President Obama is seeking a 17 percent bump for the U.S. Food and Drug Administration’s budget for Fiscal Year 2013 and nearly all of that increase would come from upping industry fees, according to the budget request released by the administration Monday.
Food industry stakeholders were closely watching for details on the president’s request for FDA because the agency, which oversees 80 percent of the food supply, is rolling out the one-year-old Food Safety Modernization Act, an initiative the Congressional Budget Office estimates will cost $1.4 billion over five years to implement.
For FY 2012, the FDA ended up receiving a $50 million boost, in large part to help fund food safety — a somewhat miraculous feat in a tough budgetary environment. Under the Obama budget plan, FDA’s discretionary budget would be essentially frozen at current levels for FY 2013, at $2.5 billion.
The plan calls for a $253 million increase for food safety, $220 million of which would come from industry fees. The request also seeks $10 million to improve FDA’s cooperation with and capacity in China.
“The end result is that agencies like the FDA are more and more dependent on user fees raised by some of the same industries they oversee,” Politico noted Friday. Forty-four percent of Obama’s $4.5 billion request for FDA comes from various fees.
It is not clear what types of food facilities would pay fees, or whether the fees would extend to farms. The details have not yet been worked out, according to Patrick McGarey, Assistant Commissioner for Budget at FDA.
“This is a situation where we’ve characterized this as a food safety registration fee. The law defines who should register…that’s a proposal that they’re familiar with from years past,” said McGarey, referring to the House version of the Food Safety Modernization Act, which did not become law.
“We’re open to working with industry to shape a proposal that meets their objectives and our objectives and meets the public health needs of food safety,” added McGarey. “We’ve not defined the registration fee yet as to which facility and at what amount the fee would be assessed.”
“We’re just open to alternative recommendations. If we’re open minded about it, we get some constructive and creative proposals,” he said. “We’re eager to get comments and feedback from stakeholders.”
What is clear is that a broad coalition of food industry groups are vehemently opposed to food safety fees.
“Imposing new user fees on food makers is the wrong option for supporting food safety programs as businesses can ill afford new cost burdens, which ultimately would represent a new food safety tax on consumers,” read an industry letter sent to the so-called supercommittee in October.
The Alliance for a Stronger FDA, a coalition of industry and consumer groups, reacted to the proposal with concern because it relies too heavily on fees.
“The FDA’s essential role in protecting public health continues to grow to meet the demands of our time. With no other agency as fallback, we believe that FDA’s funding should be increased to reflect the agency’s vast responsibilities and increased workload,” said Margaret Anderson, president of the Alliance and executive director of FasterCures. “Inadequate funding for the FDA has real and immediate consequences as it jeopardizes the public health.”
“In this year of austerity, we appreciate that the President has proposed the same funding for FDA, even while many other agencies have been cut. However, this is not enough when the FDA mission is expanding and the agency is providing services and protections that Americans value,” said Diane Dorman, of the National Organization for Rare Disorders, who serves as vice president of the Alliance.