Food, Supplement Programs On Front Burner In FDA Budget Request

FDA asks for no direct appropriation increase for its drug programs, but again proposes additional user fees. The Obama administration's final budget proposal faces as much or more opposition than in any other session of a Republican-majority Congress during President Obama's two terms.

The narrative framing FDA's fiscal 2017 budget request emphasizes food safety as the agency asks to increase user fees for food and dietary supplement programs from just over $11m to more than $180m, partly by creating new fees, while boosting direct spending by around $25m.

The FDA request, part of the fiscal 2017 budget proposals for federal agencies the White House submitted to Congress on Feb. 9, asks for $13m more in user fees for its drug programs but no direct appropriation increase (see table below).

The agency's total funding request for the 12-month period of October 2016 through September 2017 is $5.1bn, an 8% percent increase over the enacted fiscal 2016 budget. The request is for a net increase of $14.6m in direct appropriation and $268.7m in user fees, notably with $170.9m coming from user fees linked to Food Safety Modernization Act regulations.

Total funding requested for food programs, including dietary supplement manufacturing and marketing oversight, is $1.2bn, with $1.01bn in budget authority, or direct appropriation, and $182.5m from user fees, up from $11.6m for fiscal 2016. The Center for Food Safety and Applied Nutrition would receive $356m of the total and the Office of Regulatory Affairs' food- and dietary supplement-related programs would receive $839.1m.

Final Obama Budget

The Obama administration's final budget proposal faces as much or more opposition than its proposals in any other session of Congress with a Republican majority in either or both chambers. Still, the reception from Republicans was notably cold as the Senate and House budget committee chairmen declined to invite the Office of Management & Budget director to testify about the request, a traditional part of the process.

Acting FDA Commissioner Stephen Ostroff repeatedly noted food safety enforcement in his statement that opens the agency's document provided as justification for its budget request. When listing examples of efforts from across the agency, Ostroff mentioned FSMA programs first, such as finalizing five rules established by the 2010 legislation over the past year.

Additionally, the budget request says that during fiscal 2015 FDA initiated "focused regulatory actions aimed at" dietary supplement ingredient safety. Field investigators from ORA conducted 517 US and 52 foreign inspections of supplement manufacturers and marketers to enforce good manufacturing practices, labeling requirements and other supplement regulations, leading to 78 warning letters, seven untitled letters, five regulatory meetings and five injunctions.

Chaffetz Asks For NDI Notification Guidance

FDA's work on a draft guidance for new dietary ingredient notifications, which "are vital to FDA’s knowledge of marketed dietary ingredients," also merits mention in the budget justification (Also see "A Tale Of Two Expectations: NDI Notification Estimate And Guidance" - Pink Sheet, 27 Feb, 2015.).

CFSAN, revising the draft guidance since 2012 after publishing it in 2011, received 35 NDI notifications in fiscal 2015 and objected to 65% of them "due to inadequate safety, incomplete information, or other issues," FDA says. "To address this high objection rate, FDA intends to issue a revised draft guidance to industry, describing expectations for when an NDI notification is necessary and what it should include."

The agency received a reminder about the NDI notification guidance in a recent letter from supplement industry ally and House Oversight and Government Reform Committee Chairman Jason Chaffetz, R-UT. In his Jan. 7 letter to Ostroff, Chaffetz outlined FDA's regulatory framework for the supplement industry, which he says does not give the agency "pre-market review of new dietary ingredients" nor "to treat dietary ingredients in the same manner as food additives."

"I strongly urge the FDA to issue a new draft of its NDI guidance that does not undermine the balance Congress struck in" the Dietary Supplement Health and Education Act, Chaffetz stated.

$7.2M PDUFA Fee Boost

FDA's request for Rx and OTC drug development, manufacturing and marketing oversight is $1.05bn, with $491.5m coming in a direct appropriation and $916.5m in user fees. The Center for Drug Evaluation and Research would receive $1.2bn and ORA $207.4m of the total for its drug-related programs. Prescription drug user fee program user fees, which include fees from sponsors of Rx-to-OTC switch proposals and other OTC new drug applications, are proposed to increase by $7.2m to $845.7m. (Look for additional reporting on FDA's fiscal 2017 proposed spending on drug industry oversight, including sunscreen ingredient development, in the next issue of "The Tan Sheet.")

Another component of the justification for a food program funding increase is CFSAN's recent upgrade of its supplement division to the Office of Dietary Supplement Programs, a change that should improve the programs' chances for funding boosts (Also see "FDA Supplement Office Late, Tighter Regulation Overdue – Durbin, Blumenthal" - HBW Insight, 4 Jan, 2016.).

"Elevating the program’s position from its previous designation as a division to a new, independent office will raise the profile of the dietary supplements program within the agency. The creation of this office will further enhance the effectiveness of dietary supplement regulation by allowing ODSP to better compete for government resources and capabilities to regulate this rapidly expanding industry," FDA says.

User Fees Proposed Again

In addition to requiring regulations broadly tightening FDA oversight of food products and imports, FSMA created user fee programs to help pay the agency's costs. However, other than annual registration fees for manufacturing, processing and holding facilities, FDA has kept other user fees required by FSMA on hold since the programs’ first year – fiscal 2012 – due to the absence of a guidance on requesting fee waivers.

FDA has not billed food or supplement firms for re-inspections of facilities found non-compliant with manufacturing regulations or for costs linked to a firm failing to comply with a recall order, both established by FSMA (Also see "Rates Up, Guidance Absent: FSMA Re-inspection User Fees On Hold" - Pink Sheet, 10 Aug, 2015.).

For FDA, like any fee any federal agency authorized to collect from small businesses, imposing those fees probably remains a comparatively low priority. FDA repeatedly has said that it does not have a timetable for publishing the guidance.

Nonetheless, FDA's fiscal 2017 budget request includes user fees of $6.4m for re-inspections and $1.4m for mandatory recall costs, both totals unchanged from the current budget.

Additionally, the White House again asks Congress to create new user fee programs for FDA's food and supplement market oversight and other costs (Also see "President’s Request Boosts Food Safety Budget, Proposes Separate Agency" - Pink Sheet, 3 Feb, 2015.).

The proposed fees include food service facility registration and inspection food import and food contact substance notification in addition to programs touching other areas of FDA enforcement: export certification, international courier and cosmetics.

FDA re-inspects facilities that manufacture, process, pack or hold food or supplements after problems are identified during initial inspections and after agency officials are not convinced a firm is correcting its problems.

FSMA authorized FDA to order recalls not only after firms refuse to remove products from the market, but also if a recall is not conducted satisfactorily or a firm fails to provide information FDA requests on recalled products.

Since FSMA regulations became effective, the agency has returned to many manufacturing facilities for re-inspections after determining that firms were not correcting good manufacturing practices violations.

FDA Budget Request ($ in millions)
Direct Appropriation		FY 2015	FY 2016 Enacted	FY 2017 Request
Salaries & Expenses
Foods		$903.3	$987.3	$1,012.6
	Center	$280	$304	$304
	Field	$623.4	$683.3	$708.6
Drugs		$482.2	$491.5	$491.5
	Center	$346	$355.3	$354.9
	Field	$136.2	$136.2	$136.6
Total Buildings & Facilities		$8,997	$8,788	$11,788
Total Direct Appropriation		$2,607.7	$2,728.1	$2,742.7
User Fees
Foods		$10.4	$11.6	$182.5
Drugs		$847.4	$903.3	$916.5