Budget battles hold new FDA user fees hostage

Congressional budget battles are holding hostage millions of additional dollars the medical device industry agreed to pay in new FDA user fees to help fund an improved, more transparent regulatory process.

Industry trade group AdvaMed wants Congress to address the problem by separating the voluntary industry fees from the ongoing battle, arguing that the money should be treated differently than discretionary funds. And the new continuing resolution House 2013 budget filed Monday afternoon may accomplish this, at least in part.

"We believe the FDA should have full, 100% access to fees appropriated from the industry," J.C. Scott, AdvaMed's chief lobbyist, told FierceMedicalDevices. "It should be in a separate category than the discretionary funding at large.... We think that needs to be corrected."

Back in July, a bipartisan agreement boosted device industry fees from $295 million over the previous 5 years to $595 million over the next 5, in order to help modernize the FDA's evaluation and processing of device approvals. Device companies are still paying the higher fees, but the budget conflicts are preventing the FDA from accessing the additional money, essentially keeping it in limbo.

The automatic, across-the-board federal spending cuts that kicked in on March 1 as part of sequestration slashed 5% of the FDA's budget. And while the new user fees are still being collected in full, the FDA can't tap the $2 million to $2.5 million of new user fees approved for fiscal 2013. (CDRH funding overall will be about $15 million to $16 million less than expected this fiscal year if sequestration stands, AdvaMed estimates.)

But sequestration is only part of the problem. Congress' continuing resolution that funded the federal government through March of this year only let the FDA access industry user fees approved for fiscal 2012. The new House continuing resolution filed Monday to fund the government for the rest of fiscal 2013 would help free up the money. If it doesn't get approved, however, $40 million in user fees will remain in limbo.

Medical device companies aren't alone in this situation: The drug industry is facing a similar problem and other industries aren't immune, Scott reminded us.

"FDA user fees are not alone in this dilemma," Scott said. "It hits just about every user fee program in the federal government. Not many people on the Hill are focused on that fact, and we are trying to make sure we are drawing attention to it."

- read the new House budget bill (PDF)

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