The Food and Drug Administration (FDA) Budget: Fact Sheet

Contents

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

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 FY2016, FDA's total program level increased from $3.832 billion to $4.745 billion. Although congressionally appropriated funding increased by 9% over that time period, user fee revenue increased more than 50%. 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. Both the House and Senate Appropriations Committees have reported their FY2017 Agriculture appropriations bills (H.R. 5054, S. 2956). This report will be updated with information on FDA funding for FY2017 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-FY2016, as well as the FY2017 President's 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 FY2016, FDA's total program level increased from $3.832 billion to $4.745 billion. Although congressionally appropriated funding increased by 9% over that time period, user fee revenue increased more than 50%. In FY2016, user fees account for 42% 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 (in millions of dollars)

Sources: FY2012 amounts are from the Sequestration Operating Plan. FY2013 and FY2014 amounts are from the FDA FY2014 Operating Plan. FY2013 figures reflect sequestration. The enacted FY2015 amounts are from the FDA FY2015 Operating Plan, and FY2016 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 to be collected through authorized programs to support specified agency activities regarding prescription drugs, medical devices, animal drugs, animal generic drugs, tobacco products, generic human drugs, biosimilars, mammography quality, color certification, export certification, food reinspection, food recall, the voluntary qualified importer program, outsourcing facilities, priority review vouchers, and third-party auditors.⁵ In addition to the $2.084 billion in user fees from currently authorized programs, the President had requested $202 million in as yet unauthorized fees to support international courier, food establishment registration and inspection, export certification, food imports, cosmetics, and food contact notification activities. With those proposed fees, the President's total user fee request was $2.286 billion, bringing the program level request to $5.029 billion.

Not included in any of these totals is $75 million in new mandatory resources to support the Cancer Moonshot Initiative.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 in authorized user fees. The FY2017 Senate-reported bill, S. 2956, would provide a total program level of $4.854 billion, including $2.772 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

The human drugs program comprises the largest portion of FDA's budget (29% in FY2016), followed by the foods program (21% in FY2016), and the tobacco program (12% in FY2016). 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).

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Footnotes