HHS FY2016 Budget in Brief
Food and Drug Administration (FDA)
The Food and Drug Administration is responsible for protecting the public health by assuring the safety, efficacy and security of human and veterinary drugs, biological products, medical devices, the nation’s food supply, cosmetics, and products that emit radiation. FDA also advances the public health by helping to speed innovations that make medicines more effective, safer, and more affordable, and by helping the public get the accurate, science based information they need to use medicines and foods to maintain and improve their health. Further, FDA regulates the manufacture, marketing, and distribution of tobacco products to protect the public health and to reduce tobacco use by minors. Finally, FDA plays a significant role in the nation’s counterterrorism capability by ensuring the security of the food supply and by fostering development of medical products to respond to deliberate and naturally emerging public health threats.
FDA Budget Overview
(Dollars in millions)
|FDA Programs||2014 /1||2015 /2||2016||2016
|Animal Drugs and Feeds||173||175||197||+22|
|National Center for Toxicological Research||62||63||59||-4|
|Headquarters and Office of the Commissioner /3||275||277||300||+22|
|White Oak Consolidation||62||47||52||+5|
|GSA Rental Payment||220||228||242||+14|
|Other Rent and Rent Related Activities||116||116||137||+20|
|Subtotal, Salaries and Expenses||4,366||4,476||4,895||+420|
|Export Certification Fund||5||5||9||+4|
|Color Certification Fund||7||8||9||+0.8|
|Priority Review Vouchers||--||8||8||--|
|Buildings and Facilities||9||9||9||--|
|Total, Program Level||4,387||4,505||4,930||+425|
|Current Law User Fees /4 /5||2014||2015||2016||2016
|Prescription Drug (PDUFA)||760||798||826||+28|
|Medical Device (MDUFA)||115||128||134||+6|
|Animal Drug (ADUFA)||24||22||22||+0.3|
|Animal Generic Drug (AGDUFA)||7||7||7||-0.5|
|Family Smoking Prevention and Tobacco Control Act||534||566||599||+33|
|Generic Drug (GDUFA)||306||312||320||+8|
|Mammography Quality Standards Act (MQSA)||19||20||20||+0.4|
|Export Certification Fund||5||5||5||--|
|Color Certification Fund||7||8||9||+0.8|
|Third Party Auditor Fee||--||--||1.4||+1.4|
|Voluntary Qualified Importer Program||--||5||5||--|
|Outsourcing Facility Fee||--||1||1||--|
|Priority Review Vouchers||--||8||8||+8|
|Subtotal, Current Law User Fees||1,826||1,909||1,988||+79|
|Proposed Law User Fees||2014||2015||2016||2016
|Export Certification /6||--||--||4||+4|
|Food Facility Registration and Inspection||--||--||60||+60|
|Food Substance Contact Notification||--||--||5||+5|
|Subtotal, Proposed Law User Fees||--||--||199||+199|
|Less Total, User Fee||1,826||1,909||2,187||+277|
|Total, Discretionary Budget Authority||2,561||2,596||2,744||+148|
1/ In addition to these resources, section 747 of the Consolidated Appropriations Act, 2014 makes approximately $79 million in user fees sequestered in FY 2013 available for obligation in FY 2014.
2/ The FY 2015 Appropriations also provided $25 million in one-time emergency resources to support Ebola response and preparedness activities.
3/ The FY 2015 Appropriations directed FDA to transfer a total of $1.5 million to the HHS Office of Inspector General for oversight activities.
4/ The Drug Quality and Security Act (P.L. 113-54) authorized three new FDA user fees: the outsourcing facility fees; the prescription drug wholesale distributer licensing and inspection fees; and, the third-party logistics provider licensing and inspection fees. It is expected that collections for wholesale distributer and third-party logistics provider fees in FY 2015 and FY 2016 will be minimal.
5/ The FY 2015 authorized user fee resources do not reflect the Federal Register notices published in July and August 2014.
6/ The FY 2016 President’s Budget proposes to increase the statutory user fee limit for this program.
2016 +/- 2015: +822
Transforming the Food Safety System in a Global Market
FDA estimates that 18 percent of all food products are imported into the United States. The proportion of specific products is even more striking – an estimated 80 percent of seafood and between 20 and 50 percent of produce is imported from other countries. The growing proportion of imported products emphasizes a need to focus activities and resources to address the evolving global food supply system.
The Food Safety Modernization Act directed FDA to establish a program to accredit entities to conduct food safety audits and to issue certifications for foreign food facilities to ensure compliance with U.S. safety standards. This program will optimize federal resources by allowing FDA to leverage third‑party auditors to enhance the assurance of the safety of imported food and animal feed products and will facilitate the efficient movement of regulated products in international trade. In FY 2016, FDA will begin collecting user fees in support of this program. The final regulation is scheduled to be finalized in 2015.
This program complements other global food safety efforts proposed in the Budget such as the foreign supplier verification program. This program, also required by FSMA, would ensure that foreign suppliers establish programs to ensure that foreign importers verify that products meet certain standards and are not adulterated. The FY 2016 Budget supports implementation of these programs to complement other foreign food safety activities.
The FY 2016 Budget includes $4.9 billion in total resources for the Food and Drug Administration (FDA), an increase of $425 million, or 9 percent, above FY 2015. Of this increase, $148 million is in budget authority and $277 million in user fees to support FY 2016 activities that advance FDA’s mission and address emerging and salient public health challenges. In FY 2016, FDA will continue to modernize the food safety system, enhance the safety and quality of human drugs and other medical products, continue to reduce tobacco use, support preparedness with medical countermeasures, address globalization, and conduct innovative research to support mission critical programs.
Modernizing the Food Safety System
Foodborne illness and contamination outbreaks have a significant public health and economic impact. An estimated 48 million foodborne illnesses occur each year, which cost over $75 billion per year in total lost productivity, illness-related mortality, and medical costs. FDA oversees the safety of approximately 80 percent of the food supply which includes a growing proportion of imported products. Since the enactment of the Food Safety Modernization Act (FSMA) in 2011, FDA has made great strides to fulfill the Administration’s goal to have a more coordinated, robust, and prevention-based system. FDA has worked with federal, state, local, and foreign partners to transform the food safety system from one that is reactive to one that is poised to prevent unintentional and intentional foodborne outbreaks and focuses on the highest risk circumstances. In 2015 and 2016, FDA will publish final versions of seven substantial regulations required by FSMA that will establish the framework for a preventive and integrated approach to ensuring the safety of the nation’s food supply.
The Budget includes $1.5 billion across FDA for food safety, an increase of $301 million above FY 2015. This total includes $1.3 billion in budget authority and $206 million in user fees. In FY 2016 FDA will focus on the seven regulations which set preventive controls for food and feed; standards for the sanitary transport of food; produce standards for packing, harvesting, and growing fruits and vegetables; standards for imported foods equivalent to standards of safety in the United States; standards for animal food; and, steps to block intentional attempts of contamination. These activities will improve the public health by lowering the incidence of illness due to food hazards and will avoid interruptions to the food supply. In FY 2016 FDA will focus on the following objectives in support of FSMA implementation:
- Implement new food and feed standards;
- Modernize inspections and enhance training to ensure consistency;
- Support an integrated prevention-focused food and feed system;
- Enhance risk-based analytic tools to prioritize activities and optimize resources;
- Improve import oversight through Foreign Supplier Verification Program implementation
- Improve import safety including streamlining port‑of-entry activities; and,
- Increase foreign presence and partnerships.
To support these critical activities in FY 2016, the Budget includes $190 million from new proposed user fees including the food import fee and the food facility registration and inspection fee. These proposed additional revenues are essential to support key implementation actions envisioned by FSMA. The FDA Budget also includes $5 million for a food contact notification user fee to reduce microbial food contamination through premarket notification. The Budget also includes currently authorized fees such as the voluntary qualified importer program, export certification, and the food re-inspection and recall fees to support agency-wide food safety activities. In addition, FDA expects to collect resources in support of the Third Party Auditor program authorized in FSMA. These fee revenues enable FDA to expedite processes such as the timely assessment of color additives used in foods, drugs, and cosmetics, and the approval of certifications to facilitate international trade.
In addition to implementing FSMA, FDA will continue to support a broad range of food and feed safety activities that are important to the public, such as ensuring Americans have the information they need to make the best nutritional decisions. In 2015, FDA issued a final regulation requiring the display of nutritional information on the menus of certain food establishments and vending machines. FDA will provide guidance to the food industry to facilitate implementation and compliance.
Enhancing Medical Product Safety
An estimated 40 percent of finished drugs and 80 percent of active ingredients are imported into the United States from other countries. In a growing global market with increasing technical complexities, FDA continues to lead in the review of medical products. Three quarters of all significant pharmaceutical advances that were approved anywhere in the world in 2013 were approved first by FDA. FDA ensures the safety, quality and effectiveness of a broad scope of medical products used by Americans, including biologics, vaccines, blood products, and gene therapies, prescription and over-the-counter drugs, radiation emitting products, and medical devices such as pacemakers. In addition, FDA helps accelerate the availability of medical products including lower cost generic products, and eliminating drug shortages.
The FY 2016 Budget includes a total Program Level of $2.7 billion, $85 million above FY 2015, across the agency to advance FDA’s highest priority medical product activities. Of the total, $1.3 billion is in budget authority and $1.4 billion is in user fees to support domestic and foreign inspections, product surveillance, product reviews, and applied research within the biologics, human drugs, and device programs. This effort will include ensuring that products regulated by FDA are marketed consistent with the newest requirements and standards and that the American public has access to the safest products available based on recent clinical data.
The Budget includes resources for emerging and ongoing public health issues and for investing in establishing a safer drug supply system. A total of $18 million, an increase of $1 million above FY 2015, is included to continue expanded and improved oversight of human drug compounding. The compounding process allows for the customizing of drugs to address a patient’s specific needs.
This funding will build on FY 2015 activities to continue support for a more comprehensive program to ensure compounded products are safe. Specifically, FDA will support inspection and enforcement activities to ensure compliance with new requirements in the Drug Quality and Security Act; develop additional regulations and provide guidance to enhance oversight; increase and strengthen coordination with states, and to train state inspectors.
The Budget also invests $5 million to establish two key requirements of the FDA Safety and Innovation Act and the Drug Quality and Security Act. In FY 2016, FDA will enhance existing systems so that the agency can receive electronic biological product application submissions. FDA will also establish the technology infrastructure needed to support the unique facility identifier activities in the Act. This infrastructure will enhance the accuracy and coordination of FDA data to support analysis of the highest risk products, combat counterfeiting, and improve regulatory oversight. FDA is also working on long‑term implementation of the track and trace provisions in the Drug Quality and Security Act. All of these investments will enhance the overall medical product supply.
FDA will also invest an additional $15 million for new antimicrobial resistance activities in support of the Administration’s National Strategy on Combating Antimicrobial Resistant Bacteria. This effort will build on FDA’s current work, and will support the following program areas:
Preventing Shortages of Life-Saving Medications
Interruptions in the drug supply are a significant public health threat with potentially severe consequences including death. In recognition of this challenge, the President issued an Executive Order in 2011 that provided FDA with additional tools to respond to shortages. The FDA Safety and Innovation Act greatly enhanced FDA’s ability to take action by making previously voluntary actions – such as notifying FDA of potential disruptions or delays in drug manufacturing – into mandatory requirements.
In July 2012, the President signed into law the Food and Drug Administration Safety and Innovation Act, which directed the FDA to develop and submit to Congress a plan to enhance FDA’s response to preventing and mitigating drug shortages. In October 2013, FDA issued the “Strategic Plan for Preventing and Mitigating Drug Shortages” that outlines FDA’s strategy for collaborating with industry, health professionals, and patients in order to improve its response to early notifications of a potential shortage. The plan also includes long-term tactics to address the underlying causes of shortages by highlighting opportunities for drug manufacturers to promote and sustain quality manufacturing. In FY 2013, FDA prevented 170 drug shortages. Preventing drug shortages remains a top priority for FDA.
- Develop additional guidance for industry to measure the impact of recent regulatory action;
- Streamline clinical trial protocols;
- Develop new research models for high priority pathogens; and,
- Enhance availability of new data.
Finally, the Budget includes $10 million to support a new FY 2016 Department cross-cutting Precision Medicine Initiative that will allow treatments to be personalized for patient needs. FDA will establish the appropriate regulatory pathway to integrate genetic information into device development.
Advancing Medical Countermeasures
FDA supports the Department’s overall preparedness and response goals and strategies for protecting the nation from chemical, biological, radiological, nuclear, and emerging infectious disease threats by facilitating development and availability of medical countermeasures – including drugs, vaccines, and diagnostic threats. The FY 2016 Budget continues to support FDA’s work in this important area and specifically includes $25 million to continue the Medical Countermeasures Initiative. This program enables FDA to accelerate the development and availability of countermeasures by establishing clear regulatory pathways for medical countermeasures, advancing regulatory science to create the data necessary to support regulatory decision-making, and establishing effective regulatory policies and mechanisms to facilitate timely access to available medical countermeasures. FDA’s Countermeasure Initiative has been integral to the agency’s response to the Ebola virus epidemic in West Africa by helping to expedite the development and availability of investigational treatments, vaccines, and diagnostics for Ebola. FDA to provided scientific and regulatory advice to commercial developers and to U.S. government agencies that support medical product development to accelerate development programs, expedited the regulatory review of data as it was received from product developers, quickly responded to requests for access to investigational medical products for patients with Ebola, and authorized the use of investigational diagnostic tests for Ebola under FDA's Emergency Use Authorization authority.
Reducing the Use and Harms of Tobacco
An estimated 42 million individuals, approximately 1 in 5 adults, in the United States currently smoke cigarettes. Tobacco remains the leading preventable cause of disease, disability, and death in the United States. The Family Smoking Prevention and Tobacco Control Act gave FDA the authority to regulate the manufacturing, distribution, and marketing of tobacco products. Almost six years after enactment, FDA, through the Center for Tobacco Products, has made progress to establish regulatory oversight of covered tobacco products and to support other broader public health initiatives impacted by tobacco use. The Center for Tobacco Products supports the goals of the Tobacco Control Act through three strategic priorities:
- Prevent initiation, particularly among youth;
- Decrease the harms of tobacco product use; and
- Encourage cessation among tobacco users.
Developing the Evidence Base to Address Tobacco Use among Youth
FDA estimates that nearly 9 out of 10 adults that smoke daily began smoking by the age of 18, the minimum age to purchase tobacco products. Each day more than 3,200 youth under the age of 18 smoke their first cigarettes. In addition, addicted smokers will on average die 13 years earlier than their non-smoker counterparts. These statistics demonstrate the sobering facts on tobacco use and emphasize the need to focus on reducing and limiting initiation of tobacco use among young people. In addition to FDA’s broader tobacco program, FDA has supported targeted activities to increase the evidence base on youth and tobacco. FDA and CDC support the only nationally representative survey of middle and high school students which is conducted annually and has provided key findings to focus FDA regulatory actions. FDA is also evaluating its “The Real Cost” media campaign launched in 2013 to prevent tobacco use within at risk youth populations. These types of activities help formulate the scientific basis that FDA uses to identify strategies and develop future regulatory action to protect the public health.
Over the course of nearly six years FDA has had numerous accomplishments to prevent tobacco use in youth; educate Americans on the harms of tobacco products; ensure compliance of the Tobacco Control Act; review new tobacco products and changes to existing products to reduce harm; and, support cutting edge research. As of January 2015, FDA conducted over 283,000 inspections of tobacco product retailers across the United States to ensure that industry is meeting new requirements. FDA publishes guidance to the tobacco industry to increase awareness of their new obligations and of FDA’s responsibilities. Another notable accomplishment of the Center for Tobacco Products is its research. In collaboration with NIH, FDA established and supports fourteen Tobacco Centers of Regulatory Science, which help inform and allow access to FDA’s regulatory activities in the rapidly evolving tobacco market. The Centers will provide evidence in seven research areas: diversity of tobacco products; reducing addiction; reducing toxicity and carcinogenicity; adverse health consequences; communications; marketing of tobacco products; and, economics and policies.
The FY 2016 Budget includes $564 million in user fees to support the FDA tobacco program in three priority program areas. In FY 2016, FDA will advance the Tobacco Control Act responsibilities which contribute to the Department’s crosscutting efforts to reduce tobacco use in the United States. FDA will focus resources on five program areas: 1) product standards to protect public health; 2) an integrated nicotine regulatory policy; 3) pre and post market product reviews; 4) compliance and enforcement through inspections, investigations, monitoring, and review of covered tobacco products; and, 5) public education efforts particularly among at risk populations.
In addition, FDA is proposing to expand its authority to additional tobacco products. This expansion will enable FDA to apply age restrictions and rigorous scientific review to more products in an effort to reduce tobacco-related disease and death. In FY 2016, FDA will implement the final version of this regulation.
FDA Infrastructure and Facilities
The FY 2016 Budget funds high priority infrastructure activities that directly support FDA’s mission critical work. FDA’s work force has more than doubled since 2008. During this time, five new substantial authorities have been enacted, significantly expanding FDA’s responsibilities, and, as a result, the workforce to carry out these activities. The Budget ensures that FDA facilities support growing responsibilities and accounts for higher infrastructure costs without reducing programmatic resources. The Budget includes a total of $439 million, $38 million above FY 2015, to support these activities. Since FY 2014, more than 2,000 federal staff have transitioned to the White Oak, Maryland Campus that houses the state-of-the-art Life Sciences Biodefense Complex. The Budget includes resources for FDA to work with partners to identify future needs within the White Oak campus as the workforce continues to grow.
In addition, the Budget provides $9 million, the same as FY 2015, to fund repair and maintenance of FDA-owned facilities. Resources will support repairs within the Jefferson Laboratories Complex in Arkansas, which houses activities conducted by the National Center for Toxicological Research, and infrastructure support for FDA field facilities supporting inspections and compliance activities.
The FDA budget totals assume resources from five new proposed user fees across FDA, an increase to one currently authorized fee, and scheduled increases in all currently authorized user fees. Over the last five years alone, at least seven new user fees have been authorized to support medical product and food safety activities within FDA. User fees have been and continue to be a vital component that enable FDA to carry out its mission by providing predictable resources and instituting ambitious performance metrics that have led to a streamlined regulatory process, more efficiencies, and increased speed at which products are available to the public.
The Budget includes the proposed fees described in the narratives above as well as two additional proposed user fees for FY 2016. This request includes the proposed cosmetic user fee totaling $20 million to support FDA’s role in ensuring the safety of cosmetic products in the United States as the volume of both domestic and imported cosmetic products continues to grow and manufacturing technology and ingredients become more complex. In addition, the international courier user fee, which would provide $6 million to support the activities related to the increased volume of FDA-regulated commodities, predominantly medical products, imported through express courier hubs.
The Budget proposes to increase allowable fee amounts for the export certification fee to keep up with the growing costs of these certification activities. FDA is also currently establishing additional fees authorized in the Drug Quality and Security Act to support drug safety work, and continues to work toward meeting performance goals and commitments associated with all currently authorized user fees.