The FDA 2009 Budget Request

The Administration's FY2009 budget request of $2.4 billion for the Food and Drug Administration (FDA) would provide a 5.7% increase ($130 million) over FY2008. User fees would make up about 26% of the total amount requested and would account for 61% of the proposed increase. Budget documents indicate that the additional funding would provide for expanded activities to ensure the safety of foods and drugs, as well as to accelerate the availability of new medical products. About half of the requested increase would be used for cost-of-living pay increases, as opposed to new program activities.



Order Code RS22883
May 19, 2008
The FDA FY2009 Budget Request
Judith A. Johnson, Sarah A. Lister, Donna V. Porter, Pamela W. Smith,
Susan Thaul, and Erin D. Williams
Domestic Social Policy Division
Summary
The Administration’s FY2009 budget request of $2.4 billion for the Food and Drug
Administration (FDA) would provide a 5.7% increase ($130 million) over FY2008.
User fees would make up about 26% of the total amount requested and would account
for 61% of the proposed increase. Within the five programs that administer FDA’s
regulatory responsibilities, proposed increases range from 2.5% for Devices and
Radiological Health to 9.9% for Animal Drugs and Feeds. Budget documents indicate
that the additional funding would provide for expanded activities to ensure the safety of
foods and drugs, as well as to accelerate the availability of new medical products. About
half of the requested increase would be used for cost-of-living pay increases, as opposed
to new program activities.
Budget Overview.1 FDA regulates more than $1 trillion worth of products
annually.2 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
subcommittees in the House and Senate.
The Administration’s FY2009 budget request for FDA is $2.4 billion, an increase
of $130 million, or 5.7%, over FY2008.3 (See Table 1 at the end of this report.) The
FY2009 proposal is composed of budget authority (also called direct appropriations) of
$1.771 billion and user fees of $628 million. The budget authority amount is a $51
million (3%) increase over FY2008. Of this requested amount, $25 million would cover
1 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.
2 FDA, “Frequently Asked Questions (FAQs),” at [http://www.fda.gov/opacom/faqs/faqs.html].
3 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].

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cost-of-living pay increases. The requested user fee amounts include $607 million in
currently authorized fees and $21 million for proposed new user fees for generic human
and animal drugs for which new authority would be needed.4 The amount for currently
authorized fees represents a $58 million (11%) increase over FY2008 and includes $14
million in new fees for the advisory review of direct-to-consumer (DTC) television
advertisements, a program authorized in the FDA Amendments Act of 2007 (FDAAA,
P.L. 110-85).5 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.6 Some believe that the Administration’s
FY2009 FDA request is inadequate, given the challenges the agency faces.7 These
challenges include ensuring the safety of a growing number of imported products and
monitoring the safety of drugs, devices, and biologics after they are approved.
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.
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 requests $608 million for Field Activities/ORA. This represents
25% of the agency’s total request and includes a $32.4 million (6%) increase over the
ORA FY2008 budget.
4 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.)
5 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.
6 See “FDA Key Initiatives” at [http://www.fda.gov/oc/initiatives/advance/].
7 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,
submitted at the request of Representatives Dingell, Waxman, Stupak, and Pallone, at
[http://energycommerce.house.gov/Press_110/022508.ScienceBoardReport.Estimated
Resources.pdf]; Congress is considering a supplemental FDA appropriation for FY2008, which
reflects a Professional Judgement Budget prepared by Commissioner von Eschenbach, at
[http://www.fdanews.com/ext/files/Drug_Industry_Daily/vonEschenbachSpector.pdf].

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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 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.
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 budget request for the Foods Program is $543 million, a $33 million
increase (6.4%) over FY2008, all from budget authority. Nearly two-thirds of the Foods
Program budget 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
8 The requirement is at 521 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.
10 The plan is at [http://www.fda.gov/oc/initiatives/advance/food/plan.html].

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(CDER). It is funded through both budget authority and user fees authorized by the
Prescription Drug User Fee Act (PDUFA).11
The FY2009 budget request for the Human Drugs Program is $739 million ($358
million in budget authority and $381 million in user fees), a $58 million (8.6%) increase
over FY2008. Almost all of the proposed increase would come from currently authorized
or proposed new user fees, rather than from budget authority. 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
($15 million). 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
The FY2009 budget request for the Biologics Program is $245 million ($158 million
in budget authority and $87 million in user fees), a $9.5 million (4%) 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). 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. 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
11 See CRS Report RL33914, The Prescription Drug User Fee Act (PDUFA): Background and
Issues for PDUFA IV Reauthorization
, by Susan Thaul.
12 See CRS Report RL33914, as above, and CRS Report RL33981, Medical Device User Fee and
Modernization Act (MDUFMA) Reauthorization
, by Erin D. Williams.
13 For more information, 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.

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safety of the food supply, largely through its activities to ensure the safety of drugs and
feeds used for food-producing animals. The program is funded through both budget
authority and user fees authorized by the Animal Drug User Fee Act (ADUFA).15
The FY2009 budget request for the Animal Drugs and Feeds Program is $119
million, a $10.8 million (9.9%) increase over FY2008. The total requested amount
consists of almost $104 million in budget authority, almost $12 million in authority for
the animal drug user fee program, and $4 million for a proposed generic animal drug user
fee program.16 About half of the requested increase would be used to support the
Protecting America’s Food Supply Initiative, including the development of processing and
ingredient standards for animal foods as required by FDAAA,17 and expansion of existing
activities. Most of the rest of the requested increase would be for the user fee programs.
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 budget request for the Devices and Radiological Health Program is
$291 million ($242 million in budget authority and $49 million in user fees), a $7.1
million (2.5%) 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. 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 devices.
15 See CRS Report RL34459, Reauthorization of the Animal Drug User Fee Act (ADUFA), by
Sarah A. Lister.
16 Authority for the current animal drug user fee program sunsets at the beginning of FY2009.
Unless it is reauthorized, this authority would not be current for the purposes of FY2009
appropriations. The requested user fee program for generic animal drugs would require new
authority.
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.

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Table 1. Food and Drug Administration
(dollars in millions)
FY2007
FY2008
FY2009
% Change
Program area
Funds
Actual
Enacted
Requesta
FY08 to FY09
Foods
BA
457
510
543
6.4%
(no user fees)
Total
457
510
543
6.4%
Human drugs
BA
315
353
358
1.3%
Fees
228
327
381
16.4%
Total
544
680
739
8.6%
Biologics
BA
146
155
158
1.9%
Fees
56
81
87
8.2%
Total
202
236
245
4.0%
Animal drugs and feeds
BA
95
97
104
6.7%
Fees
11
12
16
37.0%
Total
106
109
119
9.9%
Devices and radiological health
BA
231
238
242
1.6%
Fees
37
46
49
7.1%
Total
268
284
291
2.5%
Toxicological research
BA
42
44
46
4.1%
(no user fees)
Total
42
44
46
4.1%
Headquarters and Office of the
BA
92
97
99
2.0%
Commissioner
Fees
20
36
40
10.8%
Total
111
133
139
4.3%
GSA rent
BA
127
131
131
0.0%
Fees
12
29
25
-11.4%
Total
139
159
156
-2.0%
Other rent and rent-related
BA
68
89
89
0.0%
(including White Oak
Fees
18
10
20
92.9%
consolidation)
Total
86
99
109
9.8%
Export and color certification funds
Fees
10
10
10
8.4%
(user fees only)
Total
10
10
10
8.4%
Subtotal, Salaries & Expenses
BA
1,572
1,714
1,769
3.2%
Fees
391
549
628
14.4%
Total
1,964
2,264
2,397
5.9%
Buildings & Facilities
BA
10
6
2
-60.5%
(no user fees)
Total
10
6
2
-60.5%
Total, FDA Budget Authority
BA
1,583
1,720
1,771
2.9%
Total, FDA User Fees
Fees
391
549
628
14.4%
TOTAL, FDA Program Level
Total
1,974
2,270
2,400
5.7%
Source: Adapted by CRS from the FDA, Fiscal Year 2009 Justification of Estimates for Appropriations
Committees
, February 2008, at [http://www.fda.gov/oc/oms/ofm/budget/documentation.htm].
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 authorized
direct-to-consumer television advertisement advisory review ($14.0 million), proposed generic drug
user fees ($16.6 million), and proposed animal generic drug user fees ($4.8 million).