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CQ Roll Call | Sequester Limits Access to FDA User Fees, Hamburg Tells Committee

April 29, 2013
In The News

Sequester Limits Access to FDA User Fees, Hamburg Tells Committee
By Rebecca Adams | CQ Roll Call | April 29, 2013



A decision to include Food and Drug Administration user fee revenue in the across-the-board cuts mandated by the sequester sparked concern Friday among House appropriators.

Republicans including Kevin Yoder of Kansas and Alan Nunnelee of Mississippi asked FDA Commissioner Margaret Hamburg to provide more details about the effect that the sequester is having on user fees collected by FDA.

The fees were negotiated with companies regulated by the agency and included in last year’s FDA user fee reauthorization (PL 112-144). But Office of Management and Budget officials determined that cuts from the sequester apply to user fees as well as appropriated funds.

At a hearing of the Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies, Yoder asked Hamburg whether she eventually will get access to the sequestered user fees.

“Those fees are still being collected from industry but are not going to support the FDA programs” as intended, Hamburg said. She added that the money is held in FDA’s account, but the only way FDA would have authority to spend it is if Congress gives permission through legislation.

Hamburg noted that companies that are paying the fees are concerned because the agency and industry carefully negotiated the fees, with the FDA agreeing to meet certain performance targets in exchange for the fees.

“We aren’t going to be able to fully achieve the goals and performance targets” without the full amount of the user fee funds, Hamburg said.

Nunnelee asked whether the approval of potentially lifesaving drugs might be delayed because of the situation.

Hamburg said she is worried that the cuts in user fees will slow the agency’s ability to put out information through guidance documents, to review applications for new drugs and devices, to hire additional staff, to create two new user fee programs established in the 2012 reauthorization and to develop regulatory tools.

Hamburg also noted that the system works best when FDA staff can collaborate closely with companies before they send in their applications for review so the agency can guide companies on how to conduct studies that are needed to prove that the new products are safe and effective enough for approval. Hamburg said the reduction in funds “will certainly limit the staff” in its ability to informally communicate with companies.

Subcommittee ranking Democrat Sam Farr of California called for his colleagues to change the law so the FDA can have access to the sequestered user fees.

“I would hope we might be able to look at that,” Farr said. “We ought to give the flexibility in these fee structures” so they can be used for their intended purposes.

On another user fee issue, GOP appropriators said they are unlikely to agree to an FDA request for new authority for $226 million in fees for food imports, food facility registration and inspections.

“These fees do not appear to enjoy the same level of industry support that the prescription drug or medical device industries give to their programs because the food industry believes this to be a ‘food safety tax,’” said subcommittee Chairman Robert B. Aderholt, R-Ala. “The FDA has failed to communicate to industry what, if any, performance measurements FDA would use in managing this program. These fees are not authorized, and the chance of Congress authorizing them seems slim.”

Full committee Chairman Harold Rogers, R-Ky., said, “This committee and the general public has little appetite for food fees.”