FDA SALARIES AND EXPENSES SHORTFALL OF $44 MIL

FDA SALARIES AND EXPENSES SHORTFALL OF $44 MIL in fiscal year 1995 appropriations final bill will necessitate a 5% agency- wide cut in full-time equivalents, according to FDA staffers. The Sept. 21 House/Senate conference report on the FY 1995 agriculture spending bill (HR 4554) was approved with no changes by the House Sept. 23 by a 287-to-107 vote and is expected to be taken up by the Senate on Sept. 27.

The conference total of $899.4 mil. for salaries and expenses is just under the House mount of $914.4 mil., but raises the Senate's total of $754.6 mil. ("The Pink Sheet" June 13, T&G-2).

FDA will increase its prescription drug user fee revenues by $23.1 mil. in FY 1995, bringing the base fiscal 1994 total of $872.4 mil. for salaries and expenses to $895.5 mil. The agency had estimated that an additional $48 mil. over that total would be required to cover salaries and current services for FY 1995. However, the conference report allocates only $3.8 mil. more in treasury funds for salaries and expenses for a fiscal 1995 total of $899.4 mil.

The $44 mil. shortfall in payroll and services is compounded by the 2% Executive Branch pay raise ordered by President Clinton in August. With an additional locality pay raise also on the table, FDA's fiscal 1995 budget may have to absorb a 3.3% total pay increase for its headquarters staff.

Exempt from the agency-wide 5% FTE cuts are personnel responsible for prescription drug review and mammography facilities inspection; these bases are protected by the Prescription Drug User Fee Act of 1992 and the Mammography Quality Standards Act of 1992.

In addition, review programs within the Center for Devices & Radiological Health are exempt from cuts based on the assumption of passage of the Medical Device User Fee Act (HR 4864, S 2276), which has passed the House Energy & Commerce Committee, but has seen no action in the Senate. CDRH anticipates total FTEs of 1,117 in FY 1995, down from a fiscal 1994 ceiling of 1,149.

FDA plans to distribute the 5% FIE cuts unevenly throughout the agency, according to staffers.

For example, projections are that the Office of Generic Drugs would sustain a 7% decrease, or 11 FTEs, while a 5% cut is expected across the Center for Drug Evaluation & Research as a whole, or 32 FTEs. CDER's Office of Compliance is also expected to face about a 7% cutback in full-time equivalents. The Office of OTC Drug Evaluation would sustain a 10% cutback, or four FTEs, according to initial projections. It appears that CDER will take a 2% cutback in FTEs each year for the next four fiscal years.

FDA Deputy Commissioner for Management and Systems Mary Jo Veverka discussed the agency's fiscal pressures during a Sept. 19 address to the Regulatory Affairs Professionals Society in Washington, D.C. She stated that amid the current downsizing pressure in the federal government, user fee programs' base statutory protections are "starting to create an environment of haves versus have-nots within the agency."

Veverka noted that FDA projections of 13% total across-the- beard cuts through FY 1997 will result in "serious erosion in the remaining [non-exempt] components in the agency. That also makes it far less attractive to us to pursue additional user fee programs, because it exacerbates this problem."

"The continuing risk of having to shift non-user fee resources into the user fee program also introduces a real barrier to our interest in any new user fee program, no matter how strongly industry might support it," she continued. "Any further user fee program will need to address these very complex...issues."

Veverka said the use of unauthorized user fees as a deficit reduction tool leads "to a reduction in our appropriations base." Prior to House/Senate conference, the Senate version of the spending bill contained $163 mil. in unspecified user fees. They were later removed under a House Ways & Means Committee resolution authored by Chairman Gibbons (D-Fla.) declaring the unauthorized user fees a revenue-raising measure in violation of the constitutional requirement that all such measures originate in the House ("The Pink Sheet" Aug. 29, In Brief).