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FDA 1994 BUDGET OF $929 MIL. IS PROPOSED BY CLINTON ADMINISTRATION; 11% INCREASE BUT AMOUNT DERIVED FROM APPROPRIATIONS WOULD DECREASE BY MORE THAN $100 MIL.

Executive Summary

FDA's budget for fiscal 1994 would reach $929 mil., up 11% from FY 1993, but the portion derived from congressional appropriations would drop by more than $100 mil. to $670 mil. under the Clinton Administration budget request submitted to Congress April 8. The Clinton budget proposes to derive the $929 mil. total from $670 mil. in appropriations and $259 mil. in industry user fees. The agency received $780 mil. in appropriations in 1993 and authority to collect $5 mil. in user fees (from a long-standing certification program for insulin and color additives). A "revised 1993" budget estimates FDA appropriations at $790 mil. and user fees of $41 mil. The "revised 1993" figures contained in the Clinton Administration plan include the effects of the president's pending Economic Stimulus package, certain re-estimates and supplemental budget requests. HHS will raise $54 mil. in fees under the Prescription Drug User Fee Act of 1992, and in line with the industry/FDA/congressional compromise on the law, those funds will be use to enhance, not replace, appropriations for prescription drug-related programs. The Administration will seek $200 mil. in user fees on other industries to be used to help fund general FDA activities and deficit reduction -- with apparently $100 mil. going to the latter by decreasing requested appropriations. When President Clinton released his Economic Stimulus package, A Vision of Change for America, he proposed to raise a total of $167 mil. in FDA user fees for FY 1994, with all the revenues targeted to deficit reduction. However, congressional sponsors of the prescription drug user fee law apparently persuaded the Office of Management & Budget that user fees raised from Rx drug makers should be handled in congruence with the agreements underlying passage of that law ("The Pink Sheet" March 15, T&G-1). HHS budget documents say that the prescription drug user fees will "allow FDA to meet the FY 1994 interim goal of reviewing 55% of all New Drug Applications submitted in 1994 within 12 months," according to budget documents released at an April 8 HHS press briefing. To raise the additional $200 mil. in user fees, FDA will target three other regulated industries: OTC drugs, medical devices and foods. HHS has not apportioned the specific amount of fees to be raised from each of those industries. The department also has not identified what type of activities would be subject to fees, HHS Deputy Assistant Secretary for Budget Dennis Williams said at the April 8 briefing. The HHS documents state that the added fees would be collected "under current authority." In response to questioning, Williams explained that "current authority" refers to a general federal government-wide authority to impose user fees. However, the House and Senate Appropriations Committees have in the past taken a dim view of this approach. In earlier debates on prescription drug fees, the Appropriations Committees insisted that they would approve user fee collections only if specific authorizing legislation were enacted. FDA's drug-related activities would be allocated $428 mil. under the Clinton Administration plan, up from $383 mil. in the "revised 1993" budget and $340 mil. in the current 1993 budget (see box, p. 10). This figure appears to encompass biologics and veterinary medicine as well as human drugs. Based on requests in previous years when the three activities were noted separately, FDA human drugs-related programs probably account for more than half of the $428 mil. request. Funding for three budget categories remains level with the past two years: program management, allotted $33 mil.; FDA buildings and facilities, $8 mil.; and a revolving fund, $5 mil. Those figures actually may represent some belt-tightening in that no inflation update is provided. At the HHS briefing, Williams noted that the department is subject to the 2%-3% government reduction in administrative costs that was proposed in the economic stimulus package. The agency's full-time equivalent staffing positions would be set at 8,834 in fiscal 1994, a reduction of 171, or about 2%, from the revised 1993 budget and down 339 FTEs, or 3.5%, from the current 1993 budget. The budget request for the federal General Services Administration contains $73.9 mil. in FY 1994 for site acquisition and construction costs related to the project to consolidate all of FDA's Washington, D.C.-area buildings into a two-site campus. This adds to $200 mil. appropriated for this purpose in FY 1992. Review of possible sites is expected to extend at least the rest of this calendar year ("The Pink Sheet" March 1, In Brief). Chart omitted.
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