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FDA GENERIC DRUG PROGRAM FUNDED AT $46.6 MIL. IN FY 1994 BY HOUSE CMTE., UP $4 MIL. FROM HHS REQUEST; ORPHAN DRUGS GET $3 MIL. INCREASE IN FUNDING TO $15 MIL.

Executive Summary

FDA's generic drug review program would receive $46.6 mil. for FY 1994, an increase of $4 mil. from the Clinton Administration's request, under the appropriations bill adopted by the House Appropriations Committee June 23. The Administration had requested that funding for generic drug activities remain at the FY 1993 level of $42.7 mil. ("The Pink Sheet" May 24, p. 9). In a report accompanying the FY 1994 funding bill, the committee suggested that additional funding is necessary to meet an increased future workload for FDA's generic product review system. "It is estimated that over $10 bil. in prescription drugs will come off patent in the next few years," the report explains. "Having alternative generic drugs approved will save millions of dollars in health care costs." The committee did not alter proposed FDA funding from the levels approved a week earlier by its Agriculture Subcommittee but did provide further details on how funds would be allocated. FDA's orphan drugs program would receive $15.2 mil., versus the Administration's request of $12 mil. (see related item, T&G-4). The additional funding for orphan drugs was urged by subcommittee member Rep. DeLauro (D-Conn.). DeLauro's concern in this area stems both from her experience as an ovarian cancer survivor and work with the National Organization for Rare Disorders. The committee-passed measure appropriates a total of $924.3 mil. to FDA, with $867.3 mil. for salaries and expenses, $8.4 mil. for buildings and facilities, and $48.6 mil. for rental payments. The appropriated moneys would give the agency the full funding level requested by the Administration. The budget proposal as submitted by the President to Congress April 8 allocated $929 mil. for FDA, which includes $5 mil. from a self-funding certification program for insulin and color additives. The committee concurred with its subcommittee's agreement that FDA could collect $54 mil. in user fees from the drug and biologic programs during FY 1994. The funding increases for generic and orphan drug activities and certain nondrug areas would be offset by not meeting the Clinton Administration's request to provide the biologics program with an additional $34.6 mil. for activities related to the comprehensive childhood immunization initiative. The committee's proposed funding of $130.2 mil. for biologics includes only $10 mil. for immunization activities. The sum requested was considered unnecessary in light of the scale-back of President Clinton's original universal purchase immunization plan, a committee staffer explained. The biologics program's existing activities should not be affected, because the immunization program funding would have gone to new activities. The committee-passed bill also contains a provision setting a floor for FDA's staffing level substantially above the agency's current level of employment. The measure appears to be aimed at the Office of Management and Budget's hiring freeze, which has complicated FDA's attempt to begin hiring additional staff to carry out activities that will supported by drug user fees. The bill states that "none of the funds provided in this Act may be used to reduce programs by establishing an end-of-year employment ceiling on full-time equivalent staff years below the level set herein" for the FDA. The provision sets FDA's floor at 9,824 FTEs, substantially above both the level specified in the Administration's proposed budget (8,539 FTEs) and the number authorized for 1993 (8,694). According to the accompanying report, the provision is intended "to assure that personnel are compatible with funding levels provided by the Congress." The user fee/FDA hiring issue will soon be taken up by a House/Senate conference on the FY 1993 supplemental appropriations bill. The Senate Appropriations Committee is pressuring OMB to approve FDA's request for a waiver to begin hiring additional personnel to meet the requirements of the user fee legislation by withholding authority to begin collecting user fees ("The Pink Sheet" June 14, p. 3). The bill was approved by the full Senate on June 22. The House-approved supplemental money bill would allow user fee collections to begin. The Senate has not yet taken action on a 1994 Agriculture/FDA funding bill. While FDA funding received little discussion during the full House committee session, Agriculture Subcommittee Chairman Durbin (D-Ill.) took the opportunity to praise FDA for its recent handling of alleged tampering with Pepsico products, suggesting it reflected an overall high public regard for the agency. "I'm especially proud of what we've done to increase spending for the Food and Drug Administration," Durbin said. "Two weeks ago, when Pepsico, one of the major corporations in America, faced financial disaster, there was only one place they could turn to clear their name. It was Washington, D.C. and the FDA. [FDA Commissioner] Kessler made a public announcement which then became accepted by America because of the stature of this agency. We are going to make certain that the funding and the stature of this agency continues." Plans for consolidation of FDA's current facilities into a new two-site campus appear to be on track. The full House passed a Treasury/Postal Service appropriations bill June 22 providing $73.9 mil. to the General Services Administration for the FDA campus project, as requested in the President's budget proposal. The Senate has not yet scheduled a subcommittee markup on GSA appropriations, but subcommittee member Sen. Mikulski (D-Md.), the key backer of the campus project, is said to have requested that the Senate follow the House's path. Congress provided GSA with $200 mil. for the project in FY 1992.
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