Contents

• FDA Overview
• Funding Sources
• FDA Recent Funding History and the FY2017 Request
Omnibus

Summary

The Food and Drug Administration (FDA) regulates the safety of foods (including dietary supplements), cosmetics, and radiation-emitting products; the safety and effectiveness of drugs, biologics (e.g., vaccines), and medical devices; and public health aspects of tobacco products. Seven centers within FDA represent the broad program areas for which the agency has responsibility: the Center for Biologics Evaluation and Research (CBER), the Center for Devices and Radiological Health (CDRH), the Center for Drug Evaluation and Research (CDER), the Center for Food Safety and Applied Nutrition (CFSAN), the Center for Veterinary Medicine (CVM), the National Center for Toxicological Research (NCTR), and the Center for Tobacco Products (CTP). Several other offices have agency-wide responsibilities.

FDA's budget has two funding streams: annual appropriations (i.e., discretionary budget authority, or BA) and industry user fees. In FDA's annual appropriation, Congress sets both the total amount of appropriated funds and the amount of user fees that the agency is authorized to collect and obligate for that fiscal year.

Between FY2012 and FY2016FY2017, FDA's total program level increased from $3.832 billion to $4.745 billion. Although congressionally appropriated funding increased by 911% over that time period, user fee revenue increased more than 5047%. The President's FY2017Administration's FY2018 budget request was for a total program level of $4.8265.112 billion, an increase of $81367 million (+2%) over the FY2016 enacted appropriation of $4.745 billion. Both the House and Senate Appropriations Committees have reported their FY2017 Agriculture appropriations bills (H.R. 5054, S. 29568%) over the FY2017 amount ($4.745 billion). This report will be updated with information on FDA funding for FY2017FY2018 once legislative action on appropriations for the new fiscal year is completed.

FDA Overview

The Food and Drug Administration (FDA) regulates the safety of foods (including dietary supplements), cosmetics, and radiation-emitting products; the safety and effectiveness of drugs, biologics (e.g., vaccines), and medical devices; and public health aspects of tobacco products.¹ Although FDA has been a part of the Department of Health and Human Services (HHS) since 1940, the Committees on Appropriations do not consider FDA within the rest of HHS under their Subcommittees on Labor, Health and Human Services, and Education, and Related Agencies. Jurisdiction over FDA's budget remains with the Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies, reflecting FDA's beginnings as part of the Department of Agriculture.

Seven centers within FDA represent the broad program areas for which the agency has responsibility, along with various other offices that have agency-wide responsibilities. Table 1 is organized in a format consistent with the Administration's budget request as presented in the FDA Congressional Justification, as well as with the materials of the Committees on Appropriations—each program area includes funding (FY2012-FY2016FY2013-FY2017, as well as the FY2017 President's Administration's FY2018 request) designated for the responsible FDA center (e.g., CDER or CFSAN) and the portion of funding for the FDA-wide Office of Regulatory Affairs that is committed to that program area.

Funding Sources

FDA's total program level, the amount that FDA can spend, is composed of direct appropriations (also referred to as budget authority) and user fees.² In FDA's annual appropriation, Congress sets both the amount of appropriated funds and the amount of user fees that the agency is authorized to collect and obligate for that fiscal year. Appropriated funds are largely for the Salaries and Expenses account, with a much smaller amount for the Buildings and Facilities account. The different user fees contribute only to the Salaries and Expenses account.

The largest and oldest FDA user fee that is linked to a specific program was first authorized by the Prescription Drug User Fee Act (PDUFA, P.L. 102-571) in 1992. After PDUFA, Congress added user fee authorities regarding medical devices, animal drugs, animal generic drugs, tobacco products, priority review, food reinspection, food recall, voluntary qualified food importer, generic drugs, biosimilars, and, most recently, outsourcing facilities (related to drug compounding) and some wholesale distributors and third-party logistics providers (related to pharmaceutical supply chain security).³ Each of the medical product fee authorities requires reauthorization every five years. Several indefinite authorities apply to fees for mammography inspection, color additive certification, export certification, and priority review vouchers.

FDA Recent Funding History and the FY2017 Request

Between FY2012 and FY2016FY2017, FDA's total program level increased from $3.832 billion to $4.745 billion. Although congressionally appropriated funding increased by 911% over that time period, user fee revenue increased more than 5047%. In FY2016FY2017, user fees account for 4241% of FDA's total program level; in the FY2017 President's budget request, authorized user fees account for 43% of the request.

Figure 1. FDA Budget, by Source, FY2012-FY2017 FY2018 (in millions of dollars)

Sources: FY2012 amounts are from the FY2013 Sequestration Operating Plan. FY2013 and FY2014 amounts are from the FDA FY2014 Operating Plan. FY2013 figures reflect sequestration. The enacted FY2015 and FY2016 amounts are from the FDA FY2015FY2016 Operating Plan, and FY2016. The FY2017 amounts are from the FY2016 enacted appropriations bill (P.L. 114-113). The President's FY2017 Request amount is from the FY2017 FDA Congressional Justification.

The President's FY2017 budget request was for a total program level of $4.826 billion, an increase of $81 million (+2%) over the FY2016 enacted appropriation of $4.745 billion.⁴ The FY2017 President's request includes $2.743 billion in direct appropriations—an increase of $15 million (+0.5%) over the FY2016 enacted level of $2.728 billion. For user fees, the FY2017 President's request was for $2.084 billion (an increase of $67 million or 3% over the enacted FY2016 amount of $2.017 billion) in fees 2017 Consolidated Appropriations Act (P.L. 115-31) and the accompanying Explanatory Statement, as well as the 2017 Further Continuing and Security Assistance Appropriations Act (P.L. 114-254). The FY2018 request amounts are from the FY2018 FDA Justification of Estimates for Appropriations Committees, https://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/BudgetReports/UCM559923.pdf.

The Administration's FY2018 request includes a total program level of $5.112 billion, an increase of $367 million (+8%) over the FY2017 enacted amount.⁵ The FY2018 request proposes $1.888 billion in direct appropriations—a decrease of $903 million (-32%) from the FY2017 enacted amount. The FY2018 request includes in the direct appropriation $60 million from the FDA Innovation Account, which was established by Section 1002 of the 21^st Century Cures Act (P.L. 114-255).⁶

Both the House and Senate Appropriations Committees have reported their FY2017 Agriculture appropriations bills (H.R. 5054, S. 2956). The FY2017 House-reported bill, H.R. 5054, would provide a total program level of $4.824 billion, including $2.766 billion in direct appropriations and $2.058 billion in authorized user fees. The FY2017 Senate-reported bill, S. 2956, would provide a total program level of $4.854 billion, including $2.772 billion in direct appropriations and $2.083 billion in authorized user fees. Neither appropriations committee's recommendations included any proposed user fees. In addition to comments on specific amounts of funding, the House and Senate Committees on Appropriations lay out in the reports that accompanied their respectively reported bills their concerns with specific FDA activities, and provide various directives and encouragements to the agency. While directions and suggestions in the committee reports do not have statutory stature, they convey to the agency the concerns of committees that determine future appropriations.⁷ Not included in any of these totals is the $10 million (to the Salaries and Expenses account) provided by Section 752 of the FY2017 enacted appropriation for FDA to "prevent, prepare for, and respond to emerging health threats, including the Ebola and Zika viruses, domestically and internationally and to develop necessary medical countermeasures and vaccines, including the review, regulation, and post market surveillance of vaccines and therapies, and for related administrative activities ... to remain available until expended."

The human drugs program comprises the largest portion of FDA's budget (2928% in FY2016FY2017), followed by the foods program (2122% in FY2016FY2017), and the tobacco program (1213% in FY2016FY2017). Table 1 displays, by program area, the budget authority (direct appropriations), user fees, and total program levels for FDA in previous years: FY2012 (as calculated in the sequestration operating plan), FY2013 and FY2014 (as calculated by the 2014 operating plan), FY2015 (as calculated by the 2015 operating plan), FY2016 (as enacted in P.L. 114-113), and the FY2017 President's budget request.

Consistent with the Administration and congressional committee formats, each program area in Table 1 includes funding designated for the responsible FDA center (e.g., CDER or CFSAN) and the portion of effort budgeted for the agency-wide Office of Regulatory Affairs to commit to that area. It also apportions user fee revenue across the program areas as indicated in the Administration's request (e.g., 90% of the animal drug user fee revenue is designated for the animal drugs and feeds program, with the rest going to the categories of headquarters and Office of the Commissioner, General Services Administration [GSA] rent, and other rent and rent-related activities).

Author Contact Information

Footnotes

The Cures Act established an FDA Innovation Account, to which a total of $500 million is authorized to be transferred over a nine-year period (FY2017-FY2025) for certain FDA activities; the law specified that amounts in the account are not available until appropriated in subsequent appropriations acts and that once made available, these amounts are available until expended. For each of fiscal years 2017 through 2025, the following amounts are authorized to be transferred to the FDA Innovation Account: $20 million in FY2017; $60 million in FY2018; $70 million in FY2019; $75 million in FY2020; $70 million in FY2021; $50 million in FY2022; $50 million in FY2023; $50 million in FY2024; and $55 million in FY2025.