Executive Summary

HOUSE BUDGET RESOLUTION FOR FDA DOES NOT CONTAIN USER FEES and increases the agency's appropriations for fiscal 1990 by $ 50 mil. Unlike the budget resolution passed by the Senate Budget Committee on April 19, the House resolution does not include a provision for $ 100 mil. in user fee revenues for FDA. The $ 50 mil. was added to the agency's budget baseline, and is separate from additional funding for AIDS-related activities. The House resolution provides $ 1.9 bil. government-wide in funding for "programs to treat and combat the spread of AIDS." The funding is to be allocated "across functional areas of the budget." The resolution was passed by the House Budget Committee April 27 and is being forwarded to the Appropriations Committee. The user fee provision in the Senate resolution must first be considered by the Senate Labor & Human Resources Committee, where it is likely to face stiff opposition from committee Chairman Kennedy (D-Mass.) and Sen. Hatch (R-Utah), the ranking minority member ("The Pink Sheet" April 24, p. 8). The full House and the Senate are expected to take up their respective budget resolutions this week. Following floor consideration, the resolutions will be reconciled in a joint budget conference. The $ 50 mil. increase and the decision to exclude user fees are in line with recommendations made recently by key congressional members including Energy & Commerce/ Health Subcommittee Chairman Waxman (D-Calif.). On this issue, the major trade groups, including the Pharmaceutical Manufacturers Association, the Health Industry Manufacturers Association, are in agreement with Waxman. Medicare savings of at least $ 2.3 bil. in fiscal year 1990 are called for in the House budget resolution. Medicare will cover outpatient costs for immunosuppressive and home I.V. drugs beginning Jan. 1, 1990. The report accompanying the House resolution suggests that hospital payments be protected from the cuts. The House report will also include recommendations to establish a 15-member National Commission on Medicare, which would be modeled on similar commissions convened to develop proposals to reform Social Security. The commission was proposed by Rep. John Kasich (R-Ohio). Members would be appointed by the President, the Senate and the House. The Senate Budget Committee's resolution was officially filed April 27. Its report indicates that Medicare contractor and administrative activities should receive increases of $ 200 mil. over fiscal year 1989 levels.