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

Contents

• FDA Overview
• Funding Sources
• FDA Funding History and FY2026 Appropriations

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 the public health aspects of tobacco products. FDA is organized into various offices and centers that carry out the agency's regulatory responsibilities. The Office of the Commissioner and six other program area centers oversee the core functions of the agency. These include 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 Tobacco Products (CTP), the Center for Veterinary Medicine, and the Human Foods Program. In addition, FDA has numerous offices, including the Office of Inspections and Investigations (OII), the Office of Operations, the Office of the Chief Scientist, the Office of External Affairs, and the Office of Women's Health, among others. The National Center for Toxicological Research (NCTR) is housed within the Office of the Chief Scientist.

FDA's total program level, the amount that FDA can spend, comprises discretionary appropriations from two different sources: annual appropriations (i.e., discretionary budget authority, or BA) and user fees paid by the regulated industry (e.g., drug manufacturers). 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 FY2021 and FY2026, FDA's enacted annual total program level (excluding amounts enacted in supplemental appropriations measures or in the American Rescue Plan Act [P.L. 117-2]) increased from $6.050 billion to $7.069 billion. Over that time period, congressionally appropriated funding increased by about 2%, while user fee revenue increased by more than 30%. The Administration's FY2027 request for a total program level of $7.227 billion would be an increase of more than $160 million (+2%) over the FY2026-enacted amount.

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 funding for FDA with most of 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 beginning as part of the Department of Agriculture.

FDA's organization consists of various offices and centers that carry out the agency's regulatory responsibilities. The Office of the Commissioner and six other program area centers oversee the core functions of the agency. These include 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 Tobacco Products (CTP), the Center for Veterinary Medicine, and the Human Foods Program. In addition, FDA has numerous offices, including the Office of Inspections and Investigations (OII),² the Office of Operations, the Office of the Chief Scientist, the Office of External Affairs, and the Office of Women's Health, among others.³ The National Center for Toxicological Research (NCTR) is housed within the Office of the Chief Scientist.

The agency's budget—as presented in the Justifications of Estimates for Appropriations Committees (referred to as Congressional Justifications, or CJs) and the materials of the Committees on Appropriations—is organized by program area. Consistent with these budget documents, Table 1 displays funding for FY2021 through FY2026, as well as the FDA's FY2027 request, by program area (e.g., Human Foods, Human Drugs).

Funding Sources

FDA's total program level, the amount that FDA can spend, is composed of discretionary appropriations from two different sources. First, FDA is appropriated funding out of the Treasury's General Fund. (This is the usual source of funding for discretionary appropriations, and, in keeping with the conventions used in FDA budget documents, is referred to in this report as budget authority.)⁴ Second, FDA also is allowed to collect and obligate user fees.⁵ FDA's annual appropriation sets both the amount of budget authority and the amount of user fees that the agency is authorized to collect and obligate for that fiscal year. The budget authority appropriations are largely for the Salaries and Expenses account, with a smaller amount for the Buildings and Facilities account, the latter of which is used for any changes to, or purchases of, fixed equipment and facilities used by FDA.⁶ The appropriations of the several different user fees contribute only to the Salaries and Expenses account.

For each of the FDA user fee programs, the authorizing legislation establishes the legal framework that governs the fees, while the annual appropriations acts provide FDA the authority to collect and expend them. 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. PDUFA sets the total amount of user fee revenue for the first year, provides a formula for annual adjustments, and includes limiting conditions to ensure that user fees supplement congressional appropriations (i.e., General Fund appropriations) rather than replace them. After PDUFA, Congress added other user fee authorities, for example, regarding medical devices, biosimilar biologics. animal drugs, generic drugs, tobacco products, and other FDA-regulated products and activities. Generally, the medical product user fees have been authorized in legislation on a five-year cycle.⁷ Each five-year authorization sets a total amount of fee revenue for the first year and provides a formula for annual adjustments to that total based on inflation and other adjustments. In contrast, the nonmedical product user fee programs do not require reauthorization and are generally indefinite. Table A-1 presents the list of user fees that contribute to FDA's budget, sorted by the dollar amount they contribute to the agency's FY2027 budget request. The table also includes the authorizing legislation for each current user fee, specifies whether the user fee program requires reauthorization, and provides the most recent reauthorization, if applicable.

The 21^st Century Cures Act (Cures Act; P.L. 114-255), signed into law in December 2016, made several changes to the drug and device approval pathways at FDA to support innovation and accelerate development and review of certain medical products (e.g., combination products, antimicrobials, drugs for rare disease, and regenerative therapies). To fund these activities, the Cures Act established an FDA Innovation Account to which a total of $500 million was authorized to be transferred over a nine-year period (FY2017-FY2025).⁸ The law specified that amounts in the account were not available until appropriated in subsequent appropriations acts and that once made available, these amounts are available until expended. The amounts subsequently appropriated (i.e., the budget authority and the resulting outlays) for FY2017 through FY2025, up to the amounts transferred, were to be subtracted from any cost estimates provided for purposes of budget controls. Effectively, the appropriations from the account would not be counted against any spending limits, such as the statutory discretionary spending limits; that is, the amounts appropriated from the account would be considered outside those limits for FY2017 through FY2025.

In general, this report focuses on funding provided as part of the regular appropriations process. As such, this report does not include in the total amounts emergency funding provided in supplemental appropriations acts; these supplemental amounts are noted, where applicable, in the Table 1 notes. Given the historical significance of the COVID-19 pandemic and the provision of additional funding in FY2020 and FY2021 for FDA to respond to the pandemic, this report includes a summary of this funding in Appendix B.

FDA Funding History and FY2026 Appropriations

Since the enactment of PDUFA in 1992, FDA's spending from user fees has generally increased, both in absolute terms and as a share of FDA's total budget, accounting for nearly 50% of the agency's FY2025 total program level (see Figure 1).

Figure 1. FDA Spending, by Source, FY1992-FY2025 (in millions of dollars)

Source: Figure created by CRS using the FY1992 through FY2027 FDA CJs. Notes: These amounts have not been adjusted for inflation. The purpose of this figure is to show how FDA's spending has changed over time to include a greater proportion from user fees compared to budget authority. The amounts used in this figure are from the "Actual" columns in the FDA CJs, with the exception of FY2021-FY2025, which reflect "Final" columns. Beginning with the FY2021 CJ, the FDA began using the term "final" to refer to certain prior-year numbers. Earlier FDA CJs used the term "actual" when referring to such numbers. This report follows the FDA wording convention in the applicable source document. PDUFA = Prescription Drug User Fee Act; MDUFMA = Medical Device User Fee and Modernization Act; ADUFA = Animal Drug User Fee Act; AGDUFA = Animal Generic Drug User Fee Act; TCA = The Family Smoking Prevention and Tobacco Control Act; FSMA = Food Safety Modernization Act; BsUFA = Biosimilar User Fee Act; GDUFA = Generic Drug User Fee Amendments; OMUFA = Over-the-Counter Monograph User Fee Act.

Between FY2021 and FY2026, FDA's enacted annual total program level (excluding amounts enacted in supplemental appropriations measures or in the American Rescue Plan Act)⁹ increased from $6.050 billion to $7.069 billion (see Table 1). Over that time period, congressionally appropriated funding increased by 7%, while user fee revenue increased by more than 39%. The FY2026-enacted appropriation provides $3.428 billion in budget authority as well as an additional $3.641 billion in user fees.

The Administration's FY2027 request for a total program level of $7.158 billion would be an increase of $89 million (+7%) over the FY2026-enacted amount. The FY2027 request proposes $3.308 billion in budget authority—a decrease of $119 million (-3%) from the FY2026-enacted amount.¹⁰ Table 1 includes FDA Innovation Account money in the total budget authority and program level amounts for FY2021 through FY2026, consistent with the budget display conventions used in the FDA CJs.

The FY2027 budget request proposes $3.850 billion in user fees—an increase of about $209 million (+6%) over the FY2026-enacted amount—to be collected through authorized programs to support specified agency activities regarding prescription drugs, over-the-counter 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. In addition to the $3.850 billion in user fees from currently authorized programs, the FY2027 request includes an additional $71 million in unauthorized user fees, which would come from a proposed new foreign food facility registration fee.¹¹

It is estimated that including the proposed fees would bring the FDA's total requested user fee amount to $3.921 billion.

Consistent with the Administration's and congressional budget display conventions, Table 1 displays, by program area, the budget authority (direct appropriations), user fees (excluding proposed, unauthorized fees), and total program levels for FDA from FY2021 through FY2026 and the FY2027 request. The human drugs program comprises the largest portion of FDA's budget (35% in FY2026), followed by the human foods program (17% in FY2026), and the devices and radiological health program (13% in FY2026).

Appendix A. FDA User Fee Authorizations and Anticipated Collections

Appendix B. COVID-19 and FDA Supplemental Appropriations

In FY2020 and FY2021, Congress and the President enacted a series of Coronavirus Disease 2019 (COVID-19)-related supplemental appropriations acts to respond to the pandemic. Across four of the five supplemental appropriations acts, FDA received a total of $218 million in new emergency-designated discretionary funding or directed transfers. This included $196 million to the agency's salaries and expenses account to "prevent, prepare for, and respond to coronavirus domestically and internationally." These funds were to be used for activities such as pre- and post-market work on medical countermeasures (MCMs), emergency use authorizations (EUAs), monitoring of medical product supply chains, advanced manufacturing, and related administrative activities. In addition, the Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA; P.L. 116-139) directed a transfer of $22 million from the Public Health and Social Services Emergency Fund (PHSSEF) to FDA to support activities associated with "diagnostic, serological, antigen, and other tests, and related administrative activities." These four supplemental laws are as follows:

• Division A of the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (P.L. 116-123), enacted on March 6, 2020, provided $61 million to FDA for domestic and international efforts "to prevent, prepare for, and respond to coronavirus" to be used for activities such as development of medical countermeasures (e.g., therapeutics, vaccines, and diagnostics), advanced manufacturing of medical products, monitoring of supply chains, and related administrative activities.
• Division B of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136), enacted on March 27, 2020, provided $80 million to FDA "to prevent, prepare for, and respond to coronavirus," for efforts on potential medical product shortages, advanced manufacturing of medical products, and development of needed medical countermeasures, including therapeutics, vaccines and diagnostics, and related administrative activities.
• Division B of the PPPHCEA (P.L. 116-139), enacted on April 24, 2020, provided $22 million to FDA, as a transfer from the PHSSEF account, to support activities associated with "diagnostic, serological, antigen, and other tests, and related administrative activities."
• Division M of Consolidated Appropriations Act, 2021 (P.L. 116-260), enacted on December 27, 2020, provided $55 million to FDA "to prevent, prepare for, and respond to coronavirus, domestically or internationally, of which $9,000,000 shall be for the development of necessary medical countermeasures and vaccines, $30,500,000 shall be for advanced manufacturing for medical products, $1,500,000 shall be for the monitoring of medical product supply chains, $7,600,000 shall be for other public health research and response investments, $1,400,000 shall be for data management operation tools, and $5,000,000 shall be for after action review activities."

In addition to the supplemental appropriations acts listed above, on March 11, 2021, the American Rescue Plan Act of 2021 (ARPA, P.L. 117-2) was enacted through the budget reconciliation process. Section 2304 of ARPA provided $500 million in mandatory funding to the HHS Secretary, to remain available until expended, for various MCM activities at FDA. This includes FDA's evaluation of continued performance, safety, and effectiveness of COVID-19 vaccines, therapeutics, and diagnostics, including with respect to emerging SARS-CoV-2 variants; facilitation of advanced continuous manufacturing activities related to the manufacture of vaccines and related materials; conduct of inspections related to manufacturing of vaccines, therapeutics, and devices that were delayed or canceled because of COVID-19; review of devices authorized for use for the treatment, prevention, or diagnosis of COVID-19; and oversight of the supply chain and mitigation of COVID-19 MCM shortages.

Because the funds listed in this appendix were provided outside of the regular annual appropriations process, these amounts are not included in the total amounts listed in the text or in Table 1.

Sylvia Bryan, former Research Assistant, provided significant support in the authoring of this fact sheet.

Footnotes