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REP. DINGELL SAYS CONGRESS MUST "THINK SERIOUSLY" ABOUT FDA USER FEES; INDUSTRY GROUPS PUSH FOR FDA FY 1991 BUDGET OF $730 MIL., WITH NO USER FEES

Executive Summary

Rep. Dingell (D-Mich.) said that Congress must "think seriously" about FDA user fees in March 28 testimony to the House Appropriations/Agriculture Subcommittee, chaired by Rep. Whitten (D-Miss.). "We all know that the FDA will continue to need more money in the foreseeable future," Dingell said. "Mr. Chairman, I know that you do not like user fees -- I don't like them myself -- but the time has come to think about them seriously." Dingell added, however, that he would not support a user fee plan that "did not require that all funds collected go directly to the agency, and for which the regulated industry did not see real benefits, such as better agency services." In the past, Dingell has been a staunch opponent of user fees, having fought proposals made by Presidents Reagan and Bush over the last five years. However, Dingell reportedly began to change his position as problems due, at least in part, to FDA resource shortages were uncovered in the generic drug review program and, more recently, in the agency's seafood inspection practices. As a result of the generic drug scandal, the Administration has proposed to collect nearly $14 mil. in user fees from the generic drug industry in fiscal year 1990 to augment FDA's enforcement programs. For fiscal year 1991, the Administration has proposed an FDA budget of $685 mil., which includes $157 mil. in user fees --$58 mil. for new drug review functions and $45 mil. for generic drug review and enforcement. Dingell told subcommittee Chairman Whitten that "the President's FY 1991 budget is a good beginning in terms of the funds that will be needed, but it is only a beginning. I hope that your subcommittee will use these budget figures as a guideline in developing your own." Noting the "severe problems" that have recently rocked FDA, including a generic drug scandal "of enormous proportions," Dingell said that "while these problems may not derive directly from a lack of resources, they are certainly exacerbated when dollars and people are scarce and the agency must rob Peter to pay Paul." Dingell, who is now working on an emergency relief bill for FDA, said, "I hope to have the benefit of your advice and counsel as we work out what, if anything, we can do together to rebuild the FDA." Rep. Waxman (D-Calif.) and Sen. Kennedy (D-Mass.) are also said to be reconsidering their former opposition to user fees. In a recent speech to the Health Industry Manufacturers Association, Nancy Taylor, health policy director for Sen. Hatch (R-Utah), predicted that user fees "are coming" ("The Pink Sheet" March 19, T&G-7). She indicated that the challenge for the health-related industries will be to "help devise a way [to implement user fees that] won't harm your industry to such an extent that it will burden innovation." In a recent Senate Appropriations/Agriculture Subcommittee hearing on the agency's budget, Sen. Cochran (R-Miss.) noted the subcommittee has "taken a dim view" of user fees in past years and "I am hopeful we will have a similar reaction" this year and will "come up with another way to find that money." Industry remains staunchly opposed to the concept of user fees and continues to call for increased FDA funding without the implementation of product review charges. In March 27 testimony before the Appropriations/Agriculture Subcommittee, the Pharmaceutical Manufacturers Association, the Health Industry Manufacturers Association and the Industrial Biotechnology Association called for $730 mil. in direct funding for FDA without user fees. The recommendation echoes a figure advanced by the FDA Council, a lobbying organization of drug companies and medical societies. The FDA Council budget figure represents a $13 mil. increase over an earlier budget figure developed by the group ("The Pink Sheet" March 12, T&G-3). The group's new target budget corresponds with the funding level reportedly being favored by Rep. Boxer (D-Calif.), chairman of the House Budget Committee's Human Resources Task Force. PMA, HIMA and IBA told the subcommittee that Congress should augment the Bush Administration's FDA budget request of $685 mil. by $45 mil. The additional $45 mil. is needed "to address basic resource needs that have been too long deferred," PMA President Gerald Mossinghoff told the subcommittee. In his presentation, Mossinghoff noted a number of problems at the agency, including deficiencies in the quality of labs and equipment, shortages in office space and vacancies in senior agency posts. The budget should be appropriated through direct funding, the industry groups also urged, recommending that Congress reject the Administration's proposal to raise $157 mil. through user fees. In separate testimony before the subcommittee, the Nonprescription Drug Manufacturers Association agreed that Congress should steer clear of user fees, although the group did not suggest a specific funding level for the agency. PMA's Mossinghoff argued that "most of the substantial revenues from these high user fees would replace appropriated funds with only one-third of these revenues going for program improvements." PMA is "particularly concerned that the research-based pharmaceutical industry, which would be assessed an estimated $58 mil. in user fees, would see only $2.5 mil. channeled to support direct improvements in the new drug evaluation process," Mossinghoff declared. The PMA president also pointed out that "without user fee receipts, the Administration actually is proposing a major budget cut of $59 mil., or 10%, from current-year appropriations for FDA." In separate testimony, Coalition for FDA Resources Executive Director Douglas Campbell urged a $60 mil. increase beyoond the President's budget request for 1991: $32.5 mil. for 500 new full-time equivalent positions; $12.5 mil. for facilities repair and renovation; and $3 mil. for the continuation of the plan to unify the agency's facilities on a single campus. Campbell said his coalition also "strongly supports the requested supplemental of$13.9 mil. for the generic drug program, as well as the increases identified by the Administration." Members of the coalition include the PMA, American Heart Association, the Association of Biotechnology Companies, the National Organization for Rare Disorders, the National Food Processors Association and the National Soft Drink Association.
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