition to user fees in his recommendation that the FDA budget authorization be increased by $50 mil. in the upcoming fiscal year. Asked by Burdick how the $50 mil. could benefit FDA, Mossinghoff replied the additional funding "could be used for retaining highly skilled technical and scientific personnel" as well as upgrading Parklawn's "substandard" facilities. Godown repeated concerns that smaller biotech businesses in particular will suffer a negative impact from user fees. His testimony points out that "requiring an up front payment of a user fee is an unwarranted burden that must be added to the already high costs of research and development which falls so heavily on the small companies of our industry." Representing the Coalition for FDA Resources, Kenneth Graziano of the Association of Biotechnology Companies requested that the $14.5 mil. dedicated for biotechnology projects in the Bush Administration's proposed budget be used to increase FDA staffing. "One thing the subcommittee could do to advance the development and commercialization of biotechnology products," Graziano said, "is to direct that these funds be used to assure adequate FDA staffing with appropriate education and experience in this area." Although the Bush budget dedicated $14.5 mil. toward biotechnology, the Office of Management & Budget is not permitting those funds to be used for new hiring. "The need for additional staff with biotechnology expertise is unabated throughout all areas of the agency," Graziano declared. The $14.5 mil. could translate into "some 200 additional personnel," he said. The overall full-time equivalent (FTE) staff level proposed by the Bush Administration for 1990 would represent a decrease of 14% from staffing levels in FY 1979, Graziano pointed out. He added that FDA had 8,179 FTEs in FY 1979, and that the proposal for 1990 is for the agency to have 7,001 FTEs, excluding AIDS activities. The coalition is specifically requesting that FDA have an FTE floor of at least 7,400. The coalition also is advocating a $50 mil. increase in FDA's budget above the $570 mil. proposed by the Bush Administration. The additional monies are needed for FDA's infrastructure deficiencies, including personnel, training, facilities and equipment, Graziano said. The group opposes the Administration's suggestion to implement user fees. The FDA Council, another group established to seek full funding for FDA, also testified before the Senate subcommittee. The Council is recommending that FDA be provided with $50 mil. above Bush's budget request. The council also asks that an increase of $100 mil. "be used to restore program and operating costs assumed by the user fee proposal in the budget request." Cambridge BioScience Chairman Gary Buck also noted FDA's substantial reduction in personnel over the last 10 years. He said that "if one did an analysis of the past 10 years and calculated the impact in man hours of the following: personnel cuts; estimates of staff necessary to carry out the mandates of the 23 new bills passed; and estimates of increased workloads of the agency as a result of AIDS, biotechnology and other fields of medical research . . . one could allow that the FDA, at its present staffing levels, is about 2,000 employees short."
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