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EXPANDED FDA USER FEES IN SENATE FUNDING BILL

This article was originally published in The Tan Sheet

Executive Summary

EXPANDED FDA USER FEES IN SENATE FUNDING BILL called "troublesome" by Sen. Dale Bumpers (D-Ark.) during floor debate before Senate passage of the fiscal 1994 agriculture/FDA appropriations bill on July 27. During debate on July 26, Bumpers said: "The recommendation to include these user fees was particularly troublesome for me because I do question FDA's ability to collect them in time to be used in [FY] 1994." The Appropriations/agriculture subcommittee chairman noted that his panel had worked within tight constraints for discretionary funding ("The Tan Sheet" July 26, p. 16). The Senate proposes to fund FDA with $ 924.3 mil. in FY 1994, in part, from $ 54 mil. in prescription drug user fees and $ 175 mil. in user fees from unspecified sources. The administration has indicated that additional user fees beyond prescription drugs would target OTC drugs, medical devices and foods. The House bill provides the same total funding for the agency as the Senate bill as well as the $ 54 mil. in Rx user fees, but does not include the additional fees. In effect, the House would appropriate $ 175 mil. more for FDA than would the Senate. During the July 26 debate, Bumpers' concerns were echoed by other senators on both sides of the aisle, including major players in the conference process. Their sentiments against an expansion of FDA user fees in the Senate version of the bill suggests a willingness to move closer to the House version of the FDA appropriations bill. The $ 54 mil. in Rx user fees, however, is not in question. With the Senate's 90-10 passage of the funding bill, the measure moves on to conference with the House. Bumpers, who also chairs the Senate Small Business Committee, worried that the user fee proposal "could have a devastating effect on small pharmaceutical companies and small prosthetic device companies . . . Since the House does not have this provision, obviously we are going to have a lot of blood on the floor before that becomes final." The House has not yet appointed its negotiators for conference on the bill. Senate conferees include Bumpers, Robert Byrd (D- W.Va.) and agriculture subcommittee ranking Republican Thad Cochran (Miss.). Joining Bumpers in remarks, including a "colloquy," or scripted conversation, on the appropriations levels were Cochran, Senate Labor and Human Resources Committee Chairman Edward Kennedy (D-Mass.), Labor Committee ranking Republican Nancy Kassebaum (Kan.) and Sen. Orrin Hatch (R-Utah). Hatch, for example, remarked: "The proposed $ 175 mil. in user fees differs greatly from the prescription drug user fees authorized by the Committee on Labor and Human Resources in the last Congress after very careful, thorough deliberations. The proposed $ 175 mil. in user fees supplant direct appropriations," Hatch added, and, unlike the prescription drug revenues, are not dedicated to specific agency improvements. Kennedy pointed out that the net $ 638.4 mil. appropriations proposed by the Senate bill would be too low to trigger collection of the Rx user fees, further hampering the agency. Cochran noted that FDA has advised that, in the absence of specific statutory authorization, it would need 18-24 months to establish the expanded user fee program through regulation. Other senators raising objections to the provision included Byron Dorgan (D- N.D.), Dave Durenberger (R-Minn.), Dan Coats (R-Ind.), and Appropriations/HHS subcommittee Chairman Tom Harkin (D-Iowa). During debate on July 27, Sen. Howell Heflin (D-Ala.) appeared to question the overall concept of user fees for an agency such as FDA. "User fees in the context of public health regulation is a misnomer; it is the public, not the regulated industry, that receives a benefit from such programs, and it is the public that should pay for them," he asserted. "But it should be paid through general funds, not through a hidden tax, and that is precisely what an extra cost of regulation will become."
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