FDA FY 1991 BUDGET REQUEST ASSUMES USER FEE REVENUES

Executive Summary

FDA FY 1991 BUDGET REQUEST ASSUMES USER FEE REVENUES of at least $ 144 mil., according to correspondence between HHS and the Office of Management and Budget in preparation for next year's budget. In a Nov. 27 letter to OMB Director Richard Darman, HHS Secretary Sullivan said FDA's fiscal year (FY) 1991 "budget request is $ 43 mil. in budget authority below that provided by the Congress for FY 1990, with the remainder of our budget request for FDA being $ 144 mil. in user fees, which was accepted by OMB." Sullivan was replying to OMB's Nov. 20 "passback" review of the department's budget request. The department has requested a total FY 1991 budget authority of $ 632 mil. for FDA. If more than $ 144 mil. in user fee income is assumed, the Bush Administration will ask Congress for less than $ 488 mil. in FDA appropriations. * Noting that the Administration has plans for "revitalizing FDA," Sullivan asked OMB "to restore FDA to the original level sought in September of $ 632 mil." The total "assumes a substantial contribution by industry through $ 144 mil. in user fee support," the letter states. The Administration is expected to ask for more than $ 144 mil. in user fees. On its face, the $ 632 mil. budget authority for fiscal 1991 would be about $ 38 mil. more than the Congressional budget package for fiscal 1990 which gives FDA $ 594.4 mil. and does not include user fees. On Nov. 21, President Bush signed FDA's budget appropriation for fiscal 1990: $ 560.3 mil. for salaries and expenses and $ 8.35 mil. for buildings and facilities. Another $ 25.6 mil. has been set aside for rent. However, FDA appropriations in the current fiscal year will be reduced by a 1.4% across the board budget sequestration that will put FDA's fiscal 1990 budget closer to $ 585 mil. In his letter to Darman, Sullivan suggests that an increase in total FDA funding in fiscal 1991 is needed in large part to provide for generic drug industry regulation. Sullivan pointed out the Administration has agreed "to improve oversight of generic drug approval because of the high risk associated with this activity," and the FDA budget request would "provide the resources to control these risks." The Administration is considering a request for a supplemental budget for FY 1990 in order to enhance funding for generic drug regulation. "We are committed to the revitalization of FDA," Sullivan declared. "Improvement in the quality and integrity of the entire regulatory process, especially generic drugs, requires an infusion of new resources in both FY 1990 and FY 1991." Sullivan noted that HHS is lowering its budget request for the Health Care Financing Administration in the wake of the congressional repeal of the Catastrophic Care Act. For HCFA, the letter states, "we are reducing our original 1991 request by $ 562 mil. due to the repeal of the" Medicare program. OMB had hoped to resolve appeals from all departments and agencies by Dec. 8. The agency has now moved the appeal deadline back to Dec. 14. Remaining areas of contention are expected to be ironed out between department heads and President Bush in face-to-face meetings.