Obama Budget Links Proposed User Fees To Improving Food Safety

The nearly $260 million increase President Obama requests for FDA's food safety operations includes $75 million in new user fees.

The May 7 proposal aligns the administration with supporters of general user fees for food manufacturers and against proponents of more targeted fees in a debate emerging in Congress.

Acting FDA Commissioner Josh Sharfstein expects Congress to approve the user fees, including the new fees, the administration is requesting.

"We think that the user fees as proposed are reasonable, that Congress will think it's reasonable ... and we'll be able to get them," he said during a same-day media briefing.

Asking for new user fees, however, is far removed from receiving them, Natural Product Association executive Daniel Fabricant observed.

"They are kind of counting their chickens before they hatch," he said, adding. "There's no food safety bill yet. So we don't know what those fees are going to look like."

Sharfstein, as the acting head of an agency dependent on Congress for its funding, also pointed out FDA would manage without the additional user fees.

"The vast majority of the increase is not dependent on new user fees," he said, adding, "We'll have to take it one step at a time. There's plenty in the budget that will allow us to do a tremendous amount either way."

The chairwoman of the Appropriations subcommittee with FDA oversight, Rep. Rosa DeLauro, D-Conn., says the administration's request is "a realistic assessment" of the agency's needs. In a same-day release, DeLauro points out the president is asking for a 15 percent increase for FDA from a Democratic-majority Congress that has raised the agency's appropriation by nearly 40 percent the past three years.

$516.6 Million More Proposed For FDA

The $3.2 billion for FDA included in the president's fiscal 2010 budget request is a $510.6 million increase from the agency's fiscal 2009 appropriation. According to the request, the $215.4 million increase in total user fees includes $141 million in proposed new fees.

FDA's fiscal 2009 appropriation, part of an omnibus spending bill enacted in February, includes $765 million for food safety (¹ 'The Tan Sheet' March 16, 2009, In Brief).

The total spending plan represents a 19 percent increase for FDA over the agency's fiscal 2009 budget, with $295.2 million of that increase provided by higher appropriations and $215.4 million by higher industry user fees.

The White House released an initial budget outline in February. The latest documents submitted to Congress more fully reflect the administration's priorities as well as provide detailed budget figures (² (Also see "No Small Peanuts: Obama Budget Outline Puts $1 Billion Toward Food Safety" - Pink Sheet, 2 Mar, 2009.), p. 11).

The president requests $845.6 million in fiscal 2010 program level funding for FDA's food programs, comprising $245 million for the Center for Food Safety and Applied Nutrition and $600.4 million for field activities.

The CFSAN funding is $34.5 million more than the fiscal 2009 appropriation and supports adding 93 full-time equivalents in staffing, according to a budget request ³ justification provided by the Department of Health and Human Services.

The request also calls for a $162.4 million funding boost in FDA's field operations, including increasing the FTEs by 404 to 2,569.

The user fees proposed by the White House would support FDA enforcement and inspection activities that have come under tighter scrutiny during widespread food contaminations over the past several years.

Members of Congress and consumer advocacy groups this year have questioned FDA's food safety effectiveness following salmonella contaminations linked to peanut ingredients sourced from Peanut Corp. of America and pistachio products from Setton Farms (⁴ (Also see "Sharfstein Takes “Acting” Title Literally, Starting FDA Overhaul" - Pink Sheet, 13 Apr, 2009.), p. 3).

Those incidents "demonstrate that, in addition to conducting more frequent and targeted inspections, FDA must expand other activities necessary to secure the supply chain," the budget request says.

According to the HHS information, fees from inspections and facility registrations would account for the vast majority of the total, $52.5 million, while $6.1 million would come from re-inspections and $4.1 million from export certifications.

In addition to FDA inspections at food product manufacturers and processors in the U.S. and abroad, the proposed food safety user fees would pay for preventive controls against food-borne outbreaks, integration with state systems and information technology upgrades.

The fees also would go to laboratory analysis of food samples, surveillance for contamination and import review and analysis, according to the request.

The HHS report points out that work by CFSAN and other FDA offices affects $417 billion in domestic and $49 billion in imported food products, including dietary supplements, and $62 billion in cosmetics.

The budget request points out that CFSAN is the point office in implementing FDA's Food Protection Plan included in the Import Safety Action Plan, an interagency working group issued in 2007 (⁵ (Also see "Import Safety Pilot Casts Global Net For Inspecting Drug Manufacturers" - Pink Sheet, 14 Jul, 2008.), p,. 13).

User Fee Debate In Congress

Disagreement on user fees is likely to mark Congress' deliberations on FDA's fiscal 2010 appropriation. While the FDA Globalization Act, H.R. 759, would impose user fees across the food industry, the FDA Food Safety Modernization Act, S. 510, calls for targeted fees.

S. 510, authored by Sen. Dick Durbin, D-Ill., would impose fees only for re-inspections at foreign and domestic firms' facilities after FDA identified those sites as non-compliant with food safety regulations.

Durbin, considered a close ally to Obama as a member of the Illinois delegation and the first senator to back his presidential campaign, made it clear when he introduced S. 510 that he opposes general user fees for food inspections (⁶ (Also see "Durbin Food Safety Bill Emphasizes Targeted Fees, Industry Responsibility" - Pink Sheet, 9 Mar, 2009.), p. 6).

Sharfstein, though, considers support from user fees critical to all facets of improving U.S. food safety enforcement. Improving federal agencies' collaboration with state and local governments is particularly critical, he said during the HHS media briefing in Washington.

"What we're looking at with this food safety increase is the ability to really jumpstart that system of collaboration and leverage the state and local efforts, start to put in place a prevention-oriented system and increase the number of inspectors," Sharfstein said.

"If we're just increasing inspections, given the type of challenge and the number of facilities and everything else, then we're not going to be doing the job. We have to be shifting to prevention and really leveraging what's out there for states and localities."

S. 510 and H.R. 579 are among numerous food safety bills introduced in Congress this year, including DeLauro's Food Safety Modernization Act, which would move some divisions out of FDA and form an HHS agency for food safety.

House Energy and Commerce Chairman Henry Waxman, D-Calif., plans to use FDAGA's food safety provisions as the basis for the committee's food safety bill (⁷ (Also see "First Course For Waxman: Fix Food Safety, Hold The Separate Agency Plan" - Pink Sheet, 16 Mar, 2009.), p. 16).

The budget request also addresses FDAGA's drug safety provisions. A large portion of a $166.4 million safety initiative outlined in the budget is aimed at ensuring supply chain safety and security for medical products.

The initiative targets activities including development of a database to reliably inventory firms, facilities, products, product components and ingredients, more inspections of all entities in the supply chain, and better coordination with foreign regulatory authorities, the HHS documents explain.

The safety initiative would allocate $5 million to allow FDA to work with stakeholders on policy initiatives related to drug importation, and with Congress on legislation to provide the infrastructure needed to ensure the safety of imported medicines. An early outline reflected a similar intent but without specific funding attached.

- Malcolm Spicer ([email protected]); Cathy Dombrowski contributed to the article ([email protected])