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Summary of FDA’s FY 2008 Budget

Total Budget:  For FY 2008, FDA requests a total budget of $2.1 billion.  This amount is $105.8 million more than the FY 2007 request and represents a 5.3% increase.

Budget Authority:  In terms of budget authority, the FY 2008 budget contains a net increase of $95.3 million for high priority initiatives.  This amount is a 6.2% increase.

User Fees:  Finally, FDA’s budget proposes an increase of $10.5 million for user fees.  The $10.5 million includes inflation increases required by law for six FDA user fee programs.  This amount also includes funds a new user fee program for generic drugs.  As we did in FY 2007, FDA is also proposing two new user fee programs.  These user fee programs pay the cost to reinspect facilities that FDA regulates and to recover the cost of issuing export certificates for food and animal feeds.

Specifics on FY 2007 Initiatives:  Our FY 2008 budget advances FDA’s core mission:  promoting and protecting public health.  The budget funds initiatives in priority areas:

• $21.8M to fund pay inflation for FDA’s world-class workforce
• $10.6M to strengthen food safety
• $11.2M to modernize drug safety
• $  7.2M to improve medical device safety and device application review
• $21.3M to conducting more – and more timely – generic drug reviews; this amount includes a $5.6M increase in budget authority and $15.7M in user fees
• $27.0M to establish reinspection user fees and export certificate user fees
• $42.9M to continue to relocate FDA operations to our White Oak Campus and to pay the cost of essential infrastructure to support public health programs

Strengthening Food Safety 
+$10,664,000, + 15 FTE

More than 250 different foodborne illnesses are food safety threats.  Based on CDC estimates, 76 million Americans become sick, more than 300,000 are hospitalized, and 5,000 die each year from foodborne illnesses.  Recent outbreaks highlight the need for increased resources to strengthen food safety and enhance FDA’s ability to reduce and respond to foodborne outbreaks.

If FDA does not receive funding for this initiative, FDA will make limited progress on preventing and reducing foodborne illness.  FDA will also have difficulty maintaining public confidence in the safety of fresh produce.

What activities will these funds support?

The Strengthening Food Safety Initiative funds four FDA components:  the Center for Food Safety and Applied Nutrition (CFSAN), the Office of Regulatory Affairs (ORA), the National Center for Toxicological Research (NCTR), and Office of Crisis Management (OCM).  These entities deliver FDA’s food safety and foodborne illness response.

CFSAN +$4,000,000

• better methods to rapidly detect and attribute foodborne illness outbreaks
• quicker intervention to reduce illnesses and deaths from contaminated food
• faster and more thorough traceback (tracking contamination to its source)
• training for state and local agencies on analyzing food safety data
• hiring microbiologists to improve the safety fresh produce

ORA +$5,500,000

• improve FDA’s capacity to determine the root cause of an outbreak
• equip and strategically position traceback teams in produce-growing regions
• training and equipment for state offices that respond to produce-related outbreaks
• deploy an IT decision system to detect high risk imports of FDA-regulated products           

NCTR +$500,000 & OCM +$644,000

• new methods to detect foodborne pathogens, select agents, and toxins 
• geographic information system mapping for faster emergency response

Modernizing Drug Safety
+$11,200,000, 25 FTE

The Modernizing Drug Safety Initiative will revolutionize FDA’s ability to identify drug safety issues.  With these resources, FDA can more rapidly identify and communicate drug safety concerns to professionals, patients, and the public. 

Goals of the Modernizing Drug Safety Initiative:

• FDA will strengthen the science and the tools that support drug safety at all stages of the drug life-cycle, from premarket testing through postmarket surveillance and risk management.
• FDA will improve communication and information flow among all stakeholders involved in the safe use of drugs.
• FDA will improve its operations and management to ensure that FDA has the optimum review, analysis, consultation, and communication processes to strengthen the U.S. drug safety system.

Specific activities under the Modernizing Drug Safety Initiative:

• strengthen FDA’s ability to assess the benefits and risks of drugs
• conduct a pilot to review the safety profile of new molecular entities (NMEs) on a scheduled basis
• access more databases for drug safety surveillance and analysis
• hire more specialists to evaluate drug databases
• add detection and tracking tools to FDA’s Adverse Event Reporting System
• strengthen the tools that FDA uses to communicate drug safety information
• publish a web newsletter with summaries of post-approval drug reviews
• enlist experts in organizational improvement to identify additional opportunities for change and assist FDA to carry out needed changes
• employ safety experts to identify safety data needs before and after approval

Improving Generic Drug Review Performance
Generic Drug Budget Authority:  +5,561,000; 13 FTE
Generic Drug User Fees:  +$15,701,000; 34 FTE (First Year)

Generic drug applications submitted to FDA are rising dramatically.  During the past six years, applications increased by 158 percent (307 applications in FY 2002 to 793 in FY 2006).  FDA will likely receive 857 applications in FY 2008.  The resources in this initiative allow FDA to respond to the growing number applications. 

What results will FDA achieve with these resources?
           
Budget Authority Increase:  FDA estimates that the $5.6 million increase will allow FDA to approve or tentatively approve as many as 550 generic drugs per year.  This output will produce more savings for the American public from generic drugs.

User Fees:  FDA will use the additional resources generated by the proposed Generic Drug User Fee to make determined progress on generic drug review performance. 

Today, FDA acts on 55 percent of generic drug applications within 180 days.  The number of generic drug applications that FDA receives will continue to rise, yet FDA projects that it can review 75 percent of generic drug applications within 180 days by the end of FY 2011.  By the end of FY 2014, we expect to review 90 percent of generic drug applications within 180 days.

Medical Device Safety and Review
+$7,164,000, +3 FTE

FDA will accomplish four things with these funds:

• strengthen medical device safety by improving FDA’s ability to identify, analyze, and act on medical device safety information
• use device safety information to improve the quality of new devices coming to market
• provide timely information on device safety to consumers
• meets statutory requirements, known as triggers.  If FDA does not meet the statutory triggers, FDA cannot continue to collect medical device user fees in FY 2008.

Ensure a Strong FDA
Pay: +$21,773,000; Rent: +$29,626,000

At FDA, we rely on a world-class workforce to perform our public health mission and achieve the promise of a healthier America.  We have 10,000 scientists and professionals with specialized education, training, and experience to address complex public health challenges. 

Eighty percent of the FDA budget funds payroll or costs related to personnel, such as rent, utilities, and security.  These costs are mandatory, and the amount we pay rises each year. 

What happens if FDA does not receive funds in this initiative for payroll and other fixed costs?  It limits FDA’s ability to perform its mission. 

If we do not receive these funds, FDA’s public health programs – food safety, medical product safety, and FDA review of applications for new medical products – must absorb pay, rent, and other mandatory increases.  This means that FDA must reduced the number of inspectors, medical and consumer safety officers, food safety technologists, medical product reviewers, postmarket safety experts, and other experts to meet higher payroll obligations.  These workforce reductions limit FDA’s ability to safeguard the American public.

The Ensuring a Strong FDA Initiative allows FDA to:

• ensure that food on the family table is safe and wholesome
• approve safe and effective drugs and medical products in a timely way
• ensure that medical products remain safe
• ensure that medical professionals, patients, and consumers have product information is useful and understandable.

White Oak Consolidation
+$13,256,000

During the past four years, FDA has been moving to a new campus in White Oak Maryland.  When completed, 7,700 employees located at 20 different sites across the D.C. region will work in new, state-of-the-art facilities at White Oak.  The White Oak facilities provide critical scientific capacity – scientists working in modern laboratories with access to the latest technologies and tools – to execute mission-critical work.

Including the amounts budgeted for FY 2007, the total FDA and GSA investment in White Oak to date exceeds $736 million.   We already have 20 percent of our workforce at the White Oak Campus.

The move to White Oak is essential to achieve the promise of a 21st century FDA.  Consolidating at White Oak will eliminate the fragmentation that limits FDA’s performance.  Consolidating also means cost savings and efficiencies.  It permits FDA to leverage a modern work environment to meet our public health challenges.

FY 2008 Budget:  Based on the GSA construction schedule, in 2009 FDA will move an additional 1,300 employees to the new White Oak Campus.  These employees work in the Center for Devices and Radiological Health.  To complete this move on time, FDA is requesting a budget increase of $13,256,000 to prepare buildings, equip and outfit facilities, and pay environmental compliance and relocation costs.

If we do not receive these funds, FDA suffers the same impact as not receiving the pay and infrastructure increases.  FDA’s programs for food safety, medical product safety, and FDA review of applications for new medical products – must absorb pay, rent, and other mandatory increases.  We must reduce the number of inspectors, medical and consumer safety officers, food safety technologists, medical product reviewers, postmarket safety experts, and other experts to meet higher payroll obligations.  These workforce reductions limit FDA’s ability to safeguard the American public.

Table - Overview of FY 2008 Initiatives

¹ In FY 2007, PDUFA collections included a one time increase of $31,600,000 for the final year adjustment under the PDUFA III.  For FY 2008, adjustments include increases for inflation and other increases authorized by the PDUFA statute.  The decrease in FY 2008 is due to this one-time, non-recurring FY 2007 Final Year adjustment. Because FDA has not completed the public comment period regarding FDA’s proposed recommendations for PDUFA reauthorization, the FY 2008 PDUFA estimate is based on straight reauthorization of PDUFA III with no programmatic enhancements or adjustments.

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