USER FEES OFFER LITTLE HELP TO FDA DUE TO APPROPRIATIONS CEILINGS -- PMA STUDY

Executive Summary

FDA user fees would be unlikely to improve the agency's overall funding due to existing congressional budget allocation ceilings imposed as part of the budget reduction process, according to an analysis conducted for the Pharmaceutical Manufacturers Association by van der Voort Associates of Alexandria, Va. The authority to establish user fees is within the jurisdiction of the House Energy and Commerce Committee or the Senate Labor and Human Resources Committee. However, the House and Senate Appropriations Committees would also have to approve the fees as part of funding for specific agency operations. Any funding levels, even if attained with the help of user fees, can be declared to be in violation of congressional rules if they exceed budget allocation ceilings for Appropriations subcommittees, the document explains. Any "action to dedicate user fees to the support of agency functions through annual appropriations, as required by law, would be counted towards a subcommittee's [budget] ceiling," the report states. FDA is under the budget ceiling of the Agriculture appropriations subcommittee. The Administration's proposed FDA budget for FY 1992 includes $ 197.5 mil. in user fees (see preceding story). The analysis for PMA focuses on technical aspects of user fees rather than the appropriateness of the user fee concept. While special procedures have occasionally been used for escaping the allocation ceilings, "it is not at all clear that the extra money generated by FDA user fees would produce a larger total FDA appropriation" in view of budget pressures that can be expected in fiscal 1992, the report adds. Such an approach "might simply result in the industry being forced to foot part of an FDA bill that stays relatively constant with the money freed up by fee income being used to augment other high priority activities." The White House Office of Management & Budget also would have to agree that fee revenues could be spent on FDA operations without counting against spending limits, the study notes.