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FDA WILL SEEK OMB WAIVER PERMITTING USER FEE HIRING TO PROCEED

This article was originally published in The Tan Sheet

Executive Summary

FDA WILL SEEK OMB WAIVER PERMITTING USER FEE HIRING TO PROCEED in the midst of the federal government personnel reductions set as a goal by President Clinton, HHS Deputy Assistant for Budget Dennis Williams told the Senate Appropriations/agriculture subcommittee at a May 18 hearing on FDA's fiscal 1994 budget. Williams noted that while HHS is participating in the personnel reductions, Clinton's executive order "also lays out a waiver authority for the director of [Office of Management & Budget], and we intend to send a request to OMB under that waiver for this purpose and some other purposes." FDA plans to hire an additional 600 full-time equivalents (FTEs) over the next five years to help speed up new drug approvals -- including Rx-to-OTC switch applications -- as part of the Prescription Drug User Fee Act of 1992. User fees have been recognized in the President's FY 1994 budget proposal and are included in a supplemental 1993 request, which cleared the House Appropriations Committee May 13. However, FDA's ability to begin hiring based on user fee revenues is still unclear. In addition to concerns over the cutbacks ordered by the President, some FDAers have suggested that user fee hiring may also depend on the agency being at its FTE ceiling; FDA is currently well below its FTE limit. Agriculture Subcommittee member Sen. Thad Cochran (R-Miss.) pointed out that "there are no full-time equivalents being assumed in either 1993 or 1994 from the user fee collections proposals." According to an HHS budget "justification of estimates" document provided by FDA, the FTE authorization requested for FY 1994 (8,834 FTEs) and the revised figure for FY 1993 (9,005 FTEs) total a reduction of 339 FTEs from the original 1993 appropriations level. Responding to a question from Cochran about how FDA will "reduce review times without funding additional personnel from user fees," FDA Commissioner Kessler responded: "We could not. There's no way without FTEs that we can reduce the review time." With regard to implementing the additional $ 200 mil. in FDA user fees that the President's FY 1994 budget request calls for from the OTC drug, foods and device industries, Kessler conceded that the task would be a challenge. "In the light of everybody having to make sacrifices . . . as far as deficit reduction, we all have an obligation to do whatever we can," the commissioner said. "Is it going to cause us to push the limit somewhat to get it up and running? Absolutely." Subcommittee Chairman Dale Bumpers (D-Ark.), however, expressed doubts about FDA's ability to gather the $ 200 mil. in user fees. The FDA budget is "very suspect," he said, because of the $ 200 mil. in unauthorized user fees that it includes. Without that $ 200 mil., FDA's total budget authority of $ 937.5 mil. falls below the agency's 1993 appropriations level of $ 826.6 mil. In a separate effort, FDA plans to issue in late May or early June a policy statement on combined marketing applications, or "bundling," and the definition of clinical data for the purpose of assessing user fees. Center for Drug Evaluation and Research Associate Director for Policy Jane Axelrad told a May 19 meeting of the Food and Drug Law Institute that the policy statement, the first of several user fee policies due out in the next few months, will specify what applications or amendments require a separate NDA or PLA under the user fee law. Under the act, different fees are assessed for original NDAs with clinical data, original NDAs without clinical data and supplements with clinical data. Axelrad said that the "policy addresses what can be combined in what application . . . [and] distinguishes between the types of clinical data that are considered clinical data for the purposes of user fees." Fee implications of refusals to file, filings under protest and withdrawals of applications before a filing decision is made will be addressed in a separate policy, due to be released in early June. "The statute provides that the FDA will refund only 50% of the first application fee payment for any application which is not accepted for filing. Thus, the FDA could keep up to $ 25,000 if an application was refused for filing," Axelrad said, noting that the statute does not address the fee implications of withdrawals or filings under protest. Axelrad said that "as soon as Congress approves" budget reconciliation legislation, which includes FDA's user fee supplemental appropriation request, "we'll be sending invoices for products and establishments subject to fees, as well as for covered applications and supplements submitted after Sept. 1, 1992." Both the bundling/clinical data policy and the refund policy are combined Center for Biologics Evaluation and Research/CDER documents emanating from the user fee review management group, one of seven working groups formed by FDA to implement the user fee law. The statements have been through the policy boards of both centers and have been submitted to the user fee steering committee. Federal Register notices of availability are being prepared for both policies, Axelrad said.
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