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Executive Summary

FDA FY 1990 BUDGET: GENERIC DRUG PROGRAM ALLOCATED $ 4 MIL. for improvements under a compromise budget for the agency approved by the House and Senate on Nov. 16. House and Senate conferees said in a report on the budget bill that they were allocating $ 4 mil. to improve the ability of the program to more adequately review and monitor generic drugs. Conferees suggested that additional funds may be appropriated in the future. The allocation is specified in the conference report accompanying HR 2883, the fiscal 1990 agriculture appropriations bill, which includes the FDA budget. The report states: "Conferees are aware of a pending budget amendment to address generic drug problems. Accordingly, the conference agreement includes up to $ 4 mil. for quality control, surveillance, review, and tracking of human generic drugs. Congress will consider other action upon receipt of an official budget request." An Administration proposal to increase the generic drug program budget is reportedly under consideration by the Office of Management and Budget. A draft HHS legislative proposal circulated in October contemplated raising money for improved facilities, research and analysis in the generic drug program by establishing generic drug user fees ("The Pink Sheet" Oct. 23, p. 7). The department has also said it would consider proposing user fees to fund a variety of heightened regulatory measures in the department's "action plan" for the generic drug division. No HHS proposal has gone to Congress as yet. The report notes that "conferees are very concerned with reports regarding the generic drug program. The public expects and should receive safe and effective products while the industry is treated in a fair and even-handed manner." Conferees direct FDA to "report details of its progress with these directives as part of its 1991 budget justifications." The budget provides $ 9.8 mil. for orphan drug activities at FDA, of which $ 7.6 mil. is to be made available for orphan product grants and contracts. The funding level represents a $ 2.5 mil. increase over the Administration request. A total of $ 56.9 mil. is appropriated for AIDS activities, as the Administration had requested. The conference agreement does not provide funds for a biotechnology demonstration project at the National Center for Toxicological Research as the House Appropriations Committee had requested. Overall, Congress appropriates $ 568.7 mil. for FDA in fiscal 1990. The budget includes $ 560.3 mil. for agency salaries and expenses. The funding level exceeds the Administration budget request, $ 542.7 mil., by roughly $ 17.6 mil. With the increases provided, conferees said, Congress "expects" FDA "to implement management improvement systems and automated data processing enhancements necessary for centralizing its planning, ongoing oversight, and allocation of limited resources to priority activities among its various centers and field offices." The bill appropriates $ 8.4 mil. for building and facilities. The report directs FDA to develop requirements for "necessary renovation and consolidation of FDA facilities" and report to Congress and OMB "on progress with its master site plans and requirements development for consolidation" by Dec. 31. The consolidation effort is also a goal of Sen. Hatch's (R-Utah) FDA " revitalization" bill, which passed the Senate Labor & Human Resources Committee Nov. 1 ("The Pink Sheet" Nov. 6, p. 8). Despite the fact that the appropriations bill has cleared Congress, Gramm-Rudman-Hollings cuts in the FDA budget (of $ 22.9 mil.), which went into effect Oct. 16, will not be lifted until budget reconciliation legislation has also been passed. The reconciliation bill is in conference and is expected to be completed before Thanksgiving.

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