User fees central to F.D.A. budget proposal

by Jay Sjerven
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User fees are at the heart of the Food and Drug Administration’s 2013 budget proposal. The F.D.A. requested $4,486,368,000 in funding for its programs in fiscal year 2013, which represented a 17% increase from $3,832,204,000 in fiscal 2012. The total request included proposed budget authority (congressionally appropriated funds) of $2,517,311,000, up $11,502,000, or less than 1%, from fiscal 2012, and $1,969,057,000 to be collected as user fees from regulated entities, up a whopping 48% from the $1,136,395,000 the agency was authorized to collect in fiscal 2012. The heavy reliance on user fees was a concern to regulated industries.

The F.D.A. budget request for its transforming food safety initiative in fiscal 2013 totaled $1,425,130,000, up $253,359,000, or 22%, from $1,171,771,000 in fiscal 2012. Of this total, $1,150,725,000, or 81%, would be from congressionally appro-priated funds and $274,405,000, or 19%, would be collected from regulated entities as user fees.

The F.D.A. request to collect $274,405,000 in user fees in fiscal 2013 to support its trans-forming food safety initiative was 10 times the authorized user fee collections in the current year at $27,064,000.

“For fiscal year 2013, F.D.A. is requesting new user fees to implement the landmark Food Safety Modernization Act,” said Margaret A. Hamburg, F.D.A. administrator. “With these re-sources, F.D.A. will advance a prevention-focused food safety system that supports industry efforts to deliver safe food and protect American consumers from harm.”

The largest new user fee affecting the food sector is that pertaining to the food establishment registration fee that was mandated under the Food Safety Modernization Act. The F.D.A. proposed to collect $220,200,000 in establishment registration fees in fiscal 2013.

The F.D.A. budget proposal said the registration fees would support “establishing new, eff-ective and comprehensive food safety standards; establishing a new program for import safety; increasing the number and efficiency of inspections; launching an integrated national food safety system with states and localities; expanding re-search activities, which will include improved data collection and risk analysis; and maintaining a current facilities registration database and supporting other information technologies to im-prove F.D.A.’s risk-based decision capabilities.”

A second new user fee is to support the agency’s existing food contact notification (F.C.N.) program. This program has been operational since 2000 and is the preferred process for obtaining authorized uses of food contact substances. The substances in-
clude components of food packaging and food processing equipment that come into contact with food. The F.D.A. proposed to collect $4,901,000 in user fees to support this program in fiscal 2013.

“The addition of user fees will add predictability for F.D.A., the regulated industry and consumers,” the F.D.A. budget request stated. “The proposed user fees investment in the F.C.N. program will better position F.D.A. to fulfill its public health mission and will promote greater safety and understanding of products being used in contact with food.”

A third new user fee would provide support for the federal food export certification pro-ject that assists exporters of U.S. food products. The F.D.A. proposed to collect $1,267,000 in fees from participating food exporters in fiscal 2013.

And the fourth new user fee was an international courier user fee. The F.D.A. proposed to collect $1,047,000 in such fees in fiscal 2013. The F.D.A. said, “The proposed fee will support activities associated with increased surveillance of F.D.A.-regulated commodities, including food products, at express courier hubs.”

Two user fees first authorized in fiscal 2012 would be continued in fiscal 2013, and they, too, were mandated under the Food Safety Modernization Act. The F.D.A. proposed to collect $15,367,000 in food re-inspection fees, up $667,000 from fiscal 2012, and $12,925,000 in food recall user fees, up $561,000 from fiscal 2012.

The Alliance for a Stronger F.D.A. expressed concern that the F.D.A.’s fiscal 2013 budget proposal did not include an increase in appropriated funding but instead would significantly raise user fees paid by the various regulated industries.

“The F.D.A.’s essential role in protecting public health continues to grow to meet the demands of our time,” said Margaret Anderson, president of the alliance and executive director of FasterCures, a center focused on medical research. “With no other agency as fallback, we believe that F.D.A.’s funding should be increased to reflect the agency’s vast responsibilities and increased workload.

“The key thing to watch is the actual budget appropriation, and not the user fees. It is the appropriated dollars that are used to run the agency and pay for overseeing imported goods, assuring food safety, and stimulating medical product innovation and ensuring safe-ty, as well as dealing with inevitable crises, such as seafood safety during the Gulf oil spill.”

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