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Testimony on Food and Drug Administration's FY 1998 Budget by Michael A. Friedman, M.D.
Deputy Commissioner for Operations Food and Drug Administration
U.S. Department of Health and Human Services

Before the House Committee on Appropriations, Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies
February 27, 1997

Mr. Chairman, members of the Committee, I appreciate the opportunity to appear before you and present the 1998 Food and Drug Administration budget proposal.

As a background for our 1998 budget request, I would like to begin with a description of the FDA's Congressional mandates and the expectations of the American public, and how we are accomplishing our mission.

FDA's Core Missions

The American people have come to expect and rely on the FDA for many services that contribute to their sense of security and enable them to lead productive lives -- protection of the safety and wholesomeness of our food supply, maintenance of the high standards of effectiveness and safety of our drugs and medical devices, and assurance of the safety of our blood supply and vaccines, as well as cosmetics. We are committed to upholding those standards and meeting those expectations.

The promotion and protection of the public health is our core function. FDA's responsibilities cover more than $1 trillion worth of products, many of which are vital for human health. Our diverse activities include -- but are not limited to -- licensing blood banks; monitoring clinical investigations; and reviewing and approving prescription drugs, generic drugs, animal drugs, vaccines, biologicals, medical devices, devices that emit X-rays and food additives.

Our mission, as the nation's oldest consumer protection agency, is to provide the basic public health protection for the foods we eat and the drugs we take. The assurance that FDA is there, everyday, doing its job, is so fundamental to what we know and expect as public health protection, that we almost take it for granted. Americans have the luxury of not needing to worry about thousands of products including breakfast cereal, pain relievers, contact lenses, vaccines, and cough medicine.

When we inspect manufacturing establishments to make sure they use the materials and processes necessary to produce safe and effective products, and when we monitor imported products to make certain they meet the same high standards as domestic products, we succeed at FDA's primary job -- helping sustain the American public's confidence and peace of mind.

We have been protecting consumers against an ever-growing number of public health risks for more than nine decades, but we have not done it by standing still. As significant advances are steadily made in science and technology, FDA is constantly being presented with complex new questions, for which we are committed to seeking and finding new answers. We are also committed to improving the FDA's many operations so that all of its work is done as efficiently and effectively as possible.

In this testimony, I would like to summarize some of our recent achievements and actions that have enabled us to protect and promote the public health more effectively than ever before.

Drug Approvals

Recently, no area of FDA's responsibility has been more closely scrutinized by Congress, industry, health professionals and the public than the approval process for new drugs -- or, more specifically, the speed with which new therapies of proven effectiveness and safety are made available to those who need them.

Let me therefore begin this report by citing our most important results last year under the Prescription Drug User Fee Act of 1992. As you know, PDUFA has given us additional resources in exchange for our commitment to meet demanding review goals without sacrificing high public health standards. This important five-year authorization will expire later this year.

After more than four years' experience with the program there is no doubt in my mind that the PDUFA approach works. The Agency has consistently succeeded in meeting its annual performance goals -- in fact, it has exceeded them in almost every goal category. When combined with our internal management initiatives, the additional resources provided by PDUFA bring important products to patients more quickly, and without sacrificing quality.

Last year's record of drug approvals by the Center for Drug Evaluation and Research (CDER) illustrates why reauthorization of PDUFA is a top priority for FDA.

All drugs approved by FDA are important, but none are as meaningful in bringing new hope to patients as new molecular entities (NMEs). These are products that include active ingredients never before marketed in this country. The number of NMEs approved each year is regarded as a reliable indication of real and meaningful medical progress. Last year, that progress was exceptional: FDA approved 53 NMEs submitted by the pharmaceutical industry, nearly twice as many as the year before.

Let me put last year's figures into perspective by referring back to the passage of the Kefauver-Harris amendments in 1962. The average annual total of NMEs in that decade was 13.7. In the 1970s, the corresponding figure went up to 17.3. In the 1980s, the average was 21.7 NMEs, and in the first half of this decade, the average was 25.6 NMEs. That's less than one-half of the 53 NME approvals last year.

Last year's approvals also were much faster than in the past. In the late 1980s, median times to NME approval approached 30 months. The median time to approval for the 53 drugs approved in calendar year 1996 was 14.3 months, less than half the time it took as recently as the late 1980s. [Chart 1]

New cancer drugs approved last year were notable for their effectiveness against a broad spectrum of cancers: Hycamtin is used for the treatment of metastatic carcinoma of the ovary; Camptosar for colorectal cancer; Taxotere for advanced breast cancer; Gemzar for cancer of the pancreas; and Nilutamide for cancer of the prostate.

The NME category included also Accolate, the first of a new class of drugs for asthma; Aricept, the second treatment for Alzheimer's disease; and Copaxone, a treatment of relapsing-remitting multiple sclerosis.

Nine of the NMEs approved last year, including two drugs for cancer and three for HIV, were approved in six months or less. Crixivan, a protease inhibitor for the treatment of HIV, was approved in just 1.4 months. Twelve of the NMEs, including three protease inhibitors, were developed -- from the first commercial Investigational New Drug submission to marketing approval -- in less than six years.

Moreover, the total number of new drugs and biological products -- including NMEs -- approved in the last calendar year was 139, which is 63 percent more than the total the year before. [Charts 2-3] New Drug Applications (NDAs) accounted for 131 of these products, and their median time to approval was 15.4 months, 7 percent faster than the 16.5 months the year before.

Biologics and Blood Safety

Our Center for Biologics Evaluation and Research (CBER) last year made several important contributions to the safety of the blood supply, two of which were new test kits for the detection of HIV infection. One of these kits is designed for screening of donated blood for HIV-1 antigen, a substance that in most cases is detected before the virus antibodies. By reducing the so-called "window" period, when donors may be HIV-infected but their tests are still negative for HIV antibodies, the antigen screening could prevent an estimated 5-10 transfusions of HIV-infected blood a year.

The other HIV test kit approved last year was the first system that includes collection of blood samples at home. It was developed to facilitate blood testing by the more than 60 percent of Americans who are at risk of HIV, but do not visit a medical facility to have their health status checked. In addition, FDA also approved the Amplicore HIV-1 monitor test, the first test approved for the quantification of the HIV-1 virus in human blood.

In all, CBER last year completed 17 major biological approvals, as compared with 12 such approvals the year before. Last year's major biological approvals included Raspigam, the first medication to protect infants against respiratory syncytial virus, a potentially fatal disease; Avonex, the second interferon product for multiple sclerosis; and Verluma, a new diagnostic imaging agent that can determine the extent of small cell cancer in different parts of the body at one time. The median approval time for the 17 biological products was 14.9 months, 15 percent faster than in 1995. The public health has also been well served by the approval of the acellular pertussis vaccine, which is safer than the traditional whole-cell pertussis vaccines. Another notable approval, issued earlier this month, was for a new recombinant Factor IX for treating people with Factor IX deficiencies. This product does not make any use of plasma derived proteins, and therefore presents no risk of transmitting viral infection.

Comparison with Foreign Regulatory Bodies

There are many other ways to measure our performance in drug review. One of them -- which is frequently used by the media and some critics of our Agency -- is comparing our performance with that of our counterparts abroad.

We have checked this performance gauge before, and last year we took another look, this time by comparing all new drugs that were approved last year by both the FDA and the new centralized drug approval process of the European Union.There were 15 of such drugs, and their median time for FDA review and marketing approval was 5.8 months. The median time for review by the Committee for Proprietary Medicinal Products and final EU authorization for a company to sell those 15 common drugs in Europe was 12.2 months. In four instances, the EU authorization came first -- in one case, just three days ahead of FDA. In 11 instances, the drugs were first approved in the U.S.

These results are another illustration of FDA's contribution to the quality of life of our consumers. Nonetheless, we do not compete with any foreign regulatory authority, but rather with time itself. Our goal is to continue to challenge ourselves to constantly improve our own performance.

Not all of our improvements, however, have been due to resources added by PDUFA. There has been a concerted effort to streamline and optimize our entire management system, and a substantial reorganization of parts of the Agency has been taking place in the last few years. As a result, all FDA Centers last year achieved notable results.

Medical Devices

As a striking example, the Center for Devices and Radiological Health (CDRH) improved its premarket approval reviews (PMAs) while maintaining the review times for abbreviated application -- 510(k)s. The latter category of applications -- which accounts for the vast majority of all submissions to CDRH -- covers devices that are substantially equivalent to devices already on the market. In fiscal year 1996, CDRH approved 43 PMAs, a six year high, and 24 major new products, an all-time high. [Chart 4]

One of the notable products approved in 1996 was the Thoratec Ventricular Assist Device System that serves as a bridge to cardiac transplantation. The Center also approved many first-of-a-kind products such as the Ultramark 9 High Definition Ultrasound System, an aid in differentiating benign from malignant breast lesions; the Seprafilm Bioresorbable Membrane, used for reduction of postsurgical adhesion; and the Reliance Urinary Control Insert, a device intended for the management of stress urinary incontinence in adult women. [Chart 5]

Eight of the 15 PMAs submitted to the agency in the first half of fiscal year 1996, received a first action within the 180-day deadline. This was a significantly better performance than in 1994 or 1995.

Even though we are approving more PMAs for increasingly complex devices, and we have improved the time to first action, the PMA approval time is coming down only slowly. It takes too long -- more than two years -- to get a device through the process. CDRH and the agency are focusing now on bringing down the PMA review times, just as we have done for NDAs. But much depends on the level of resources available to do the work.

CDRH has also successfully managed the review times for 510(k) applications. In fiscal year 1996, the median review time for these devices that received a finding of substantial equivalence was 85 days. The reviews were almost 70 percent longer -- 144 days -- at their peak in 1993. Even accounting for applications that had to be returned to the manufacturer for more information, the average 510(k) review time in fiscal year 1996 was 110 days, down from the peak of 184 days in fiscal year 1994. Overall, CDRH has done a remarkable job in solving review problems that had plagued the Center for years. They have significantly shortened review times without sacrificing the increased scientific and medical rigor of the reviews. We are not satisfied with our performance, but we are steadily moving in the right direction. [Chart 6]

We also take real satisfaction in the high standards for mammography facilities achieved under the Mammography Quality Standards Act (MQSA) of 1992. Since the law was passed CDRH, working with the American College of Radiology and the states' authorities, has set standards, certified 10,000 facilities, and inspected all of them. The first year's inspections after the program went into effect showed that 80 percent of the facilities had either none or only minor violations, and a recent report by the General Accounting Office found that second-year inspections revealed "considerable reduction in the proportion of facilities" with violations.

The performance of our drug and device Centers deserves special attention because of the public health importance of their work, and high interest in their achievements. Other FDA Centers, however, also had results last year that reflected gains in efficiency and positive effects of innovative processes.

Food and Veterinary Medicine

The Center for Food Safety and Applied Nutrition (CFSAN) has implemented several initiatives to speed up the food additive petition review process and reduce the inventory of pending petitions. The Center brought in scientists from other program areas; allocated additional resources to modernize its electronic information processing infrastructure, and to contract the technical services of "third party" reviewers; instituted changes in its Office of Premarket Approval to better respond to legislative mandate and industry demands; and used various means -- from one-on-one meetings to the World Wide Web -- to provide guidance to petitioners on how to improve the quality of their submissions to the Agency.

The effort has paid off in reduced petition inventory and faster reviews. In June, 1995, there were 295 petitions in the CFSAN inventory, including food and color additive petitions, GRAS affirmation petitions, and citizen petitions. By the end of last fiscal year, the Center had received an additional 82 petitions, but the inventory was 60 petitions below the total in June 1995. During calendar year 1996, CFSAN took final action on 88 petitions, 54 of which were approvals -- the highest number in any year in a decade. [Chart 7] Moreover, the median time from receipt to approval of food and color additive petitions decreased from 37 months for petitions approved in fiscal year 1993 to 27 months for petitions approved in the last fiscal year. Again, we have not yet achieved the results we want, but we are continuing to advance toward them.

CFSAN has also begun authorizing health claims providing information on the relationship between food components and health. Last year, FDA issued a final rule covering health claims that associate adequate dietary intake of folic acid and the reduced risk of neural tube birth defects, which in this country affect approximately 2500 children each year. And at the end of last month, the Agency authorized health claims stating that foods containing soluble fiber from whole oats may under certain circumstances reduce the risk of heart disease.

Our Center for Veterinary Medicine spent several years working closely with animal drug manufacturers, producers, and veterinarians designing a new and more flexible animal drug approval process that reduces the time and cost necessary for meeting the requirements for a new animal drug approval. [Chart 8] Full implementation of the changes was made possible by the statutory enactments of the Animal Drug Availability Act of 1996. Among other improvements, the ADAA eliminates the need for dose titration and optimization, and provides the Agency with the latitude to redefine the statutory term "substantial evidence" of drug effectiveness. The changes are evidence of the remarkable achievements that become possible when government and the private sector work together.

Achievements of the Office of Regulatory Affairs

One of the most demanding tasks of our Office of Regulatory Affairs, whose inspectors and investigators operate in offices throughout the United States and Porto Rico, is surveillance of the rapidly mounting imports of FDA-regulated products. While the number of our port-of-entry personnel has increased only modestly, the number of shipments with products within FDA purview has increased from 500,000 in 1970 to nearly 3.7 million last year.

Last year, ORA began implementing a new automated system -- called Operational and Administrative System for Import Support (OASIS) -- that greatly speeds up FDA's handling and clearance of imported products by maintaining electronic communications between the agency and the brokers. With OASIS, the broker receives FDA's initial admissibility determination on every shipment within eight minutes after the broker submits the necessary data to the agency. For eight out of ten shipments, the initial FDA clearance is final. The paperless system, whose implementation will be completed by the end of September, will cover every U.S. port of entry where FDA-regulated products arrive by sea, land and air.

Another major responsibility of ORA's regional, district and field offices and laboratories is to maintain a round-the-clock vigilance against hazards to the public health. A typical example of this demanding duty is the recent action by FDA's field office in Los Angeles against several products that were supposed to be mildly intoxicating but instead were implicated in cases of nausea, vomiting and respiratory arrest among mostly young people who had ingested them at a New Year's Eve concert.

FDA field office launched investigation within hours after the incident, and on January 1, we issued a public statement warning consumers against the so-called "fX" products -- "CHERRY fX BOMBS," "LEMON fX DROPS" and "ORANGE fX RUSH" -- which apparently had been distributed for free to the concert goers. Subsequently, FDA took possession of more than 9,000 vials with the fX potion and notified the distributor that the products present an unreasonable risk of illness or injury to those who consume them.

Mr. Chairman, I have mentioned the highlights of FDA's performance last year as evidence that our agency is dedicated to its public health mission, competently staffed, and steadily advancing in its scientific skills while introducing flexible, less burdensome but no less valid regulatory pocedures.

We have taken important strides forward, and we are well positioned to make even more effective use of day-to-day operating resources as well as to strategically plan for managing new responsibilities.

In addition to our important ongoing efforts, there are three major tasks that we perceive to be fundamental for the fulfillment of our public health mission in fiscal year 1998.

First of all, we must implement -- in cooperation with federal, state and local public health authorities -- the Administration's food safety initiative.

Food Safety Initiative

Americans rightfully expect their food to be wholesome and safe, and with rare exceptions, it is. We know, however, that problems do exist. According to the Council for Agricultural Science and Technology, up to 33 million foodborne illnesses occur each year, and as many as 9,000 people -- mostly the very young and the elderly -- die as a result.

Hospital stays associated with microbial foodborne illnesses are estimated to cost more than $3 billion a year, and the estimated total expenditures due to foodborne illnesses are at least $5.6 billion. These costs, both in lives and economic consequences, are unacceptable.

Last year's outbreak of E. coli 0157 contaminated apple juice on the West coast is a recent example of why we need to improve our system for protecting food. We were first alerted when one of our food scientists spotted on the Internet a reference to a previously unreported E. coli outbreak in the state of Washington. After a diligent inquiry he found the person associated with the Internet notice -- a University of Washington physician who had uncovered a cluster of patients with Hemolytic Uremic Syndrome, an extremely serious illness caused by E. coli in which blood cells dissolve and the kidneys suffer severe damage.

The first clue to the cause of the outbreak was provided by state and local officials in Seattle who had interviewed the patients and found that they all had consumed the same brand of apple juice. Samples of the suspected product were brought to FDA's Seattle laboratory, which began testing them for the presence of E. coli.

Commissioner Kessler was notified and he initiated a conference call beginning at 9 o'clock that night. Over the next seven hours, 46 people -- experts from FDA, CDC, state and local health authorities, and representatives of the manufacturer -- discussed the various aspects of the outbreak. After the conference was concluded, at 4 a.m., the manufacturer of the apple juice recalled all of the already distributed contaminated products, and a press release was issued warning the public against consuming the juice they had already bought. As a result of this rapid intervention, the outbreak was limited to 66 Americans and Canadians. Tragically, one of them -- a little girl in Colorado -- died of complications of this foodborne disease.

We were able to help contain the outbreak thanks to the fast reaction and cooperation from federal, state, and local public health officials as well as from the juice manufacturer, who instituted an immediate recall of the unsold products and warned the public against consuming the juice they had already bought.

But we also were fortunate. First, Kings County in Washington has a disease surveillance system similar to the CDC's sentinel site system that we are trying to improve. If the same outbreak had taken place in other areas of the country, we might not have made the connection until many more people had become ill.

Second, Federal health officials took charge of the situation rapidly and received prompt cooperation from all the relevant federal, state, local and industry participants in the incident. But this was a fairly exceptional experience. For the emergencies that take place under less favorable circumstances, we need to have effective and consistent coordination in place before the outbreak takes place.

Similarly, if we knew more precisely how this deadly form of E. coli grows and multiplies, how it infects the food and how it is transmitted to humans, we could act more quickly and decisively when events of this sort take place. Our research and assessment proposals will bring us closer to the knowledge we need to devise educational programs to teach consumers and food processors how to avoid and combat such contaminants. And we must have additional inspectors if we are to ensure that food safety standards are being met.

In recent years, we have taken several significant steps to improve food safety. We are now implementing the Hazard Analysis and Critical Control Point (HACCP) quality control system for seafood, and the U.S. Department of Agriculture is doing the same for meat and poultry. FDA and USDA have supported efforts of the Centers for Disease Control and Prevention to create a system of Sentinel Sites for identifying disease outbreaks. And Congress enacted new legislation last year aimed at protecting the public -- particularly the children -- from pesticides. But our system is still largely outmoded, and it is time to bring food safety into the contemporary world of automation and modern science.

We are therefore asking your support for new resources to carry out FDA's share in the Administration's food safety initiative which is described in detail in the budget.

Prevention of Tobacco Use by Minors

Our second major task is our public health and legal obligation to protect our most vulnerable population -- our youth -- against the devastating effects of tobacco.

For the past two-and-a-half years, our agency conducted an extensive investigation into public health aspects of the use of tobacco, which kills more than 400,000 Americans each year -- more than acquired immune deficiency syndrome, alcohol, car accidents, murders, suicides, illegal drugs, and fires combined.

We found evidence that nicotine is addictive; that it produces pharmacological effects which are the primary reason why people use tobacco; and that manufacturers know these facts.

The most striking discovery, however, was that the enormous public health burden linked with tobacco products overwhelmingly starts when the users are young, a stage of life that's most carefree and susceptible to risk-taking. Eighty-two percent of adults with any history of smoking had their first cigarette before the age of 18, and more than half of them had already become regular smokers by that age.

Each year, one million youngsters in this country become regular smokers -- and one-third of them will die prematurely of lung cancer, emphysema, and similar diseases linked to their addiction. About three million of our adolescents smoke, and another one million boys use smokeless tobacco. Tobacco use and nicotine addiction can be properly called a "pediatric disease."

Based on these findings, FDA last year determined that it has jurisdiction over cigarettes and other tobacco products, and issued regulations restricting their sale and distribution to children and adolescents.

This year, we -- together with our sister public health agencies and state and local authorities -- are embarking on an enforcement program designed to reduce young people's use of tobacco products by 50 percent in seven years. It is an enormous undertaking: despite the fact that it is against the law in all 50 states to sell cigarettes and smokeless tobacco to minors, our young people purchase an estimated 1.26 billion dollars' worth of tobacco products each year. Recent surveys have shown that adolescent smoking, after several years of decline, is again on the rise.

As a public health agency we feel a deep obligation to see this program carried out. Earlier, I mentioned our implementation of the Mammography Quality Standards Act, the most important advance in the public health protection for the nation's women. Protecting their children -- our youth -- from nicotine and tobacco is an equally urgent and deserving task whose future benefits will far outweigh the current funding needs.

PDUFA and MQSA Reauthorization

Our third important task is to achieve reauthorization of two user fee programs -- PDUFA and MQSA, both of which expire on October 1 of this year. Both of these programs set increasingly demanding performance goals and provided the additional resources necessary to accomplish the agreed-upon objectives. As I have discussed earlier, the principle of linking higher productivity to a corresponding increase in resources has been a success, and we'll be happy to continue applying it to the two existing programs.

Three Long-Range Challenges

Beyond these immediate tasks, FDA faces longer-term challenges for which we must find solutions if this country's public health is to continue to be as well protected as Americans expect and merit.

One of the most demanding problems -- as well as our greatest opportunity -- is the prodigious outpouring of new scientific knowledge that directly impacts on our responsibilities as a public health agency. Scientific information is growing far more rapidly than could be foreseen even a decade ago, and the sheer volume of new insights is nearly unimaginable.

While our agency scientists, such as those at the National Center for Toxico- logical Research, are hard at work to keep abreast of these developments, we face a constantly expanding task. At any particular moment, we have to be thoroughly competent in understanding such disparate issues as the biology of genetically altered tomatoes, the safety and effectiveness of eye surgery with a laser beam, and the effectiveness and side effects of new unique classes of highly toxic drugs. Our mission involves therapeutics, restoratives, diagnostics, nutritionals, and many other scientific disciplines whose complexity is constantly growing. We must devise additional ways of remaining on the cutting edge of this new knowledge, because to slip behind would endanger this country's public health.

Another challenge we'll have to meet is improved accessibility of meaningful health information to the public. Accurate product information is absolutely vital to patients and health care professionals. In many ways, information is the new currency. Having a new drug or a new food or a new medical device, without having the information how to use it properly or safely, is to no one's advantage. We must struggle not just to get new products on the market, but to make sure that there is information about their benefits and risks, so that the health care provider and individual can make informed decision about proper use. We've learned from our experience with the new food label and with prescription drug information leaflets that well-presented and accessible information may be the most powerful tool we have to improve the public health. With the cooperation of the industry, we are about to institute major improvements in the labeling of non-prescription drugs, but more remains to be done.

Finally, I must include one more important long-range challenge that FDA has to address in order to continue maintaining this country's traditional standards. With the globalization of manufacturing, trade, and consumption, many members of the international community -- including us -- recognize the value of harmonized regulatory standards and, possibly, shared compliance surveillance. It is our only realistic option for ensuring the standards of foreign-made regulated products, whose imports to this country have increased seven-fold in the last 25 years.

For FDA, this is an expanding mission that calls for the development of international contacts, knowhow and negotiating skills within a scientific framework. Moreover, we find that -- as one of the world's oldest consumer protection agencies -- we are expected to do our full share. To advance our country's national interests, we are doing our best to meet these expectations.

A good example of our contribution is the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH), the most important international effort in the regulatory field that seeks to harmonize submission data for drugs in the U.S., Europe and Japan. Less than five years' old, ICH is completing the adoption of more than 40 consensus guidelines, many of which are based on our standards. We also are providing leadership for similar international efforts to harmonize the standards for veterinary drugs, and for medical devices.

All of these challenges are even more formidable because we realize that our work load will continue to be greater than our resources. The prescription drug and medical device industries maintain a growth rate of more than 8 percent a year, as measured by the value of manufactured shipments. Research and development in the same industries increases by more than 12 percent each year, and imports of all FDA-regulated products are increasing at a rate greater than 7 percent a year. We are determined to bridge this gap by increasing our cooperation with others, whether in government, academia or industry; by working hard; and by finding novel solutions when old practices no longer meet the need.

Budget Outline

Turning to FDA's FY 1998 budget, the Administration's request is a total of $1,064,388,000, including $820,116,000 in budget authority and $244,272,000 in user fees. A total program level of this amount will enable us to carry out the core activities of premarket review and postmarket surveillance as well as move forward with new initiatives to protect and promote the health of the American people.

Food Safety Initiatives +$24 Million

For FDA's part of the collaborative effort with CDC, EPA, and USDA, we are requesting $24,000,000 to begin implementation of activities aimed at reducing the incidence of foodborne illnesses and resultant economic losses by enhancing the safety of the nation's food supply. Our funding would provide the elements pivotal to food safety such as seafood inspection efforts, consumer and industry education (particularly at the retail level), surveillance, including in particular the establishment of a new national early warning system for outbreaks of foodborne disease, risk assesment and research. The activities would lay a foundation of cooperation and communication to rapidly deal with emerging public health hazards.

Youth Tobacco Prevention Initiative +$34 Million

On August 23, 1996, President Clinton approved FDA's final rule that limits the availability and appeal of tobacco products to adolescents. For our part of this effort, FDA's budget request includes $34,000,000 for the costs associated with implementing this regulation. The funding will be used for outreach to retailers, manufacturers, state and local officials and communities, and enforcement and program evaluation.

Buildings and Facilities +$14.6 Million

The budget request includes $14,550,000 for the second phase of construction of the Arkansas Regional Laboratory facility for FDA's field operation in Jefferson, Arkansas. Construction of this laboratory is a cornerstone of FDA's Field Lab Consolidation Plan, and will provide state-of-the-art analytical services that are currently carried out at four laboratory facilities.

User Fees +$244.3 Million

A total of $244,272,000 is proposed in the budget for user fees. The proposal includes $91,204,000 in connection with the reauthorization of the Prescription Drug User Fee Act of 1992 and $13,966,000 in connection with the reauthorization of the Mammography Quality Standards Act of 1992, both of which sunset on October 1, 1997. The request also includes $7,459,000 in already authorized user fees for export certification and the certification of insulin and color additives.

In addition, the proposed budget includes new user fees of $131,643,000. These new fees would partially cover premarket and postmarket activities costs in most of FDA's major program areas -- foods, human drugs, biologics, animal drugs, and medical devices. These industries derive great benefits from consumers' confidence in FDA's review processes and product surveillance.

The Administration believes that FDA provides a vital public health service by protecting consumers from unsafe and impure regulated products, and that industry -- which greatly benefits from FDA's assurance of the quality of such products -- should help pay for a portion of the agency's costs. FDA will work with Congress and the agency's many constituencies, including the regulated industries, to implement the proposed fees in conjunction with agreed-upon performance measures and goals that are linked with the provided resource levels.

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