Order Code RL34638
The FDA FY2009 Budget
August 25, 2008
Judith A. Johnson, Sarah A. Lister, Donna V. Porter,
Pamela W. Smith, Susan Thaul, and Erin D. Williams
Domestic Social Policy Division

---

The FDA FY2009 Budget
Summary
The Administration’s FY2009 budget request of $2.676 billion for the Food and
Drug Administration (FDA) would provide a 17.9% increase ($406 million) over
FY2008. User fees would make up 23.5% of the total amount requested and would
account for 19.8% of the proposed increase. These figures reflect the
Administration’s amended request, issued in June 2008, which added $275 million
to the amount originally requested by the Administration in February 2008. Based
on the initial request, cost-of-living pay increases, rather than new program activities,
would have accounted for about half of the total increase over FY2008. With the
amended request, such pay increases would use only 7.7%.
The amended FY2009 request, according to budget documents, would provide
for expanded activities to ensure the safety of foods and drugs, enhance workforce
development and recruitment, and accelerate the availability of new medical
products.
The user fee request includes $609 million in currently authorized fees and $21
million for generic human and animal drug review. The budget justification
documents include an additional $27 million in proposed fees for reinspections and
food and animal feed certification.
The Senate Committee on Appropriations, in S. 3289, recommended an FY2009
total of $2.646 billion for FDA. It did not include the generic drug user fees, the
proposed reinspection and certification fees, or the authorized fees for the advisory
review of direct-to-consumer television prescription drug advertising. Updates to
this report will track legislative activity as the House Committee on Appropriations
and the full Senate and House consider FY2009 appropriations.

---

Contents
Budget Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Foods Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Human Drugs Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Biologics Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Animal Drugs and Feeds Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Devices and Radiological Health Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
List of Tables
Table 1. FDA Appropriations: FY2008 Enacted, FY2009 President’s Request,
and FY2009 Senate Committee on Apppropriations Recommendation . . . . 7

---

The FDA FY2009 Budget
Budget Overview
FDA regulates more than $1 trillion worth of products annually.1 It regulates
the safety of foods (including animal feeds) and cosmetics, and the safety and
effectiveness of drugs, biologics (e.g., vaccines), and medical devices. FDA’s annual
funding is provided in appropriations for Agriculture, Rural Development, Food and
Drug Administration, and Related Agencies, and is handled by the corresponding
appropriations subcommittees in the House and Senate. For historical information
on the FDA’s budget and statutory authorities, and descriptions of the responsibilities
of FDA program areas, see CRS Report RL34334, The Food and Drug
Administration: Budget and Statutory History, FY1980-FY2007, by Judith A.
Johnson, Donna V. Porter, Susan Thaul, and Erin D. Williams.
The Administration’s FY2009 budget request for FDA (FY2009 request) is
$2.676 billion, an increase of $406 million (17.9%) over FY2008.2 (See Table 1 at
the end of this report.) The FY2009 request is composed of budget authority (also
called direct appropriations) of $2.046 billion and user fees of $630 million. The
budget authority amount is a $326 million (18.9%) increase over FY2008. Of this
requested amount, $25 million would cover cost-of-living pay increases. The
requested user fee amounts include $609 million in currently authorized fees and $21
million for proposed new user fees for generic human and animal drugs for which
new authority was needed.3 The amount for currently authorized fees represents a
$59 million (10.8%) increase over FY2008 and includes $14 million in new fees for
the advisory review of direct-to-consumer (DTC) television advertisements, a
1 FDA, “Frequently Asked Questions (FAQs),” at [http://www.fda.gov/opacom/faqs/faqs.
html].
2 Budget amounts and program details in this report are from FDA, Fiscal Year 2009
Justification of Estimates for Appropriations Committees, February 2008, at
[http://www.fda.gov/oc/oms/ofm/budget/documentation.htm]; letter from the President to
the House Speaker amending the FY2009 request for the Department of Health and Human
Services, June 9, 2008, at [http://www.whitehouse.gov/omb/budget/amendments/
amendment2_6_9_08.pdf]; additional detail of the amended request provided to CRS by the
FDA Office of Financial Management (amended budget authority table and telephone
conversations), August 2008; and the Senate Committee on Appropriations
recommendations as reported in S. 3289 and S.Rept. 110-426, July 21, 2008.
3 The Animal Drug User Fee Amendments of 2008 (P.L. 110-316) in August 2008
authorized the animal generic drug user fee program. FDA’s FY2009 budget justification
also includes proposals for two user fees that would reimburse FDA for activities currently
funded through budget authority. The fees would cover $23.3 million for reinspections of
FDA-regulated facilities and $3.7 million for issuing food and animal feed export
certificates. (The fees are listed as “non-add” items in the budget request tables.)

---

CRS-2
program authorized in the FDA Amendments Act of 2007 (FDAAA, P.L. 110-85).4
The additional FY2009 funding would support, among other things, activities
included in FDAAA, the agency’s Food Protection Plan, and the government-wide
Action Plan for Import Safety.5
The Administration submitted its FY2009 request in February 2008. Within the
following months, two respected sources of expertise expressed continuing concern
that the FDA budget was inadequate to meet the challenges the agency faces. The
FDA Science Board, in response to congressional questions regarding its report, FDA
Science and Mission at Risk, recommended a $375 million increase in the
appropriated (non-user fee) budget in FY2009.6 In May 2008, FDA Commissioner
Andrew von Eschenbach released a Professional Judgment Budget that noted
resource needs of $275 million to supplement the FY2008 budget.7 The President
submitted an amended FY2009 request in June 2008, which included an additional
$275 million for FDA activities involving food protection, enhanced inspection of
imported products, and monitoring the safety of drugs, devices, and biologics after
they are approved. The Senate Committee on Appropriations recommended FY2009
direct appropriations for FDA that essentially matched the Administration’s amended
request. It did not follow the agency’s request for user fees: the Senate committee
recommendations did not include revenue from the proposed human or animal
generic drug user fee programs, or from the FDAAA-authorized program to collect
user fees for the advisory review of DTC television advertisements of prescription
drugs. Furthermore, S.Rept. 110-426 does not include those fees in its representation
of the Administration’s request.
FDA’s budget funds both agency-wide activities and specific program areas.
Agency-wide activities include Headquarters and the Office of the Commissioner,
which provides program direction and administrative services; rents; and buildings
and facilities. The agency supports six program areas. Five of these administer
FDA’s regulatory responsibilities for products and are discussed in separate sections
of this report. The sixth, Toxicological Research, is non-regulatory and conducts or
coordinates scientific research, technical advice, and training to inform FDA’s
regulatory decisions. For each of the five regulatory programs, FDA’s congressional
budget justification provides funding information divided into Center Activities and
Field Activities.
4 See CRS Report RL34465, FDA Amendments Act of 2007 (P.L. 110-85), by Erin D.
Williams and Susan Thaul, and CRS Report RS22779, Food Safety: Provisions in the Food
and Drug Administration Amendments Act of 2007, by Donna V. Porter.
5 See “FDA Key Initiatives” at [http://www.fda.gov/oc/initiatives/advance/].
6 FDA Science and Mission at Risk: Report of the FDA Science Board’s Subcommittee on
Science and Technology — Estimated Resources Required for Implementation, February 25,
2008, in response to the request of Representatives Dingell, Waxman, Stupak, and Pallone,
at [http://energycommerce.house.gov/Press_110/022508.ScienceBoardReport.Estimated
Resources.pdf].
7 The Commissioner’s Professional Judgment Budget is available at
[http://www.fdanews.com/ext/files/Drug_Industry_Daily/vonEschenbachSpector.pdf].

---

CRS-3
Field Activities — which include inspection and laboratory testing for
regulatory purposes, and enforcement activities — are administered by FDA’s Office
of Regulatory Affairs (ORA). The FDA’s congressional budget justification
describes the Field Activities/ORA but does not include a separate request. The
requested resources are assigned to each FDA regulatory program and included in
those program budgets, which show considerable variation in the use of Field
activity. For FY2009, summing across the program areas, FDA requested $716
million for Field Activities/ORA. This represents 26.8% of the agency’s total request
(35% of the requested budget authority) and includes a $161 million (29.2%) increase
over the ORA FY2008 budget.
The 110th Congress has been addressing the product inspection and standards
enforcement functions of FDA in hearings and proposed legislation. Various
committee Members have requested information on inspection staffing by program
area. However, agency statements suggest that field inspectors may be redeployed
to meet critical needs, such as foodborne outbreaks, rather than being permanently
assigned to one program area. Some studies suggest that budget constraints have
prevented FDA from making all of its required inspections. For example, a 2007
GAO report found that FDA had not inspected certain domestic medical device
manufacturing establishments once every two years as required by law.8 In addition,
deaths associated with contaminated heparin (a blood-thinning drug) have added to
concern about whether the FDA’s field activities are adequate. Thus, field activity
funding and management are among the key challenges FDA faces.
The remainder of this report provides brief program descriptions and synopses
of the FY2009 budget requests for each of FDA’s regulatory program areas. Table
1 displays FDA’s budget items by budget authority, user fees, and total program
levels, for FY2007, FY2008, and the FY2009 request.
Foods Program
The Foods Program is responsible for ensuring that most foods for humans are
safe, sanitary, wholesome, and accurately labeled,9 and for ensuring that cosmetic
products are safe and properly labeled. The Foods Program addresses its regulatory
responsibilities in four areas: food protection, improved nutrition, dietary supplement
safety, and cosmetic safety. It is administered by FDA’s Center for Food Safety and
Applied Nutrition (CFSAN). The program is funded through budget authority and
has no authorized user fees.
The FY2009 request for the Foods Program is $661 million, a $151 million
increase (29.6%) over FY2008, all from budget authority. The Senate committee
recommended the same amount. More than two-thirds of the Foods Program budget
8 The requirement is at 21 U.S.C. §360(h). Government Accountability Office, Medical
Devices: Status of FDA’s Program for Inspections by Accredited Organizations, Report to
Congress, GAO-07-157 (January 2007).
9 This responsibility includes all domestic and imported food, with the exception of meat,
poultry, and processed eggs, which are regulated by the U.S. Department of Agriculture.

---

CRS-4
is devoted to Field Activities. The primary focus of the request is the Protecting
America’s Food Supply Initiative, including implementing the goals of FDA’s Food
Protection Plan, released in November 2007.10 Key challenges for the program
include whether the agency’s resources are adequate to oversee the number and
diversity of facilities in the food system, and whether the agency’s approach to
inspection is properly aligned toward food safety risks, especially for imports of
produce and seafood.
Human Drugs Program
The Human Drugs Program is responsible for ensuring that prescription and
nonprescription (over-the-counter) drugs, both branded and generic, are safe and
effective. It executes its regulatory responsibilities in three areas: new drug safety
and effectiveness, generic drug review, and postmarket safety and surveillance. The
program is administered by FDA’s Center for Drug Evaluation and Research
(CDER). It is funded through both budget authority and user fees authorized by the
Prescription Drug User Fee Act (PDUFA).11
The FY2009 request for the Human Drugs Program is $789 million ($407
million in budget authority and $381 million in user fees), a $108 million (15.9%)
increase over FY2008. The requested amount for user fees includes increased
revenues from PDUFA (up $26.5 million to $354 million), a new user fee for the
advisory review of DTC television advertisements ($12 million), and a proposed new
user fee program to support the review of generic drug applications (Generic Drug
User Fee Act, GDUFA, $15 million). The Senate committee recommendation ($763
million total) matched the budget authority request but did not include the requested
fees for DTC advertisement review or the proposed GDUFA. Key challenges for the
program include ensuring the safety of imported drugs and ingredients, and
identifying and acting on emerging safety and effectiveness information about drugs
once they are on the market.
Biologics Program
The Biologics Program is responsible for ensuring the safety, purity, potency,
and effectiveness of biological products. The program carries out its regulatory
responsibilities in three program areas: blood and blood products; vaccines and
allergenics; and cells, tissues, and gene therapies. It is administered by FDA’s Center
for Biologics Evaluation and Research (CBER) and operates with both budget
authority and user fees authorized by PDUFA and the Medical Device User Fee Act
(MDUFA).12
10 The plan is at [http://www.fda.gov/oc/initiatives/advance/food/plan.html].
11 See CRS Report RL33914, The Prescription Drug User Fee Act (PDUFA): History,
Reauthorization in 2007, and Effect on FDA, by Susan Thaul.
12 See CRS Report RL33914, The Prescription Drug User Fee Act (PDUFA): History,
(continued...)

---

CRS-5
The FY2009 request for the Biologics Program is $268 million ($181 million
in budget authority and $87 million in user fees), a $32 million (13.6%) increase over
FY2008. The increase would provide additional budget authority to cover blood and
tissue safety, and to help cover a cost-of-living pay increase for the entire program.
The requested amount for user fees includes increased revenue from PDUFA (up
$4.3 million to $74.4 million), MDUFA (up almost $1 million to $11.5 million), and
the new fee for review of DTC advertisements ($1.4 million). The Senate committee
recommendation ($268 million total) matched the budget authority request but did
not include the requested fees for DTC advertisement review. For FY2009, the Bush
Administration is seeking new statutory authority that will allow FDA to approve
abbreviated applications for follow-on biologics.13 The Administration would like
the legislative proposal to include, among other things, a public guidance process,
prescribed data requirements, safety labeling related to interchangeability, intellectual
property protections, and the implementation of new user fees to cover the associated
costs. A key challenge will be negotiating a compromise among several existing
legislative proposals and the Administration’s position.
Animal Drugs and Feeds Program
The Animal Drugs and Feeds Program regulates animal drugs and devices to
ensure their safety and effectiveness, and regulates the safety of animal feeds,
including pet food.14 The program is administered by FDA’s Center for Veterinary
Medicine (CVM). FDA claims that 70% of CVM’s work is devoted to the safety of
the food supply, largely through its activities to ensure the safety of drugs and feeds
used for food-producing animals. In FY2008, the program was funded through both
budget authority and user fees for brand-name animal drugs authorized by the Animal
Drug User Fee Act (ADUFA).15
The FY2009 request for the Animal Drugs and Feeds Program is $132 million,
a $23.5 million (21.7%) increase over FY2008. The total requested amount consists
of $114 million in budget authority, $14 million in authority for ADUFA, and $4
million for a proposed Animal Generic Drug User Act (AGDUFA).16 More than $7
million of the requested increase would be used to support the Protecting America’s
12 (...continued)
Reauthorization in 2007, and Effect on FDA, by Susan Thaul, and CRS Report RL33981,
Medical Device User Fee and Modernization Act (MDUFMA) Reauthorization, by Erin D.
Williams.
13 A follow-on biologic is similar but not identical to the brand-name, or innovator, biologic
product, such as a drug or a vaccine, that is made from living organisms. See CRS Report
RL34045, FDA Regulation of Follow-On Biologics, by Judith A. Johnson.
14 Veterinary biologics are regulated by the U.S. Department of Agriculture.
15 See CRS Report RL34459, Animal Drug User Fee Programs, by Sarah A. Lister.
16 ADUFA authority was to sunset October 1, 2008, and the generic fee program was not
authorized at the time of the budget request. P.L. 110-316, the Animal Drug User Fee
Amendments of 2008, enacted in August 2008, reauthorized the brand-name animal drug
user fee program, and authorized the new user fee program for generic animal drugs.

---

CRS-6
Food Supply Initiative, including the development of processing and ingredient
standards for animal foods as required by FDAAA.17 The increase would also allow
workforce development and the expansion of existing product safety and activities.
In July 2008, the Senate committee recommended $128 million total. This matched
the budget authority request and included the requested fees for ADUFA, contingent
upon its reauthorization, but did not include the requested fees for AGDUFA, which
had not yet been authorized. The Animal Drugs and Feeds Program faces challenges
similar to those for comparable activities in the other programs. These challenges
include evaluating drug approvals efficiently without compromising safety,
monitoring drug safety after approval, and developing effective strategies to ensure
the safety of imports.
Devices and Radiological Health Program
The Devices and Radiological Health Program is responsible for ensuring the
safety and effectiveness of medical devices, and eliminating unnecessary exposure
to radiation from medical and consumer products. The program divides its regulatory
responsibilities into three areas: premarket device safety and effectiveness,
postmarket safety and surveillance, and the Mammography Quality Standards Act
(MQSA). The program is administered primarily by FDA’s Center for Devices and
Radiological Health (CDRH), and in part by CBER. It operates with both budget
authority and user fees authorized by MDUFA and MQSA.
The FY2009 request for the Devices and Radiological Health Program is $326
million ($277 million in budget authority and $49 million in user fees), a $42.6
million (15%) increase over FY2008. Most of the increase would cover a cost-of-
living pay increase. A smaller portion would be used for the Modernizing Medical
Product Safety and Development Initiative (MMPSDI) of the Administration’s
Import Safety Action Plan. The Senate committee recommendation ($327 million
total) closely matched the FY2009 request. Ensuring the safety of imported devices
is a key challenge for the program, as suggested by the request related to MMPSDI.
A second challenge is ensuring the safety of medical devices already on the market.
This may be complicated by the requirement that device user fees, which constitute
an increasing proportion of the device budget, be spent only on activities related to
the approval or clearance of new devices.
17 For more information, see CRS Report RS22779, Food Safety: Provisions in the Food and
Drug Administration Amendments Act of 2007, by Donna V. Porter.

---

CRS-7
Table 1. FDA Appropriations: FY2008 Enacted, FY2009
President’s Request, and FY2009 Senate Committee on
Apppropriations Recommendation
(dollars in millions)
FY2008
FY2009 President’s FY2009 Senate
Program Area
Funds
Enacted
Requesta
Committeeb
Foods
BA
510
661
661
(no user fees)
Total
510
661
661
Human drugs
BA
353
407
410
Fees
327
381
354
Total
680
789
763
Biologics
BA
155
181
182
Fees
81
87
86
Total
236
268
268
Animal drugs and feeds
BA
97
114
114
Fees
12
18
14
Total
109
132
128
Devices and radiological health
BA
238
277
278
Fees
46
49
49
Total
284
326
327
Toxicological research
BA
44
52
52
(no user fees)
Total
44
52
52
Headquarters and Office of the Commissioner
BA
97
122
123
Fees
36
40
39
Total
133
162
161
GSA rent
BA
131
131
131
Fees
29
25
21
Total
159
155
151
Other rent and rent-related (including White Oak
BA
89
89
89
consolidation)
Fees
10
20
23
Total
99
119
112
Export and color certification funds
Fees
10
10
10
(user fees only)
Total
10
10
10
Subtotal, Salaries & Expenses
BA
1,714
2,034
2,039
Fees
549
630
595
Total
2,264
2,664
2,633
Buildings & Facilities
BA
6
12
12
(no user fees)
Total
6
12
12
Total, FDA Budget Authority
BA
1,720
2,046
2,051
Total, FDA User Fees
Fees
549
630
595
TOTAL, FDA PROGRAM LEVEL
Total
2,270
2,676
2,646
Sources: Adapted by CRS from FDA, Fiscal Year 2009 Justification of Estimates for Appropriations
Committees, February 2008, at [http://www.fda.gov/oc/oms/ofm/budget/documentation.htm];
Administration’s amended FY2009 request, at [http://www.whitehouse.gov/omb/budget/amendments/
amendment2_6_9_08.pdf]; detail provided by the FDA Office of Financial Management, August
2008; and S. 3289 and S.Rept. 110-426, July 21, 2008.
Notes: Totals and percentages may not compute exactly due to rounding. BA = budget authority.
Fees = user fees. Total (program level) = budget authority plus user fees.
a. Includes, in addition to previously authorized user fees, $35.5 million in new user fees from DTC
television advertisement advisory review ($14.0 million), authorized by P.L. 110-85 (FDAAA);
animal generic drug user fees (AGDUFA, $4.8 million), authorized by P.L. 110-316 (ADUFA
2008); and proposed generic drug user fees (GDUFA, $16.6 million).
b. Does not include user fees for DTC advertisement review, GDUFA, or AGDUFA

---