FDA emerges from the fiscal year 2011 budget-cutting fight with $3.655 billion to spend - $418 million more than in FY 2010. This includes an increase of $108 million in Treasury funds, otherwise known as budget authority, and $311 million more in user fees.

FDA's increased budget is part of H.R. 1473, which was worked out by House and Senate appropriators to implement an agreement reached by House and Senate leaders and President Obama to cut federal spending by $40 billion in the fiscal year that ends Sept. 30. House and Senate votes on the measure will occur later this week.

The Department of Defense and Full-Year Continuing Appropriations Act of 2011, which was released April 12, provides FDA with $2.452 billion in budget authority. That is 14% more than the $2.104 billion contained in a House-passed funding package (H.R. 1), and 4% higher than the $2.345 billion given to the agency in fiscal 2010.

The higher budget authority takes into account "the federal government's responsibilities to protect public health and safety, especially in the areas of food, drugs, medical devices and biologics," the Senate Appropriations Committee explained in its summary of the FY '11 spending program.

User fees total $1.204 billion in both H.R. 1 and H.R. 1473. The prescription drug and other medical product fees are designed to grow with inflation, and the House increase of tobacco industry fees from $235 million to $450 million, remains in the final bill. Prescription drug user fees will rise to $667 million from $578 million in FY '10.

CDER and related inspection activities of the Office of Regulatory Affairs are funded at $957 million from both budget authority and user fees, up $77 million from FY '10, and CBER and related ORA activities at $326 million, up by $20 million from FY '10. The "other activities" category, which includes the Office of the Commissioner and Office of Chief Scientist, is slated to receive $213 million, $12.5 million more than in FY '10.

While the additional budget authority is intended to fund implementation of the Food Safety Modernization Act, the new money frees up funds that would have gone to that effort for other purposes. This could benefit the fledgling regulatory science program. Commissioner Margaret Hamburg proposed to start the program with $25 million in FY '11 (Also see "FDA Regulatory Science Infrastructure Gets $25 Million Push In Budget" - Pink Sheet, 8 February, 2010.).

Since continuing resolutions have kept the government spending at fiscal 2010 levels during the first half of FY 2011, the increases in the CR will be available for FDA to spend in the next six months.

Much Better Than The Alternative

Had Republicans and Democrats not reached agreement on the FY '11 budget, the federal government would have closed its doors April 9 when funding ran out.

At FDA this would have meant only 14% of the FDA workforce - 1,962 of 13,673 employees - would have remained on the job under rules that allow agencies to conduct essential services.

Those at FDA designated as "exempted" from a shutdown are food and medical product safety inspectors, and criminal investigators and researchers with ongoing cases or experiments or those needed to care for research animals. Staff at the Center for Tobacco Products would have remained on the job because of user fees.

Since it is so late in the fiscal year, user fees collected for prescription drugs and other medical product activities have been spent and could not keep reviews going, according to Acting Associate Commissioner for External Affairs Meghan Scott.

Regulatory staff at Novartis and Pfizer also breathed a sigh of relief that FDA kept its doors open. An Oncologic Drugs Advisory Committee meeting scheduled for April 12 to discuss new indications for the former's Afinitor (everolimus) and the latter's Sutent (sunitinib) could have been cancelled. FDA had set 9 a.m. April 11 as the deadline for determining whether the meeting would proceed.

-Cathy Dombrowski (c.dombrowski@elsevier.com)

FDA Budget To Rise By $418 Million In FY 11 As Congress Decides To Cut Spending Elsewhere

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