On March 4, the Obama Administration released its proposed budget for fiscal year (FY) 2015. The FY 2015 budget estimate for the Food and Drug Administration (FDA) is $4.7 billion, which is an 8 percent increase over the FY 2014 budget. The increase from FY 2014 includes $23 million in new budget authority and $335 million in user fees. In addition to reflecting scheduled increases in currently authorized user fees, the Administration’s budget proposes five new user fees including: (1) a food contact notification user fee ($5 million); (2) a food facility registration and inspection user fee ($60 million); (3) food import user fee ($169 million); (4) an international courier user fee ($6 million); and (5) a cosmetic user fee ($19 million).

AGG Insights: Practical Implications of the Administration’s Budget Request

There are two important points that should be underscored in analyzing this proposed budget:

  1. The President cannot impose a budget on the government, as only Congress can enact a budget; and
  2. Provisions in this budget, such as the five proposed user fees identified above, have been included in prior Administration budget requests, but Congress never acted on them.

In light of the partisanship that plagues the legislative process and the current divide between the Administration and Congress, the proposed budget, as a whole, will not be enacted. However, certain provisions from the budget may be accepted by Congress and incorporated into future legislation.

Food Safety 

he FY 2015 budget request includes a total of $1.5 billion ($263 million above FY 2014) for food safety activities. This includes $229 million in expected revenue from the food import fee and the food facility registration and inspection fee, which would be used to improve the Agency’s food facility inspection capacity and admissibility review of food and fee imports. It also includes $5 million from a new food contact notification user fee, which would be used to strengthen FDA’s ability to reduce microbial food contamination through premarket notification. In addition, it includes funds from currently authorized user fees, such as the voluntary qualified importer program, the export certification fund, and the food reinspection and recall fees.

The FDA proposes to use the increased budget authority to focus on the following five initiatives: (1) developing rules and guidances related to food safety; (2) providing technical support to ensure that safety standards are effective and efficient; (3) providing food safety regulatory training and capacity to stakeholders and FDA’s partners, including federal, state, local, tribal and international entities; (4) conducting risk analyses to support priority setting; and (5) conducting research to better understand the impact of antimicrobial resistance on public health.

Medical Product Safety 

The FY 2015 budget request includes $2.6 billion ($61 million above FY 2014) dedicated to safety activities focused on core medical products, including prescription and over-the-counter drugs; biologics (vaccines, blood products, and gene therapies); animal drugs; and medical devices. Half of the funds for medical product safety activities ($1.3 billion) are dedicated to funding applied research, domestic and foreign facility inspections, and pre- and post-market surveillance activities for the highest priority drugs, biologics and devices. In addition, the proposal would dedicate $25 million to a new agency-wide initiative related to the oversight of drug compounding that includes the following activities: (1) inspections and enforcement; (2) the development of regulations and guidances to oversee compounding pharmacies; and (3) enhanced collaboration and coordination with states to improve oversight and training activities for state inspectors to improve facility compliance. The FDA will continue to implement its new responsibilities authorized in the FDA Safety and Innovation Act and the Drug Quality and Security Act (DQSA) as well as the new user fees authorized in the DQSA.

Tobacco 

The budget request includes $566 million in user fees (an increase of $32 million from FY 2014) for the FDA Center for Tobacco Products, the Office of Regulatory Affairs tobacco field programs and related activities. The funds will be used to support the goals of (1) reducing initiation of tobacco product use; (2) decreasing the harms of tobacco products; and (3) encouraging cessation among tobacco users.

Advancing Medical Countermeasures 

The budget includes $25 million for the FDA Medical Countermeasure initiative, which is intended to develop, evaluate and approve countermeasures to protect against chemical, biological, radiological and nuclear threats, as well as emerging infectious disease threats. The funds will also be used to establish a regulatory, legal and policy framework to support emergency preparedness and response.