• Decrease font size
  • Return font size to normal
  • Increase font size
U.S. Department of Health and Human Services

About FDA

  • Print
  • Share
  • E-mail

Budget in Brief

<< Return to FY 2005 Budget Proposal

PROMOTING AND PROTECTING PUBLIC HEALTH

 

Agency Mission Overview

 

As a part of the Department of Health and Human Services (DHHS), FDA has broad responsibilities for promoting and protecting the safety and health of the American public.  As shown in the following mission statement, these responsibilities cover a wide range of regulatory activities. 

 

FDA's Mission

The FDA is responsible for protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, our nation's food supply, cosmetics, and products that emit radiation.  The FDA is also responsible for advancing the public health by helping to speed innovations that make medicines and foods more effective, safer, and moreaffordable; and helping the public get the accurate, science-based information they need to use medicines and foods to improve their health.

 

Along with this comprehensive mission, FDA also plays significant roles in addressing the nation's counterterrorism capability and ensuring the security of the food supply.  The Agency's role in counterterrorism was strengthened with the passage of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, P.L. 107-188, and more recently in July 2003 with the Administration's provision of $5,000,000 in additional funding for food security research.

FDA decisions affect virtually every American every day as last year consumers spent nearly $1.5 trillion, or more than 20 percent of all consumer expenditures on FDA-regulated products.  Operating as a scientifically up-to-date and efficient agency that is responsive to our customers, FDA can provide better protection for consumers and more effectively promote their health through providing accurate health information. 

 

Strategic Goals

FDA will work to achieve its broad mission through a comprehensive and complementary set of long-term strategic goals, by placing a greater emphasis on linking program performance and accomplishments to budgetary resources.  In establishing these goals,  the Commissioner focused FDA's resources into five strategic goals which are aligned with the nation's health priorities: 

  • More Effective Regulation through a Stronger Workforce;
  • Efficient Risk Management: The Most Public Health Bang for our Regulatory Buck;
  • Empowering Consumers: Improving Health Through Better Information;
  • Improving Patient and Consumer Safety; and,
  • Protecting America from Terrorism.

These goals cover broad, cross-cutting areas, supported by the Agency's annual performance goals.

These goals contribute to achieving long- term outcome goals that have a significant impact on the health of the people in the United States. The development of these goals was encouraged by the Office of Management and Budget (OMB) in the FY 2004 budget cycle, when several of FDA's major programs were evaluated using the Program Assessment Rating Tool (PART).  These long-term goals resulted in a significant improvement of the PART score which rose from 59 percent in FY 2004 to 77 in FY 2005.

As shown in the following table, FDA's strategic goals fully support the objectives of the Department:

 

Crosswalk of DHHS Strategic Goals and DHHS Secretarial Priorities with FDA Goals

 

DHHS Strategic Goals Secretary's FY 2005 Priorities FDA Strategic Goals Requested fy 2005 BUDGET AUTHORITY increases 1/
Achieve Excellence in Management Practices Modernizing IT and Establishing an HHS Health Architecture Strong FDA

+$34,980,000
(CDER Move and Cost of Living - Pay increase)

Strengthening Management
Enhance the capacity and productivity of the Nation's Health Science Research Enterprise Improving the Quality of Health Care Efficient Risk Management: The Most Public Health Bang for Our Regulatory Buck

+$25,555,000
(Medical Device Program)

Improve the Quality of Health Care Services Improving the Quality of Health Care Improving Patient and Consumer Safety

+$8,325,000
(BSE)

Enhance the ability of the Nation's health care system to effectively respond to bioterrorism and other public health challenges. Responding to Bioterrorism and other Public Health Emergencies Protecting America from Terrorism

+$70,000,000
(Food Defense and Medical Countermeasures)

 

 1/ Excludes offsets of $6,959,000 from Building and Facilities and $23,122,000 in Administrative Efficiencies.

 

FY 2005 Budget Request

 

In accordance with the FDA's strategic plan, certain activities require increased funding in order to achieve its key goals.  The proposed increases will allow FDA to continue its programs at current levels while supporting important new initiatives and facing new challenges that fall within its mission.

The FY 2005 budget request includes the following programmatic changes:

 

FY 2005 Summary of Change
Program Level
 (Dollars in $000)

Increase Area Total
Cost of Living $14,352
Food Defense $65,000
Bovine Spongiform Encephalopathy $8,325
Medical Device Review $25,555
Medical Countermeasures $5,000
CDER Move $20,628
Buildings and Facilities ($6,959)
Administrative Efficiencies ($23,122)
User Fees $40,385
Total $149,164

 

 

Cost of Living: + $14,352,000

This requested increase helps cover the 4.1 percent cost of living increase for calendar year 2004, and a 1.5 percent cost of living increase for calendar year 2005.  Since FDA's mission is accomplished primarily through its employees, payroll has a major impact on the budget.  If this is not funded, FDA will have to reduce some of its program areas and reduce mission-critical activities because the Agency can not absorb this payroll  amount without a corresponding FTE loss. 

 

Food Defense:  + $65,000,000

The FDA and the USDA have developed a joint food defense budget for the defense of the agricultural and food sectors in cooperation with the White House Homeland Security Council.  FDA has developed a request that encompasses the following cross-cutting Administration priorities of:

  1. Establishment of a national laboratory network for testing of food samples;
  2. Research efforts, including prevention technologies, methods development, determination of infectious dose for certain agents when ingested with food, and agent characteristics within specified foods;
  3. Improved coordination and integration of existing food surveillance capabilities;
  4. Increased inspection activities; and,
  5. Upgrading Crisis management capabilities.  

This request will enable FDA to make significant strides in addressing our laboratory, research, inspectional, biosurveillance and crisismanagement needs.  FDA and USDA are developing a national laboratory network for testing of food samples that will enable us to test thousands of food samples within a matter of days if there is a food terrorism event as well as responding to other food safety activities.  This important effort will require continued funding over the next three years to establish a network of Federal and state labs across the U.S.  Research funding will ensure that we can detect or inactivate certain agents if they are present within foods.  FDA will also increase the number of domestic establishment inspections and import field examinations and protect the national food supply.  In addition, funds are requested to support the Administration's biosurveillance initiatives and to improve incidence management capabilities.

The events of September 11, 2001 heightened the nation's awareness and placed a renewed focus on ensuring the protection of the nation's critical infrastructures, such as the food supply.  Such an attack on the food supply could pose both severe public health and economic impacts, while damaging the public's confidence in the food we eat.  As a result of this awareness, FDA has made fundamental changes in how we implement our mission of protecting the food supply, so that all Americans can have confidence that their food is not only safe but also secure.  With this request, the Agency can continue to make progress in achieving our goals for food defense.

 

Bovine Spongiform Encephalopathy (BSE): + $8,325,000

In responding to the discovery of a Holstein cow infected with BSE in the U.S. in December 2003, the USDA has implemented additional safeguards to protect the nation's food supply from further outbreaks.  In supporting these USDA safeguards, FDA announced that it would harmonize its activities to parallel USDA in protecting the safety of the food and feed supply.

In January 2004, HHS and FDA announced several public health measures to help protect Americans from exposure to the agent that causes BSE.  These measures include:

  • Extend restrictions on using prohibited material in the manufacture of FDA-regulated foods, dietary supplements, and cosmetics;
  • Eliminate an exemption in the feed rule that allows mammalian blood and blood products at slaughter to be fed to ruminants as a protein source;
  • Ban the use of "poultry litter" as a feed ingredient for cattle and other ruminants; and
  • Prohibit the use of "plate waste" as a feed ingredient for ruminants, including cattle.

With the increased funding in FY 2005, FDA will undertake a trilateral approach of increased inspections, enforcement activities, and education.  Specifically, FDA will leverage resources with states by:

  • Increasing funding of state BSE inspections and monitoring, so that the states can perform an additional 2,500 inspections; improve state and federal information on the inventory of animal feed firms and firms handling prohibited materials; and strengthen state infrastructure to monitor, and respond to potential feed contamination with prohibited materials;
  • Improving state and Federal information on the inventory of animal feed firms and firms handling prohibited materials;
  • Strengthening state infrastructure to monitor, and responding to potential feed contamination with prohibited materials; and,
  • Educating industry on requirements of new/updated regulations and the impact to their practices.

Increase FDA BSE activities by:

  • Increasing funding for field BSE inspections, sample collections and analyses so that FDA can perform an additional 920 risk-based BSE inspections and an additional 600 targeted sample collections and analyses of both domestic and imported animal feed or feed components;
  • Increasing the funding of field investigator training, state coordination, and industry outreach to: expand investigational efforts to industry sectors, such as truckers, on-farm mixers and distressed or salvaged food; improve data quality and data management practices so that FDA can better monitor industry compliance and improve the usefulness of state data; and conduct industry outreach to better inform industry of responsibilities and opportunities to prevent BSE from contaminating animal feed;
  • Evaluating the effectiveness of commercial tests to detect ruminant proteins in animal feeds, and initiative migration of current research methods, Polymerase Chain Reaction (PCR), into new technologies to allow for more rapid analyses of samples; and,
  • Analyzing and auditing BSE reported inspectional information which will determine where additional inspections and education is needed.

Upgrade FDA's Office of Crisis Management Emergency Operations by: 

  • Upgrading equipment in the Emergency Operations Center (EOC), including further integration of communications systems and purchasing additional software to better manage a potential BSE incident;
  • Implementing a management system to ensure collaboration and development of geographic information, including geocoding of all firms being inspected for BSE; and,
  • Providing equipment to facilitate EOC operation during activation, twenty-four hours a day, and seven days a week. 

 

Medical Device Program:  + $25,555,000

To strengthen FDA's medical device review process, the Medical Device User Fee and Modernization Act (MDUFMA) was authorized in FY 2002.  MDUFMA is a multi-year effort to improve the quality and timeliness of the medical device review process, by authorizing the collection of user fees and creating an aggressive set of performance goals.  This legislation only allows the Agency to collect user fees if a number of "triggers" are met, including achieving a certain level of budget authority for the Medical Devices and Radiological Health program.  The ability to collect this user fee is critical to strengthen the medical device review process and to meet the medical device review goals by 2007.    

The total increase of budget authority necessary to meet this level in FY 2005 is $56,881,000.  However, FDA acknowledges that this is unrealistic, and is only requesting a $25,555,000 increase for medical device review, along with $2,284,000 in additional user fees for the Devices and Biologics Programs   This will allow the Agency to meet the minimum statutory appropriation level for FY 2005.  Without this budget authority increase, our ability to continue to collect user fees would be jeopardized, as would the ability to hire over 400 additional FTE over the next five years to support the medical device review process, thus creating a significant public health setback.  The user fee and the staff positions it funds is critical to our ability to expedite medical device review times.

 

Medical Countermeasures:+ $5,000,000

FDA has played a lead role in preparing for the implementation of Project BioShield, which is designed to help ensure medical preparedness in the event of war or catastrophic events.  Under this initiative, rapid and effective review will be needed of specialized products serving certain segments of the population such as military personnel, first responders, those near nuclear facilities, as well as special populations such as pregnant women, and immuno-compromised individuals and children.  The requested funding increase will have a measurable and material impact on the nation's preparedness to respond to biological, chemical, and nuclear attacks, which will require FDA to devote more personnel to assist companies developing new countermeasures and to implement regulations to provide for "emergency use authorization" for these countermeasures.

 

CDER Move: + $20,628,000

Total resources for the CDER move to White Oak in FY 2005 are $33,081,000, including increases of $20,628,000 in new budget authority, $2,361,000 in recurring move costs from the FY 2004 enacted level, and $10,092,000 in new and carryover PDUFA fees.  This move is scheduled to occur in April of 2005, with an estimated 1,700 CDER drug review personnel moving.

 

Building and Facilities  ($6,959,000)

In an effort to fund other higher priority initiatives, funding for the buildings and facilities account has been eliminated for FY 2005.  To the extent possible, essential maintenance will be conducted with existing carryover funding from this account.

 

Administrative Efficiencies: ($23,122,000)

By fully embracing the President's Management Agenda and the Secretarial priorities, FDA has made the changes necessary to delayer its organizational structure, perform competitive sourcing reviews, modernize its financial management system, and consolidate its information technology infrastructure.  Efficiencies derived from improved administrative services have resulted in savings that can be redirected to high priority programmatic activities.  This efficiency will result in an additional 7.5 percent administrative reduction.

 

User Fees:  + $40,385,000

This budget request includes user fee increases of $34,569,000 for prescription drug review, $2,284,000 for medical device review, $3,000,000 for animal drug review, $343,000 for mammography inspections, $45,000 for export certification, and $144,000 for color certification.

 

FY 2005 Budget Request
Program Level
(Dollars in $000)

  Increase Area HeadQuarters Field Buildings &
Facilities
RENT & Rent Related GSA Rent Total

Budget Authority

 
 
 
 
 
 
Pay Increase* $7,808 $6,544
 
 
 
$14,352
CT-- Food Defense   $24,500 $40,500
 
 
 
$65,000
Bovine Spongiform Encephalopathy $1,650 $6,675
 
 
 
$8,325
Medical Device Review $24,549 $1,006
 
 
 
$25,555
CT-- Medical Product Countermeasures $4,550 $450
 
 
 
$5,000
CDER Move
 
 
 
$20,628
 
$20,628
Buildings and Facilities
 
 
($6,959)
 
 
($6,959)
Administrative Efficiencies ($16,231) ($6,891)
 
 
 
($23,122)

BA Subtotal

$46,826 $48,284 ($6,959) $20,628
 
$108,779
 
 
 
 
 
 
 
User Fees
 
 
 
 
 
 
User Fees $36,176 ($2,897)
 
$3,046 $4,060 $40,385
User Fee Subtotal
 
 
 
 
 
$40,385
 
 
 
 
 
 
 
TOTAL
 
 
 
 
 
$149,164

 

*Includes a cost of living pay increase of 1.5 percent for FY 2005.

 

FDA's Strategic Goals

The FDA, recognized globally as the gold standard for food and drug safety and effectiveness, is responsible for protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, our nation's food supply, cosmetics, and products that emit radiation.  The FDA is also responsible for advancing the public health by helping to speed innovations that make medicines and foods more effective, safer, and more affordable; and helping the public get the accurate, science-based information they need to use medicines and foods to improve their health.  FDA has aligned its performance goals and activities under its five strategic goals.  These strategic goals include:

Strong FDA -- This strategic goal focuses on the critical infrastructure that provides scientific support and administration to FDA's programs.  The managerial and operational efficiencies being pursued under this goal are aligned with the President's Management Agenda, the Secretary's FY 2005 Priority of strengthening management by creating a more streamlined, cost-effective, and accountable organization, and the DHHS strategic goal to achieve excellence in management practices. 

Current strategies that will ensure FDA alignment with these initiatives include: 

  • Operating with no more than four layers of management;
  • Using competitive sourcing to maximize cost-effective performance of functions;
  • Consolidating administrative sources through the use of a high performing organization operating in a shared services environment;
  • Creating flexible human resource policies and programs to recruit, reward, and retain state-of-the-art scientists and health professionals;
  • Enhancing the capacity to produce program performance data demonstrating progress in meeting the Agency's long-term outcome goals; and,
  • Developing a performance contract system under which all staff will be held accountable for achieving specified priority accomplishments. 

In pursuing this goal, we will continue to focus on creating a modern and efficient infrastructure that will support the mission-critical activities of the Department.

 

Increased Operating Efficiencies

FDA has reduced the number of management levels; developed  a shared services organization to provide administrative services to the Office of the Commissioner and to the Centers starting in October 2003; continued its headquarters facilities consolidation in the Washington, D.C. area; established an Agency-wide enterprise architecture for IT; prepared for the  new financial management system that will provide qualitative and quantitative benefits; used a variety of human resources initiatives, such as Quick Hire, to expeditiously hire over 800 investigators and analysts to increase the surveillance of products at the border, and successfully completed six A-76 competitions, all of which resulted in in-house wins for FDA staff.

The proposed HHS Unified Financial Management System (UFMS) also supports this goal. UFMS is designed to provide financial information in a manner that will enable FDA to maintain its clean audit opinion and meet all other financial management requirements.  UFMS will provide FDA's management with timely, reliable, and current financial information.  FDA's Financial Enterprise Solutions (FES), will provide real-time reporting and allow for easier development of the DHHS/FDA financial statements. 

 

The Strong FDA outcome goal and some key program goals for FY 2005 are highlighted in the following table:

 

Strong FDA

Outcome Goal

Reduce the number of administrative staff by 7.5 percent by the end of FY 2004, with a total reduction of 15 percent by the end of FY 2005.

 

Performance Goals

  • Complete implementation of the Shared Services Organization;
  • Increase the percentage of commercial activities that will be reviewed for potential outsourcing; and,
  • Integrate budget and performance plan processes.

 

Efficient Risk Management: The Most Public Health Bang for our Regulatory Buck -- This strategic goal focuses on the traditional public health mandate regarding safety and effectiveness of FDA-regulated products, while emphasizing risk management efficiencies.  Developing and applying approaches that provide the most health protection at the least cost both improves agency cost-effectiveness and supports better industry efficiency and market competition. Ultimately, the improvements will help control health care costs. 

FDA's approach to efficient risk management includes using the most current scientific and technical expertise to clarify regulatory requirements.  It involves analysis of current systems and practices, and improving standards and FDA-industry communications to reduce unnecessary delays.  FDA's approach uses quality systems, and the best available data and analytic methods to assess risk and target cost-effective risk management, for both pre-market and post-market regulation with continued evaluation of program performance relative to resources, to assure the best return for our investment in public health.

This strategic goal employs four strategies:

  1. Provide a timely, high quality, and a cost-effective process for review of new technologies/premarket submissions.  This includes: 
  • Reducing avoidable delays and costs in product approvals through clear expectations and effective communication of standards by analyzing the root causes of multiple review cycles and establishing steps to prevent additional cycles when possible;
  • Initiating development of a continuous improvement/quality systems approach throughout pre-market review; and,
  • Directing agency research programs and develop standards to effectively handle emerging technologies.

 

Increasing Availability of Drugs

A tangible result of this strategy is the new initiative to accelerate the access to generic drug products to save consumers billions of dollars each year by streamlining regulations governing the review of generic drugs.  This will enable generic drug manufacturers to more easily bring safe and effective products on the market when the appropriate patent protection expires.  The initiative also includes an expanded educational program to help consumers get accurate information on generic drugs; improved communication with generic drug manufacturers early in the application process; an enhanced monitoring of the safety of generic drugs on the market; and improved guidance for generic drug manufacturers preparing and submitting quality, complete applications. 

  1. Provide high quality, cost-effective oversight of industry manufacturing, processing and distribution to reduce risk.
  • Apply the most current scientific knowledge about risk management and quality assurance to FDA's requirements, including current Good Manufacturing Practice inspections, compliance, and enforcement activities;
  • Develop new inspection approaches to more effectively utilize resources; and,
  • Implement an efficient, risk-based system to increase the availability of safe FDA-regulated imports by: increasing assurance in source countries and at points of entry into U.S. commerce; improving detection of noncompliant products; and, developing standards and procedures to maximize the cost-effectiveness of Agency oversight.

 

Good Manufacturing Practices

A two-year initiative, "Pharmaceutical Current Good Manufacturing Practices for the 21st Century:  A Risk Based Approach" was launched last year to modernize FDA's regulation of pharmaceutical manufacturing and product quality covering human and animal drugs and biologics.  The initiative seeks to ensure that state-of-the-art pharmaceutical science is used in the regulatory review and inspection policies; encourage adoption of technological advances in pharmaceutical industry's manufacturing practices; and enhance consistency and coordination of FDA's drug quality oversight activities.

  1. Assure the safety of the U.S. food and cosmetics supply to protect consumers at the least cost for the public, FDA will:
  • Develop and use new scientific knowledge and public health systems to quickly and accurately identify food safety hazards so that disease can be properly managed;
  • Identify appropriate prevention standards, and apply preventative controls and inspection and monitoring systems to assure food safety for all U.S. consumers; and,
  • Measure results regarding health outcomes to verify that foodborne illness and injury is being reduced.
  1. Identify the most effective and efficient risk management strategies and optimize regulatory decision-making, FDA will:
  • Develop and evaluate methodological strategies using scientific data to optimize pre-market and post-market regulatory decisions;
  • Develop timely, first-rate integrated risk assessment and economic analysis to identify efficient risk management options for policy makers; and,
  • Develop measures of outcomes and effectiveness as well as evaluation plans for major programs for continuing assessment and management of performance and cost.

 

BSE Prevention Activities

The main focus of FDA's BSE-prevention program has been regular inspections of all renderers and feed mills handling prohibited material in the U.S., more than 99 percent of which have achieved compliance with a 1997 FDA rule that prohibits the inclusion of most animal protein in feeds for cattle and other ruminants. The effectiveness of FDA's surveillance was most recently confirmed by the fact that all of the firms involved in the December 2003 BSE investigation in Washington State were found to be in compliance with the FDA rule.  FDA activated its Emergency Operations Center in response to this event.

 

FDA's outcome goals and some key program goals for FY 2005 are highlighted in the following table:

 

Efficient Risk Management

Outcome Goals

  • Reduce average time to marketing approval for safe and effective new drugs and biologics;
  • Reduce average time to marketing approval or tentative approval for safe and effective new generic drugs; and,
  • Reduce average time to marketing approval for safe and effective new medical devices.

 

Performance Goals

  • Ensure that a safe and effective drug supply is available to the public; and,
  • Inspect 55 percent of an estimated 685 registered high-risk human drug manufacturers.

 

Empowering Consumers: Improving Health through Better Information - This strategic goal focuses on providing the best available information of the risks and benefits of using FDA-regulated products to patients, consumers, and health professionals. 

FDA believes that well-informed consumers and health professionals can achieve an improved health outcome if they have accurate and timely information to make informed decisions regarding diet, nutrition, and health care.

Four strategies will be used to achieve this strategic goal:

  1. Develop an understanding of what information consumers need to make informed product choices;
  2. Develop the mechanisms necessary to communicate to a variety of audiences;
  3. Assure that information communicated to consumers is based on sound scientific evidence; and,
  4. Determine the impact of FDA communications on constituents understanding, behavior, and health outcomes.

The desired outcome is to provide consumers, health professionals, and other stakeholders with accurate and timely information on potential benefits and health consequences of FDA-regulated products.

 

Better Information to Consumers

In December 2002, FDA began its health information initiative to provide consumers with useful information on making dietary choices (covering food and dietary supplements.)  The initiative has resulted in two major proposals covering the food label and health claims process.

FDA is proposing that food labels will be required to list the amount of unhealthy trans fatty acids, or trans fat.  Knowledge of the amount of trans fat in the food product will allow consumers to weigh the importance of this information among their personal health criteria, and enable them to make critical judgments on whether to choose this or another product that may have a lower trans fat amount.

In addition, a new process for systematically evaluating and ranking the scientific evidence for a qualified health claim was proposed.  This system will categorize the quality and strength of the scientific evidence which will be displayed in a health claims report card with four grades ("A" through "D").  An "A" grade indicates significant scientific agreement, while a lower score indicates less certainty with the scientific evidence. This information will allow consumers to make choices on a product's health claim.

 

An outline of FDA's outcome goal for FY 2005 is highlighted in the following table:

 

Empowering Consumers:
Improving Health through Better Information

Outcome Goal

Increase the understanding of consumers regarding the impact of dietary choices on risk of coronary heart disease, obesity, diabetes, or other conditions.

 

Improving Patient and Consumer Safety -- This strategic goal centers on improving risk identification, analysis, and communications to health care professionals and to patients.

FDA desires to minimize the adverse health events that involve the use of FDA-regulated products. The risks associated with medical products are never fully revealed during the premarket review process, and it is only after the medical product has been used in a wider patient population that adverse events may emerge.  Some of these potential adverse health effects may be prevented if systems are upgraded to improve the speed in which risks are identified. 

  1. Enhance the ability to quickly identify risks associated with FDA-regulated products:
    • Pilot new automatic reporting system with public and private partners.
  2. Develop analytical capability to identify and quantify medical product risk:
    • Use databases from other government agencies and various health care organizations as well as innovative analytic techniques to improve risk assessment of FDA-regulated products.
  3. Increase communication of risks to educate healthcare professionals and patients about problems and solutions associated with appropriate product use.
    • Expand electronic delivery of the Patient Safety News

Medical Errors

The Reducing Medication Errors Initiative intends to use modern technology (i.e., bar coding) to reduce the number of medication errors in hospitals and other health care settings.  The initiative also improves safety reporting requirements by requiring the use of internationally agreed definitions, reporting formats, and other safety reporting standards. 

 

Minimizing the risks associated with medical products is an integral part of health care that will maximize health outcomes and improve the quality of care.  The desired outcome of this strategic goal is to significantly reduce the number of deaths and complications and adverse events related to FDA-regulated products.

The Patient and Consumer Safety outcome goal and a key program goal for FY 2005 are highlighted in the following table:

 

Improving Patient and Consumer Safety

Outcome Goal

  • Increase the U.S. patient population covered by active surveillance of medical product safety.

 

Performance Goal

  • Enhance postmarketing drug safety.

 

Protecting America from Terrorism -- This strategic goal focuses on FDA's preparation and response to a terrorist attack on the U.S. population.  Specifically, this entails four strategies:

  1. Facilitate the development and availability of medical countermeasures to limit the effects of a terrorist attack on the civilian or military populations;
  2. Enhance the Agency's emergency preparedness and response capabilities to be better able to respond in the event of a terrorist attack;
  3. Ensure the safety and security of FDA personnel, physical assets, and sensitive information; and,
  4. Protect the security of foods for the people in the United States, and animal feeds regulated by the FDA.

Food Security Research

In accordance with a Secretarial Initiative on Food Security Research and FDA's role in protecting the food supply, the Administration provided FDA with an additional $5,000,000 in July 2003, for food security.  Its purpose is to develop technologies and strategies to prevent and minimize potential threats to the safety and security of the nation's food supply.  This initiative will focus efforts to create new prevention and mitigation technologies; and to improve the ability to assess foods for contamination with chemical, biological, and radiological agents. 

 

This priority remains a high concern for the Secretary and focuses FDA to complete the investments it has made to strengthen the Agency's responsiveness and capacity regarding public health emergencies. 

The desired outcome is to ensure the public is protected from public health threats posed by possible terrorist attacks, and that all people in the U.S. continue to enjoy a safe and secure food supply.  An outline of two proposed outcome goals and some key program goals for FY 2005 are highlighted in the following table:

 

Protecting America from Terrorism

Outcome Goals

  • Enhance laboratory capacity to better deal with potential terrorist attacks; and,
  • Reduce the overall risk associated with potential terrorist attacks on food through improvements to activities within FDA authority.

 

Performance Goals

  • Increase FDA's laboratory capacity to effectively analyze food samples for contamination in the event of a terrorist attack;
  • Perform 97,000 physical exams and conduct sample analyses on products with suspect histories; and,
  • Enhance the Agency Emergency preparedness and response capabilities to be better able respond in the event of a terrorist attack.

 

Rapid Response Workforce

In addition to conducting its broad public health mission in accordance with these goals, the FDA and its employees often must respond to unforeseen emergency situations.  In 2003 alone, FDA participated in Operation Liberty Shield and TOPOFF2.

 

Operation Liberty Shield

Operation Liberty Shield is a one-time multi-agency national plan designed to increase protections for America's citizens and infrastructure.  By leveraging its resources with these local partners, FDA increased surveillance of domestic and imported foods and enhanced collaboration with state and other government agencies. FDA's efforts during Operation Liberty Shield prepared its inspection and laboratory staffs to respond to a future threat and/or actual event involving an FDA-regulated product.

 

TOPOFF 2

In May 2003, FDA participated in TOPOFF 2, a full-scale, fully functional counterterrorism exercise.  This exercise was intended to simulate two separate terrorist attacks: detonation of a "dirty bomb" in Seattle and aerosol release of pneumonic plague in Chicago.  FDA activated its Emergency Operations Center, deployed representatives to the field, assessed the safety of potentially affected products, issued guidance and press, and FDA Centers and Offices collaborated to address issues related to availability and safety of medical countermeasures.

 

COST OF LIVING

 

Desired Outcome

Maintain FDA's ability to fulfill its mission of protecting the public health by focusing on counterterrorism efforts, minimizing preventable adverse events, improving the safety and security of the food supply, and improving patient access to safe and effective medical products, while ensuring a strong workforce.

 

Program Objectives

The public trusts FDA to ensure that food on the family table will be safe and wholesome; that new medical products, drugs, biological products, medical devices, and radiological products are available in a timely manner with demonstrated benefits that outweigh risks; and, that product information is useful and understandable.

 

Why is FDA's Contribution So Important?

Personnel are essential to accomplishing FDA's mission, as it is more people-intensive than many government agencies with payroll accounting for more than 60 percent of its total budget.  These people are deployed where it matters most, with 45 percent of the workforce dedicated to "front line" efforts, such as inspections for food safety, animal feeds in relation to BSE and FDA-regulated products; coordination with states; and cooperative education programs.

FDA personnel are essential because:

  • To appropriately prepare and respond to a terrorist attack FDA must continue to support the counterterrorism staff hired under the FY 2002 Emergency Supplemental;
  • Inspectional responsibilities require hands-on coverage of the entire country, in addition to foreign establishments;
  • FDA's product review functions require numerous interdependent specialists that are proficient in various product areas to interact with industry on a regular basis; and,
  • Regulatory responsibilities require staff to monitor the entire life cycle of all FDA-regulated products from premarket review to postmarket monitoring to ensure continued safety.  For example, a drug is monitored from clinical trials through drug application review, to approval of advertising, to the product's effect on patient health.

 

Requested Increases for FY 2005
(Dollars in $000)

Program Center Field Total
Foods
1,722
4,033
5,755
Human Drugs
2,655
1,521
4,176
Biologics
1,091
459
1,550
Animal Drugs and Feeds
603
531
1,134
NCTR
445
-
445
Other Activities
1,292
-
1,292
Total
$7,808
$6,544
$14,352

 

* The increase for Devices and Radiological Health is provided for as part of the increase for the Medical Device Premarket Review Program.

This request includes $14,352,000 in budget authority for pay-related increases.  These increases help FDA to continue its programs at the current level which:

  • Support the development of new counterterrorism tools to accelerate the availability of medical products (i.e., drugs, vaccines) necessary to protect the public health, and provide support to the Centers for Disease Control and Prevention to manage the quantity and quality of stockpiled drugs and vaccines;
  • Improve our ability to assure the safety of regulated products, inspect and investigate domestic and foreign manufacturers and negotiate Mutual Recognition Agreements with countries to establish global standards for foods and pharmaceuticals;
  • Support the application review of human drugs and biological products to meet promised performance commitments; 
  • Maintain a level of readiness and support for emergency operations in response to natural or man-made events, and provide appropriate assistance to other Federal agencies, state and local governments and other entities; and,
  • Continue to support counter-terrorism hires under the FY 2002 Emergency Supplemental who contribute to protecting the nation's food supply, in addition to protecting against the spread of BSE and conducting FDA-regulated product inspections.

 

Consequences of Not Receiving Pay Increases

Without the full increase, staff reductions across all product areas would be necessary. This would have negative consequences including:

  • Several high-priority Administration initiatives may be affected if critical staff is reduced.  These include the National Health Product Surveillance Network, which will build the capacity to actively discover safety problems with health products and to better understand risks as they occur, Counterterrorism, food defense/security, Bioshield, the new Unified Financial Management System, and other Presidential Management Agenda items;
  • Reductions may adversely impact the work environment, possibly accelerating the rate of retirement among employees who will be eligible to retire in the next five years.  In FY 2003, 236 employees retired, and in FY 2004, an additional 279 will be eligible to retire.  If not managed, the loss of institutional knowledge may have a detrimental impact on our mission. 

Additional consequences would include:

  • Diminished abilities to respond to emergencies such as terrorist attacks, food security or outbreaks of BSE; and,
  • Delay in alleviating drug review workload, affecting staff turnover and backlog issues, and program effectiveness.

 

How are we doing?

FDA has developed strategic workforce plans to prepare the next generation of leaders; to employ workplace policies providing flexibilities to employees in managing career and family; and to train and develop the regulatory and scientific expertise needed in performing mission-critical work.  FDA has also implemented the Shared Services Organization to streamline administrative functions within the Agency. 

Anticipating the coming wave of retirements, FDA is using various leadership and succession planning initiatives, such as the FDA Leadership Program, DHHS Emerging Leaders Program and the Presidential Management Fellows Program, to ensure FDA is able to support its mission.

FOOD DEFENSE -- COUNTERTERRORISM

Desired Outcome

Safeguard the U.S. public by defending the food system against terrorist attacks, major disasters, or other emergencies.

 

Program Objectives

As one of the Administration's highest priorities, the FDA and the U.S. Department of Agriculture's Food Safety & Inspection Service (FSIS), working with the White House Homeland Security Council, have developed a joint budget request for Food Defense. 

To support this important initiative, the Administration requests $65,000,000 for FDA to help ensure the safety and defense of the nation's food supply.

Based on the administration's priorities, the aforementioned agencies have developed an integrated budget submission that is focused primarily on four major cross-cutting agency priorities:

  • Establishment of a national laboratory network known as the Food Emergency Response Network (FERN) for testing of food samples;
  • Targeted food defense research efforts, including prevention technologies, methods development, determination of infectious dose for certain agents when ingested with food, and agent characteristics within specified foods;
  • Increased inspection activities;
  • Improved coordination and integration of existing food surveillance capabilities with the Department of Homeland Security's  integration and analysis function, as part of the government-wide Bio-Surveillance Initiative; and,
  • Upgrading Crisis/Incident Management activities.

The requested funds will support the following objectives:

  • Increasing analytic surge capacity in the event of terrorist attack on food by developing adequate laboratory testing capacity for biological, chemical and radiological threat agents;
  • Developing effective protection strategies to "shield" the food supply from terrorist threats;
  • Increasing inspectional coverage of domestic firms and imported goods to reduce the risk of contaminated products entering domestic commerce;
  • Improving  early attack warning and bio-surveillance capabilities at the national level to prepare against a potential terrorist attack; and,
  • Providing capacity for rapid, coordinated responses to threats or attacks on the food supply.

The request will enable FDA to make significant strides in addressing our laboratory, research, inspectional, bio-surveillance, and crisis/incident management needs.

 

Food Emergency Response Network

FDA, along with FSIS, is in the formational stages of a national laboratory network (FERN) for testing of food samples that will enable us to test thousands of food samples within a matter of days in the event of a food terrorism crisis or other emergency event.  FERN will require continued funding over the next three years to ensure the establishment of a comprehensive joint FDA and FSIS network of Federal and state laboratories across the U.S.  The FY 2005 request will add 15 FDA-funded state laboratories to the 10 FDA Federal laboratories planned to be operational by the end of FY 2004.

 

Research

This initiative will also address the significant need for research funding to ensure that we have the capability of detecting or inactivating a broad range of agents that could pose serious threats to the food supply.

 

Inspections

In order to continue to ensure that domestic and imported foods are safe for consumption, FDA will also increase the number of domestic establishment inspections, as well as import field examinations based on intelligence information.

 

Bio-Surveillance

FDA will contribute to the Administration's Bio-Surveillance Initiative by integrating existing surveillance systems with the Department of Homeland Security, creating a seamless communications network.

 

Crisis/Incident Management

The request will also support the Emergency Operations Network Incident Management System Project.  This project will provide a comprehensive system for managing emergencies and related incidents handled throughout the FDA, including its centers and field offices.  The development of such a system is in accordance with Homeland Security Presidential Directive (HSPD-5), "Management of Domestic Incidents", and the establishment of a National Incident Management System.

 

Why is FDA's Contribution so Important?

The attacks of September 11th and subsequent national events resulted in an accelerated and intensified need for attention to counterterrorism.  As Administration officials continually reassess the nation's preparedness and security, Secretaries Thompson and Ridge have designated the food supply as part of the nation's critical infrastructure for the nation.  A terrorist attack on the food supply could pose both severe public health and economic impacts, while damaging the public's confidence in the food we eat.  

One of FDA's key areas is food safety and protecting the security of a majority of the food supply.  FDA activities include surveillance, investigations and laboratory support for detection and management of product contamination; provision of regulatory guidance to manufacturers and other government agencies to assure the availability of safe regulated products; and the establishment of a communications network that optimizes emergency preparedness and response within FDA and across the Federal Government.  FDA is making progress on many fronts, such as working with industry to provide them with sound guidance on food defense and conducting its own threat assessments of the food supply.  However, the food supply remains a point of vulnerability and FDA has developed a multi-faceted strategy to enhance food defense/security.

FDA employs five Food Defense strategies, including:

  • Development of increased food security awareness among federal, state, local, and tribal governments and the private sector by collecting, analyzing, and disseminating information and knowledge (awareness);
  • Development of capacity for identification of a specific threat or attack on the food supply (prevention);
  • Developing effective protection strategies to "shield" the food supply from terrorist threats (preparedness);
  • Developing a rapid, coordinated response capability to a foodborne terrorist attack (response); and,
  • Development of capacity for a rapid, coordinated recovery from a foodborne terrorist attack (recovery).

FDA must uphold its responsibility for ensuring the safety of approximately 80 percent of the nation's food supply.  The possibility of food products being used as a vehicle for attack is particularly worrisome because such an event potentially affects everyone in the U.S.  FDA must have the capability to assess and then reduce risks associated with unexpected and potentially widespread health and safety threats.  FDA continues to:

  • Assess the vulnerability of the U.S. food supply to an attack by terrorists;
  • Increase research to develop rapid and confirmatory laboratory methods to analyze suspect foods for select agents or toxins from CFSAN, and provide knowledge and technologies that will be the basis for new prevention-based food defense shields; and,
  • Strengthen and expand eLEXNET (electronic Laboratory Exchange Network) to facilitate electronic transfer of secure laboratory data.

FDA works closely with the states and other food safety, law enforcement, and intelligence agencies, as well as with industry, academic institutions and others, to collaborate on research, emergency response, and information exchange, all of which significantly strengthen the nation's food safety and defense system.

 

Requested Increases for FY 2005
(Dollars in $000)

Program Center Field Total
Foods* $20,250 $40,500 $60,750
Other Activities** $3,000 -0- $3,000
NCTR $1,250 -0- $1,250
 Total $24,500 $40,500 $65,000

 

*Total includes $5 million for Bio-surveillance
** $3 million for Crisis/Incident Management

Requested resources would allow the FDA to invest in the protection of citizens by:

 

FERN: +$35,000,000

  • Enhancing the capabilities of state food testing so they are capable of handling pathogens associated with bioterrorism at a BL-2 level or higher,
  • Equipping additional state food chemistry labs with the instrumentation needed to rapidly screen foods for the array of toxic chemical of concern;
  • Integrating the Food Emergency Response Network (FERN) with the nations' food testing laboratories and complimenting CDC's Laboratory Response Network (LRN) to detect routine threat agents in food; FERN will strengthen both federal and state food testing capabilities and would be called upon to respond to a terrorist attack or national emergency involving the food supply;
  • Providing equipment, supplies, and training to promote security and  to enhance state capability to assist in FDA's Food Security activities;
  • Providing for laboratory testing to validate new methods and to provide for technology transfer and proficiency testing programs to standardize intra- and inter-agency laboratory performance; and,
  • Completing the expansion of available data and providing needed security and real-time communication features in eLEXNET, a food laboratory IT network for the real time sharing of information on a national basis; eLEXNET supports the FERN and can be interfaced appropriately with the public health IT systems.  FDA will expand, by 25 for a total of 104, the number of state health and agriculture laboratories and capabilities of current laboratories connected to the eLEXNET.   

 

Research: +$15,000,000

  • Investing in the following types of research, through an integrated program of intramural, extramural, and consortia-based initiatives, is needed to "shield" the food supply from terrorist threats:

-- Prevention Technologies - FDA studies food prevention technologies to improve the safety of food and establish guidelines and/or performance standards for industry.  Information is needed about new technologies and/or technology enhancements that can increase food safety and protect against potential exposure to non-traditional pathogens, toxins or chemicals during possible high threat situations;

-- New Methods - FDA fulfills its responsibility of ensuring the safety of the food supply through reliance on surveillance and monitoring methods.  New microbiological, chemical, and radiological methods must be developed, validated, and used to detect, enumerate and identify potential non-traditional agents that may threaten the food supply.  A particular emphasis is the need to develop biosensors and other technologies that could permit continuous monitoring of foods both during production and at import entry sites;

-- Agent Characteristics - Additional assessments of the abilities of non-traditional microbial pathogens to survive and grow in foods during processing and storage, or the stability and activity of chemical agents while present in foods, and the potential for their inactivation during food processing are essential to improving FDA's ability to detect, quantitate and control foodborne pathogens, toxins and chemicals that threaten the food supply; and,

-- Dose Response Relationships/ Threat Assessments - An understanding of the dosage amounts needed to inflict human disease or produce adverse reactions, where exposure occurs through consumption of different food matrices, is essential to accurately estimate the threat posed by such exposures.  In turn, knowledge of dose response helps determine methods development performance parameters (e.g., sensitivity, ruggedness, statistical confidence) that assure safety and security of the food supply; and,

 

Inspections:  +$7,000,000

  • Increase our capacity and capability to perform domestic and import operations such as sample collection and analysis, field examinations, and inspections across the foods program. This increased inspectional coverage of domestic firms and imported goods would reduce the risk of a contaminated product entering domestic commerce.

FDA is taking steps to implement a risk-based approach towards covering the importation of FDA-regulated goods.  These proactive steps will assist FDA in identifying patterns of transportation while goods are in international streams of commerce; will increase our ability to conduct effective, efficient foreign inspections; and will aid in making admissibility decisions before goods enter domestic commerce. 

FDA is supporting its enhanced import strategic plan by providing a greater import presence at our nation's borders.  Since 2001, FDA completed a more than six-fold increase in the number of food import examinations, rising from 12,000 food exams in 2001, to 79,000 food import exams in 2003.  Although some of this increase was due to redirecting resources during Operation Liberty Shield when the nation was at a heightened security alert, FDA will continue to maintain greater import presence at the borders.  The requested increase in FY 2005 will enable FDA to conduct 97,000 food import examinations.  Funds requested would also allow for an additional 750 food defense related domestic establishments inspections compared to the FY 2004 projected levels.

 

Biosurveillance Initiative: +$5,000,000

  • FDA requests $5 million as part of an interagency initiative to improve the Federal Government's capability to rapidly identify and characterize such an attack.  This interagency initiative will improve Federal surveillance capabilities in human health, food, agriculture, and environmental monitoring and establish an integration capability at the Department of Homeland Security (DHS), to rapidly compile these streams of data and integrate them with threat information.  In FDA, these funds will be used to coordinate existing food surveillance capabilities to establish the appropriate connectivity with the integration and analysis function at DHS. 

 

Incident Management Project:  +$3,000,000

  • With this request, FDA will continue to expand the capability for emergency preparedness and response related to any incident or emergency involving contamination of any FDA- regulated product.  This would include preparing for and responding to intentional acts of contamination and significant public health emergencies.  Currently, FDA has insufficient capacity to communicate in a secure environment with its headquarters and field staff, especially during emergency situations. The Emergency Operations Network Incident Management System Project will allow integrated access for all FDA offices to incident management, surveillance, and alert information.

 

Consequences of Not Achieving the Objective

The events of September 11, 2001, heightened the nation's awareness and placed a renewed focus on ensuring the protection of the nation's critical infrastructures.  A terrorist attack on the food supply could pose both severe public health and economic impacts, while damaging the public's confidence in the food we eat. 

Several food incidents since the fall of 2001 highlight the significance of FDA's food security activities.  In the fall of 2002, a competitor of a restaurateur in China added a chemical compound to his competitor's food and killed dozens of people and sent hundreds more to hospitals.  Also in the fall of 2002, three individuals were arrested in Jerusalem for allegedly planning to carry out a mass poisoning of patrons at a local café.  One of the arrested individuals worked as a chef at the café.  In January 2003, several individuals were arrested in Britain for plotting to add ricin to the food supply on a British military base. Each of these incidents demonstrates the potential for the nation's food supply to be used in an attack.

As a result of new threats to the food supply, FDA has made fundamental changes in how we implement our mission of protecting our food supply, so that all Americans can have confidence that their foods are not only safe but also secure.  In these efforts, the FDA and the USDA's FSIS will continue to work with the White House Homeland Security Council, DHS, and other federal agencies to further enhance our ability to detect, deter, and respond to an attack on our food supply. 

In FY 2005, FDA expects to expend $180,660,000 on Food Defense.    

BOVINE SPONGIFORM ENCEPHALOPATHY (BSE)

Desired Outcome

Safeguard food and feed supply by reducing the risks associated with a BSE outbreak and its spread through the U.S.

 

Program Objective 

To keep BSE out of the animal food and feed supply by ensuring a 100 percent compliance with the regulation through a trilateral approach focused on inspection presence, enforcement actions, and education. 

 

Why is FDA's Contribution so Important?

BSE belongs to a group of progressive degenerative neurological diseases known as transmissible spongiform encephalopathies (TSE).  TSE diseases are always fatal.

FDA is responsible for ensuring the safety of animal feeds that are used for food producing.  These feeds are consumed by animals that are later harvested for human foods, such as meat, poultry, milk, and eggs that are under regulatory jurisdiction of the USDA.  FDA and USDA are jointly responsible for the safety of the nation's food supply, and the two agencies closely collaborate on food safety issues. 

With the emergence of BSE in Great Britain and its aftermath, USDA and FDA developed a comprehensive plan to deal with the introduction of BSE into the U.S.  For its part, in 1997, FDA issued a regulation prohibiting the use of most animal proteins in ruminant feeds, and developed a regulatory strategy based on education, inspection presence, and enforcement action.  Since FY 2001, FDA and its state partners have inspected over 25,000 renderers, feed mills, and other firms, including on-farm mixers and ruminant feeders, to determine compliance with the BSE feed regulations.  Outreach activities including initial inspections, educational conferences, and working with industry and trade groups has helped to make industry aware of the requirements.  For firms that were out of compliance, FDA followed up with enforcement actions (in FY 2003, FDA issued 7 Warning Letters and 14 class II recalls at 12 firms). 

With the discovery of a holstein cow infected with BSE in Washington State in December 2003, the USDA decided to implement additional safeguards to protect the nation's food supply from further outbreaks.  In supporting these USDA safeguards, FDA announced that it would harmonize its activities to parallel USDA in protecting the safety of the food and feed supply.   

In January 2004, FDA announced several additional public health measures to further strengthen the current robust safeguards that help protect Americans from exposure to the agent that causes BSE and help prevent the spread of BSE in U.S. cattle.   These measures relate to both protections for foods intended for human consumption as well as additional measures to strengthen FDA's 1997 final rule regulating animal feed.   With respect to human foods, FDA announced that it will extend to FDA-regulated foods, dietary supplements and cosmetics, restrictions on using specified risk materials that would complement the recent USDA announcements.   Concerning animal feed, the Agency announced a series of measures designed to lower even further the risk that cattle will be purposefully or inadvertently fed "ruminant" proteins, including:

  • Eliminating an exemption in the feed rule that allows mammalian blood and blood products at slaughter to be fed to ruminants as a protein source;
  • Banning the use of "poultry litter" as a feed ingredient for cattle and other ruminants; prohibiting the use of "plate waste" as a feed ingredient for ruminants, including cattle;
  • Taking steps to further minimize the possibility of cross-contamination of animal feed via equipment, facilities or production lines; and,

FDA is increasing its inspections of feed mills and renderers in 2004.  These inspections would include 100 percent of all known renderers and feed mills that process products containing prohibited materials.

Requested Increases for FY 2005
(Dollars in $000)

Program Center Field Total
Animal Drugs and Feeds $1,350 $6,675 $8,025
Other Activities    $300 -0-    $300
Total $1,650 $6,675 $8,325

 

Additional funding of $8,325,000 in budget authority is requested for BSE activities. With this funding, FDA will:

  • Improve state and federal information on the inventory of animal feed firms and firms handling prohibited materials;
  • Increase funding of state BSE inspections, on-farm inspections, and BSE monitoring and control infrastructure grants so that the states can perform an additional 2,500 inspections, improve state and federal information on the inventory of animal feed firms and firms handling prohibited materials, and strengthen state infrastructure to monitor, and respond to potential feed contamination with prohibited materials;
  • Increase field BSE inspections, sample collections and analyses so that FDA can perform an additional 920 risk-based BSE inspections and an additional 600 targeted sample collections and analyses of both domestic and imported animal feed or feed components;
  • Augment field investigator training, state coordination, and industry outreach to expand investigational efforts to industry sectors, such as truckers, on-farm mixers and distressed or salvaged food;
  • Improve data quality and data management practices so that FDA can better monitor industry compliance and improve the usefulness of state data;
  • Conduct industry outreach to better inform industry of responsibilities and opportunities to prevent BSE from contaminating animal feed;
  • Evaluate the effectiveness of commercial tests to detect ruminant proteins in animal feeds, and initiate migration of current research methods, Polymerase Chain Reaction (PCR) methods into new technologies to allow for more rapid analyses of samples; and,
  • Analyze and audit BSE reported inspectional information which will determine where additional inspection and education is needed.

 

Consequences of Not Achieving the Goal

With the initial occurrence of BSE in Washington State, beef exports have plummeted and the lost revenue has been mounting.  The FDA Feed Regulation has been identified as an important tool in preventing the spread of BSE, and the control measures that have been instituted by USDA and FDA seeks to limit the exposure to the national food supply.  It may take several months of work to ensure that the incident has been contained and no further exposure is possible.  Further incidents of BSE would be harmful to the public, as well as the beef industry, undermining the public's confidence in the food supply and cause great economic impact to the nation.  

 

How are we doing? 

The main focus of FDA's BSE-prevention program has been regular inspections of all renderers and feed mills handling prohibited material in the U.S., more than 99 percent of which have achieved compliance with a 1997 FDA rule that prohibits the inclusion of most animal protein in feeds for cattle and other ruminants.

When FDA received notice of the recent emergency, it activated the BSE Response Plan which is managed by FDA's Emergency Operations Center (EOC), Office of Crisis Management.  The EOC is the single point of coordination for the FDA's response to all BSE emergencies by directing and monitoring all FDA response activities throughout the lifecycle of an emergency.  The EOC maintains contact with the Department of Health and Human Services Secretary's CommandCenter, CDC EOC, USDA/FSIS Office of Food Security and Emergency Preparedness, and other EOC's, as appropriate.

During the Washington State BSE emergency this past December, the EOC coordinated and reported all response activity and interagency communication.  After notification of the event, the EOC initiated a risk assessment and situation analysis with Agency experts to determine the scope of the emergency and the resources needed to address it.  The EOC then issued assignments to FDA's Office of Regulatory Affairs - Pacific Region to conduct the following activities: 

  • Inspecting all slaughter and rendering plants involved in the Washington incident (e.g., looking at records, clean out procedures);
  • Completing recall checks for USDA (these are audit checks where we insure the company got the notices, etc);
  • Determining the appropriate disposal of recalled material from BSE infected cow related to FDA regulated products; and,
  • Notifying all affected industries and state counterparts to keep them updated and informed.

The effectiveness of FDA's surveillance was most recently confirmed by the fact that all of the firms involved in the current BSE investigation were found to be in compliance with the FDA rule, and that the Agency, working with state and industry officials, was able to halt the distribution of all of the meat and bone meal from the sick cow.

The recent BSE finding has raised more prominently the threat of potential widespread contamination.  In the wake of this event, FDA has established a special BSE crisis center to respond to concerns from cattle ranchers, manufacturers, renderers and feed mills, as well as consumers.

In January 2004, HHS and FDA announced new science-based safeguards to bolster the other safeguards in place to protect American consumers from exposure to BSE. 

Specifically, HHS intends to ban from human food (including dietary supplements) and cosmetics a wide range of bovine-derived material so that the same safeguards that protect Americans from exposure to the agent of BSE through meat products regulated by USDA also apply to food products that FDA regulates.

FDA will also prohibit certain currently allowed feeding and manufacturing practices involving feed for cattle and other ruminant animals. These additional measures will further strengthen FDA's 1997 "animal feed" rule.

On January 26, 2004, Secretary Thompson stated that, "today's actions will make strong public health protections against BSE even stronger. Although the current animal feed rule provides a strong barrier against the further spread of BSE, we must never be satisfied with the status quo where the health and safety of our animals and our population is at stake. The science and our own experience and knowledge in this area are constantly evolving. Small as the risk may already be, this is the time to make sure the public is protected to the greatest extent possible."

To implement these new protections, FDA will publish two interim final rules that will take effect immediately upon publication, although there will be an opportunity for public comment after publication.

The first interim final rule will ban the following materials from FDA-regulated human food, (including dietary supplements) and cosmetics:

  • Any material from "downer" cattle. ("Downer" cattle are animals that cannot walk.);
  • Any material from "dead" cattle. ("Dead" cattle are cattle that die on the farm (i.e. before reaching the slaughter plant);
  • Specified Risk Materials (SRMs) that are known to harbor the highest concentrations of the infectious agent for BSE, such as the brain, skull, eyes, and spinal cord of cattle 30 months or older, and a portion of the small intestine and tonsils from all cattle, regardless of their age or health; and,

The product known as mechanically separated beef, a product which may contain SRMs. Meat obtained by Advanced Meat Recovery (an automated system for cutting meat from bones), may be used since USDA regulations do not allow the presence of SRMs in this product.

The second interim final rule is designed to lower even further the risk that cattle will be purposefully or inadvertently fed prohibited protein. It was the feeding of such protein to cattle that was the route of disease transmission that led to the BSE epidemic in United Kingdom cattle in the 1980's and 1990's.

This interim final rule will implement four specific changes in FDA's present animal feed rule. First, it will eliminate the present exemption in the feed rule that allows mammalian blood and blood products to be fed to other ruminants as a protein source. Recent scientific evidence suggests that blood can carry some infectivity for BSE.

Second, the rule will ban the use of "poultry litter" as a feed ingredient for ruminant animals. Poultry litter consists of bedding, spilled feed, feathers, and fecal matter that are collected from living quarters where poultry is raised. This material is then used in cattle feed in some areas of the country where cattle and large poultry raising operations are located near each other. Poultry feed may legally contain protein that is prohibited in ruminant feed, such as bovine meat and bone meal. The concern is that spillage of poultry feed in the chicken house occurs and that poultry feed (which may contain protein prohibited in ruminant feed) is then collected as part of the "poultry litter" and added to ruminant feed.

Third, the rule will ban the use of "plate waste" as a feed ingredient for ruminants. Plate waste consists of uneaten meat and other meat scraps that are currently collected from some large restaurant operations and rendered into meat and bone meal for animal feed. The use of "plate waste" confounds FDA's ability to analyze ruminant feeds for the presence of prohibited proteins, compromising the Agency's ability to fully enforce the animal feed rule.

Fourth, the rule will further minimize the possibility of cross-contamination of ruminant and non-ruminant animal feed by requiring equipment, facilities or production lines to be dedicated to non-ruminant animal feeds if they use protein that is prohibited in ruminant feed.

Currently, some equipment, facilities and production lines process or handle prohibited and non-prohibited materials and make both ruminant and non-ruminant feed -- a practice which could lead to cross-contamination.

To accompany these new measures designed to provide a further layer of protection against BSE, FDA will in 2004 step up its inspections of feed mills and renderers. FDA will itself conduct 2,800 inspections and will make its resources go even further by continuing to work with state agencies to fund 3,100 contract inspections of feed mill and renderers and other firms that handle animal feed and feed ingredients. Through partnerships with states, FDA will also receive data on 700 additional inspections, for a total of 3,800 state contract and partnership inspections in 2004 alone, including annual inspections of 100 percent of all known renderers and feed mills that process products containing materials prohibited in ruminant feed.

In FY 2005, FDA expects to expend $29,804,000 on BSE activities. 

MEDICAL DEVICE PREMARKET REVIEW PROGRAM

Desired Outcome

To reduce the cumulative review time that the Agency requires to approve 510(k) and traditional Pre-Market Approval Applications (PMA), while ensuring the safety of products approved for the market.

 

Program Objective

To achieve the Agency's FY 2005 Medical Device User Fee and Modernization Act (MDUFMA) performance goals for prompt review of safe and effective medical devices, so that patients can enjoy the benefits of safe and effective medical devices to diagnose, treat, and prevent disease.

The medical device review program supports the FDA strategic plan in the area of "Efficient Risk Management".  This goal is aimed at providing the most health protection at the least cost for the public by making the review process more efficient by using a third party review program. 

 

Why is FDA's Contribution so Important?

Sound, risk-based review processes are imperative to ensure that medical devices on the market are safe and effective.  Medical devices range from simple tongue depressors and bedpans to complex programmable pacemakers with micro-chip technology and laser surgical devices.  Because of the complexity of many medical devices premarket review through a 510(k) or PMA is required to market the product. 

A 510(k) is a premarketing submission made to FDA 90 days before a company proposes to begin marketing a new or modified device.  This submission is used to demonstrate that the device to be marketed is as safe and effective, and is substantially equivalent to a device that is currently legally marketed. 

The traditional PMA required for new Class III medical devices must be approved by FDA before the products can be marketed. Class III devices are those that support or sustain human life, are of substantial importance in preventing impairment of human health, or which present a potential, unreasonable risk of illness or injury. Premarket review entails the scientific and regulatory evaluation of the PMA to assure its safety and effectiveness

MDUFMA was authorized in FY 2002 to strengthen FDA's device review process.  The MDUFMA legislation provides user fees to supplement the appropriated portion of the medical device review program, and is a multi-year effort to improve the quality and timeliness of the medical device review process.  It authorizes the collection of user fees for the review of medical device applications from those who submit premarket applications, certain supplements to those applications, and premarket notifications. 

The implementation of MDUFMA makes available new revenue for completing more timely and complete device reviews, by reducing the cumulative approval time, reducing the number of review cycles, encouraging and supporting high quality applications, and providing a more efficient resolution of outstanding issues.  The viability of the MDUFMA program is essential for the success of the medical device review program.    

 

Requested Increases - Budget Authority

MDUFMA specifies a minimum amount of budget authority that must be provided each year in the Medical Device and Radiological Health line of FDA's appropriation.  That amount is $205,720,000, multiplied by an adjustment factor, based on the CPI/U. 

This legislation also requires that any appropriation shortfalls below the specified level in fiscal years 2003, 2004 and 2005 be made up, or the program will cease to operate on October 1, 2005.  With the current shortfalls, the total amount of budget authority necessary to meet the MDUFMA triggers is $56,881,000, which is a 30 percent increase over the FY 2004 enacted budget.   

However, FDA acknowledges that this is unrealistic, and is only requesting a $25,555,000 increase for medical device review, along with $2,284,000 in additional user fees for the Devices and Biologics Programs   This will allow the Agency to meet the minimum statutory appropriation level for FY 2005. 

Without this budget authority increase, our ability to continue to collect user fees would be jeopardized, as would the ability to hire over 400 additional FTE over the next five years to support the medical device review process, thus creating a significant public health setback.  This user fee and the staff positions it funds is critical to our ability to expedite medical device review times.

Requested Increases for FY 2005
Budget Authority 
(Dollars in $000)

Program Center Field Total
Devices and Radiological Health $24,549 $1,006 $25,555

 

The requested budget authority increase of $25,555,000 will allow FDA to:

  • Meet all of the performance goals specified in MDUFMA by FY 2008;
  • Enhance reviewer training and skill maintenance to enable FDA reviewers to understand and keep pace with device technologies that are rapidly developing and becoming more complex;
  • Invest in laboratory and infrastructure, as recommended by the FDA Science Board, to facilitate device review and oversight;
  • Enhance the IT systems that support the current premarket review process, facilitating device application review;
  • Employ research and science based activities that support the device product approval process;
  • Expand small business assistance to help ensure regulatory requirements are met, especially for first time applicants,
  • Recruit and contract with subject matter experts to develop guidance and standards for industry; and,
  • Conduct pre-approval inspections for device manufacturers.

 

Consequences of Not Achieving the Objective

Without the ability to collect fees, the FDA would lack resources needed to meet agreed upon performance goals from FY 2003 to FY 2007.  Failing to meet these goals would negatively impact public health by delaying improvements in the medical device review process and denying patients access to innovative new medical procedures and treatments.  The current request of $216,699,000 in conjunction with the MDUFMA user fees will allow FDA to meet the aggressive FY 2005 medical device review performance goals. 

 

How are we Doing?

The requested budget authority increase of $25,555,000 in conjunction with the MDUFMA user fee total of $33,938,000 plus any compensating adjustment for prior fiscal year revenue shortfalls pursuant to 21 U.S.C. 738j(c)3, will continue efforts begun in FY 2003 and FY 2004 for FDA to:

  • Acquire and train staff to work toward meeting an aggressive set of performance goals by FY 2008 to expedite the review of medical device applications, which were formally submitted by the Secretary to the Congress;
  • Promote public health with major improvements in the review of breakthrough medical technologies and improvements in review of expedited device submission; and;
  • Make major improvements in review performance in areas where fees are collected, while maintaining performance in other areas.

Specifically the FDA premarket device review performance goals include:

  • Complete Review and Decision on 70% of Expedited PMAs within 300 days;
  • Complete Review and Decision on 80% of 180 day PMA supplements within 180 days;
  • Complete Review and Decision on 75% of 510(k)s (Premarket Notifications) within 90 days; and,
  • Conduct 295 domestic and foreign BIMO inspections with an emphasis on scientific misconduct, data integrity, innovative products, and vulnerable populations.

In FY 2005, FDA anticipates it will expend $162,625,000 for all medical device review activities in the Agency, with $141,082,000 for medical device review in the Medical Device and Radiological Health Program.  A total of $216,699,000 is requested for the Medical Devices and Radiological Health Program for both premarket and postmarket activities. 

MEDICAL PRODUCT COUNTERMEASURES -- COUNTERTERRORISM

Desired Outcome

Ensure that U.S. citizens are protected from public health threats posed by terrorist attacks by enhancing the ability of the nation's health care system to effectively respond to counterterrorism and other public health challenges.

 

Program Objectives

FDA must have the capability to assess and effectively respond to risks associated with unexpected, and potentially widespread, terrorist-related health and safety threats to the U.S. public.  The unpredictability and wide variety of ways that acts of terrorism can be launched complicate preparedness and the Agency's ability to quickly and effectively respond to attacks.  The challenges for FDA are to facilitate development of medical countermeasures and to effectively safeguard products and to respond at any point in the product pipeline "from farm/production through distribution to use/consumption" in both import and domestic arenas.  

 

Why is FDA's Contribution so Important?  

With the coming implementation of Project BioShield, in which FDA has played a leading role, there is strong support for enhancing our ability to carry out these activities.  It is worth noting that our responsibilities here are different from those required under our prescription drug and device user fee programs to speed reviews. In addition, specialized products will be needed for certain populations, such as military personnel, first responders, or populations near nuclear facilities, as well as special groups such as pregnant women, and immuno-compromised individuals and children.

 

Requested Increases for FY 2005
(Dollars in $000)

Program Center Field Total
Human Drugs $2,850 $150 $3,000
Biologics $1,700 $300 $2,000
Total $4,550 $450 $5,000

 

FDA is requesting $5,000,000 for medical countermeasures.  To ensure preparedness in the event of war or catastrophic events, additional funds are needed to: 

  • Expedite the review of  medical countermeasure NDAs, generic, and OTC drug applications;
  • Conduct or continue studies for plague;
  • Continue an interagency agreement with CDC for clinical trials to collect human data on plague in African countries to label an antibiotic that would otherwise require an investigational new drug application (IND) for product deployment;
  • Conduct non-human primate studies for plague through an interagency agreement with the National Institute for Allergies and Infectious Diseases (NIAID);
  • Fund studies on animal models to determine lowest effective antibiotic dose to treat pneumonic plague and to review available data that may lead to product labeling change for plague indications;
  • Determine better dosing requirements for humans through animal model studies for radiation-related counter measures;
  • Increase drug review personnel with additional staff who have specific scientific expertise, such as in infectious diseases and radiation;
  • Increase staff levels with reviewers and scientists who can focus time on application review of potential counter measure products, product inspections, and emergency preparedness;
  • Employ risk management strategies, including: pre- and post-market adverse event surveillance; site visits; inspection and compliance activities; manufacturer's assistance; and, coordination and communication of public health information to both health care providers and the public; and,
  • Ensure an adequate availability of safe blood, blood products and tissues.

 

Consequences of Not Achieving the Objective

Without the additional funds, our ability to meet the Secretary's priority of responding to bioterrorism and other public health emergencies would be limited. The additional funding for our medical product centers to provide fast access to needed countermeasures is essential given the further ramp-up in this area, in bio-defense, and given the expected enactment of Project BioShield this year, which will require FDA to devote significantly more personnel to assist companies developing new countermeasures and to implement regulations to provide for "emergency use authorization" for countermeasures under development.

 

How are we Doing?

FDA is committed to achieving a state of readiness in addressing the terrorism threat to this nation.  Major accomplishments towards this objective include:

  • Engaged in activities to assess the risks and benefits of certain vaccinations under a variety of potential scenarios.  Systems are being improved to enable access to reports of adverse events associated with products.  This critical information enhances the review of products which could, potentially, be prescribed to substantial portions of the population in the event of an incident related to biological and chemical weapons.  An automated lot distribution database for licensed vaccines distributed in the U.S. is being implemented.  This database will help to determine the amount of vaccine and therapeutic product doses available in the event of an emergency; and,
  • Continued ongoing partnership with the CDC in the submission of "streamlined Investigational New Drug Applications (INDs)" for approved drugs requiring INDs for deployment from the Strategic National Stockpile in the event of a terrorist attack.

In FY 2005, FDA anticipates it will expend $57,620,000 in support of the medical product countermeasures.

CDER MOVE TO WHITE OAK

Desired Outcome

Consolidation of the FDA's headquarters, laboratories and offices, a decade's long effort by Agency officials, was made possible when Congress passed the FDA Revitalization Act (P.L. 101-635) on November 28, 1990.  In 1994, OMB approved a consolidation plan for laboratory, office and support space to be located in Montgomery County and Prince George's County, Maryland.  The new facilities for the FDACenter for Food Safety and Applied Nutrition was recently completed in College Park, Maryland.  This new facility is a government-owned building accommodating over 700 personnel with modern offices and state-of-the-art laboratory facilities and enables the Center to work closely with scientists nearby at the University of Maryland. 

 

Program Objective

The consolidation of the remaining FDA headquarters is occurring at the government-owned White Oak site in Montgomery County, Maryland.  The design and construction of the new buildings at White Oak is funded through General Services Administration (GSA) appropriations in the same manner as the College Park facility.  From FY 2000 through 2003, Congress appropriated a total of $183,800,000 to GSA for demolition, design and construction of laboratories (Phase I) and offices (Phase II) for the Center for Drug Evaluation and Research (CDER) and the Center for Devices and Radiological Health.

To occupy the new facilities presently under construction with funds that have been appropriated to GSA, FDA requires additional funding for relocation costs not covered by the design and construction budget.  These relocation costs include the cost for telecommunications, infrastructure design and installation, cabling and equipment, security infrastructure and equipment, office and conference room furnishings, relocation coordination and the actual move.  The majority of these funds are for modular furniture and other equipment to outfit and furnish the building.  Obtaining new systems furniture is critical to making the most effective use of the space available. 

In FY 2002, FDA received two-year funding of $4,000,000 to equip and occupy the Phase I laboratory for CDER.  These funds will partially support actual moving costs, information technology design and decommissioning costs and other associated expenses.  In FY 2004, FDA received $5,986,000 ($2,361,000 in Budget Authority and as directed FDA will use carryover funds for the remaining amount which totals $3,625,000) to equip and prepare to occupy the CDER office facility.  These funds will be used for telecommunication and data cabling requirements and other infrastructure costs.  These funds represent the second installment to relocate and consolidate most of CDER's headquarters activities in one location, resulting in more effective and efficient operations.  The building is expected to be completed in January 2005, with occupancy completed in April 2005. 

 

Why is FDA's Contribution so Important?

The $33,081,000 balance for the relocation is needed in FY 2005 in order for the second phase of the relocation of 1,700 CDER review staff to be completed.  These funds will be used for: relocation costs (furniture, records management consolidation, relocation coordination and moving); internal communication (equipment, cabling and audiovisual); security (infrastructure and equipment); information technology and telecommunications cabling; furniture associated with building occupancy; audiovisual equipment for training facilities; specialized library furnishings; and, equipment purchase and installation for the campus-wide security system.  This will also be used for the first phase of the Central Shared Use (CSU) facility for support of the overall campus development.

 

Requested Increases for FY 2005
(Dollars in $000)

Budget Authority $20,628
Move Costs (recurred from FY 2004)
$2,361
PDUFA Carryover Fees
$7,092
PDUFA User Fees
$3,000
Total
$33,081

 

Total resources for the CDER move to White Oak in FY 2005 is $33,081,000, including increases of $20,628,000 in new budget authority, $2,361,000 in recurring move costs from the FY 2004 enacted level, $3,000,000 from new PDUFA funds and $7,092,000 from PDUFA carryover balances from previous fiscal years that will be expended in the rent and rent-related line of the appropriation.

FDA must have up-to-date modern facilities to best perform its mission.  The White Oak consolidation will increase the efficiency and efficacy of FDA by ensuring that it has state-of-the-art laboratories and facilities that will enable FDA to better respond to the Nation's drug review, approval and supply needs.  In addition, FDA's work environment should encourage efficiency, creativity and superior performance, an environment that attracts and retains top quality scientists and enables them to do top-quality work as part of an effective team.  This is even more critical as we face new challenges in protecting the food supply and terrorist actions that threaten public safety.  The remaining centers and offices to be co-located at White Oak are planned for occupancy from 2006 through 2009.  GSA's budget includes funding in 2005 for the next phase of construction.

 

Improving Management:

One of the first priorities of the President's Management Agenda is to make government citizen-centered.  The White Oak consolidation will do just that by providing a readily identifiable location for citizens to interact with FDA.  In addition, consolidation will allow FDA to standardize and modernize document handling, use shared facilities such as libraries and conference areas, reduce redundancies in a wide range of administrative management tasks, and allow conversion to a single computer network.  This will create a strong FDA by reducing operating costs, reducing travel time between organizations and increasing the convenience of access to FDA by the public.

 

Energy Savings

As part of the construction of the White Oak facility, in October 2002 GSA awarded a 20-year, $98,000,000 energy-services contract to Sempra Energy Solutions to construct a central utility plant that will utilize energy-saving cogeneration technology to provide electricity, heat and air conditioning.  Sempra Energy Solutions is financing the plant and recovering its costs through an energy-savings performance contract.  The Federal Government can lead the nation in energy efficient building design, construction and operation and can foster energy efficiency, water conservation, and the use of renewable energy products.  FDA will be able to realize substantial annual operating savings and benefits from this energy-saving program and maintain a safe and healthful work environment for both its employees and the community. 

 

Consequences of Not Receiving the Resources to Complete the Move 

It is imperative to continue moving to White Oak, especially this Phase which is presently under construction for occupancy by CDER.  If FDA does not receive the resources to complete this move, the Agency will not be able to prepare the space for occupancy and could potentially delay the relocation to the new space.  This delay may extend the time that the Agency would be required to pay rent at its existing locations while also paying rent at the new building which will greatly impact the GSA Rent appropriation.

 

How Are We Doing?

The current status of the White Oak consolidation plan estimates over 7,000 staff will be housed in 2.3 million square feet of space.  By 2005 the campus will have almost 700,000 sq. ft. completed with 1,800 staff on-site.  The first laboratory building on the campus was dedicated on December 11, 2003.

CURRENT LAW USER FEES

 

User Fee Overview

Current user fee increases total $40,385,000.  This includes $34,569,000 for Prescription Drug User Fee Act (PDUFA) fees, $2,284,000 for Medical Device User Fee Modernization Act (MDUFMA) fees, $3,000,000 for the recently enacted Animal Drug (ADUFA) user fees, $343,000 for Mammography Quality Standards Act (MQSA), $45,000 for Drugs/Devices Export Certification, and $144,000 for Color Certification Fund fees.  In FY 2005, MDUFMA, PDUFA, and ADUFA user fees provide a combined increase of 126 FTE to expedite reviews and meet performance goals over the next few years.

The user fees FDA collects support the following FDA strategic goals:

  • Reduce suffering and enhance public health by providing quicker access to important lifesaving, safe, and effective drugs and devices; and,
  • Prevent unnecessary injury and death caused by adverse drug reactions, injuries, medication errors, and product problems.

 

Requested User Fee Increases for FY 2005
(Dollars in $000)

Program Center Field Total
PDUFA
Total
$37,763 ($3,194)    $ 34,569
MDUFMA
Total
$2,221 $63 $2,284
ADUFA
Total
$3,000 $0 $3,000
MQSA
Total
$109 $234 $343
Export Cert.
Color Cert.
Total
$45
$144
$189
$0
$0
$0
$45
$144
$189
Total $43,282 ($2,897)         $40,385

 

PDUFA:  + $34,569,000

PDUFA authorized the FDA to collect fees from the pharmaceutical industry to augment appropriations spent on drug review.  These additional resources were to be used to hire and support additional staff for the review of human drugs so that safe and effective drug products reach the American public more quickly. 

The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 reauthorized the collection of user fees to enhance the review process of new human drugs and biological products and established fees for applications, establishments, and approved products.  The PDUFA amendments are effective for five years and direct FDA to strengthen and improve the review and monitoring of drug safety; consider greater interaction with sponsors during the review of drugs and biologics intended to treat serious diseases and life-threatening diseases; and develop principles for improving first-cycle reviews.  Review performance monitoring is being done in terms of fiscal year cohorts, e.g., the FY 2004 cohort includes applications received from October 1, 2003 through September 30, 2004. 

Based on current information and existing PDUFA formulas, in FY 2005, a $34,569,000 increase over the FY 2004 current estimate is requested, for a total of $284,394,000 to support this program.  This accommodates both inflation and workload adjustment provisions of PDUFA to be able to operate in FY 2005.  Of this amount, $3,000,000 will support the CDER move to the White Oak facility.  In addition, $7,092,000 of PDUFA carryover funds from prior fiscal years will be used to support the move.

 

FY 2004 and FY 2005 PDUFA III Triggers

PDUFA III contains three legal conditions or "triggers" that must be satisfied each fiscal year before FDA can collect and expend user fees:

  1. FDA's overall Salaries and Expenses Appropriation (excluding user fees) must meet or exceed FDA's overall FY 1997 Salaries and Expenses Appropriation (excluding user fees and adjusted for inflation).  This is considered the minimum statutory requirement.  FDA anticipates meeting this trigger in FY 2004 and FY 2005;
  2. The amount of user fees collected each year must be specifically included in Appropriation Acts.  FDA anticipates meeting this trigger in FY 2004 and FY 2005; and,
  3. The third condition is that user fees may be collected and used only in years when FDA also spends a specified minimum amount of appropriated budget authority for the review of drugs.  Since this trigger is based on FDA's spending for the year, it can only be known with confidence at the end of each fiscal year.  FDA has satisfied this requirement each year that user fees have been collected.

The table below illustrates the amounts that apply in FY 2004 and FY 2005.

 

PDUFA Trigger Governing Spending
from Appropriated Budget Authority
(Dollars in $000)

  FY 2004 FY 2005 (est.)
FY 1997 Spending from Appropriations $147,960 $147,960
Applicable Inflation Adjustment Factor 1/ 1.14732 1.18174
Estimated Minimum Spending from Appropriations $169,756 $174,850
1/ As specified in PDUFA, the adjustment factor for FY 2004 is the Consumer Price Index for all urban consumers, U.S. city average (CPI/U) for April of FY 2003 (183.8) divided by the CPI/U for April of 1997 (160.2).  The adjustment factor for FY 2005 assumes a 3% increase in the CPI/U between April of 2004 and April of 2005.  This number cannot be calculated accurately until mid-May of FY 2005, when the Bureau of labor Statistics releases the April 2004 CPI/U figures.

Since this trigger is based on FDA's spending for the year, it can only be known with confidence after the end of the fiscal year.  However, for estimating purposes, if the appropriation made for FDA's drug review activities, exclusive of user fees and earmarks for program activities that are not part of the drug review process as defined in PDUFA, goes up by less than the estimated change in the CPI/U for the year, it will be difficult for FDA to meet this trigger as specified in legislation and the accompanying report.

 

Requested PDUFA Increase for FY 2005
(Dollars in $000)

Program Center Field Total

PDUFA   

     
Human Drugs
$26,808
($4,060)
$22,748
Biologics
$1,304
$866 
$2,170
Other Activities
$2,890
$0 
$2,890
Rent and Rent Related Act
$3,000 
$0 
$3,000
GSA Rent
$3,761
 
$3,761
Total
$37,763
($3,194)
$ 34,569

 

MDUFMA:  + $2,284,000

Many aspects of the Medical Device User Fee and Modernization Act (MDUFMA) of 2002 are patterned after the successful Prescription Drug User Fee Act (PDUFA) that has enabled FDA to add over 1,000 employees to the drug review process over the last decade.

MDUFMA is a multi-year effort to improve the quality and timeliness of the medical device review process.  It authorizes the collection of user fees for the review of medical device applications from those who submit premarket applications, certain supplements to those applications, and premarket notifications. 

The implementation of MDUFMA makes available new revenue for completing more timely and complete device reviews, by reducing the cumulative approval time, reducing the number of review cycles, encouraging and supporting high quality applications, and providing a more efficient resolution of outstanding issues. 

The viability of the MDUFMA program is essential for the success of the medical device review program.  In FY 2005, a $2,284,000 user fee increase over the FY 2004 current estimate is requested, for a total of $33,938,000 in user fees to support the Medical Device Review program.  This accommodates both inflation and workload adjustment provisions.

FY 2004 and FY 2005 MDUFMA Triggers MDUFMA also contains three legal conditions or "triggers" that must be satisfied each year before FDA can collect and spend user fees: 

  1. Salary and Expenses appropriations for FDA for Medical Devices and Radiological Health Program must be at least $205,720,000, multiplied by the adjustment factor.  If less than this amount is appropriated in FY 2003-2005, then the shortfall must be made up by FY 2006.  If less than the cumulative trigger amounts are appropriated by FY 2006, the program authority ceases to operate, the performance goals are suspended, and FDA may no longer collect and spend MDUFMA fees.

MDUFMA Trigger Governing
Appropriated Budget Authority
(Dollars in $000)

  FY 2004 FY 2005 (est.)
Baseline Amount $205,720 $205,720
Applicable Inflation Adjustment Factor2 1.02225 1.05292
Estimated Minimum Device and
Radiological Products Appropriations
$210,297 $216,607
  1. 2/ As specified in MDUFMA, the adjustment factor for FY 2004 is the Consumer Price Index for all urban consumers, U.S. city average (CPI/U) for April of FY 2003 (183.8) divided by the CPI/U for April of 2002 (179.8).  The adjustment factor for FY 2005 assumes a 3% increase in the CPI/U between April of 2004 and April of 2005.  This number cannot be calculated accurately until mid-May of FY 2005, when the Bureau of labor Statistics releases the April 2004 CPI/U figures.
  2. The amount of user fees collected each year must be specifically included in Appropriation Acts.  FDA anticipates meeting this trigger in FY 2004 and FY 2005.  This is identical to the second requirement for PDUFA.
  3. The third condition is that user fees may be collected and used only in years when FDA also spends a specified minimum amount of appropriated budget authority for the review of medical devices.  Since this trigger is based on FDA's spending for the year, it can only be known with confidence at the end of each fiscal year.  FDA has satisfied this requirement each year that user fees have been collected.

FDA conducted studies to determine how much is spent on the process for the review of medical device applications.  This amount has been reported in the first MDUFMA Financial Report that is due to Congress in January of 2004.

Since this trigger is based on FDA's spending for the year, it can only be known with confidence after the end of the fiscal year.  However, for estimating purposes, if the appropriation made for FDA's device and radiological products activities goes up by less than the estimated change in the CPI/U for the year, it will be difficult for FDA to meet this trigger as specified in legislation and the accompanying report.

 

Requested MDUFMA Increase for FY 2005
(Dollars in $000)

Program Center Field Total
MDUFMA       
Biologics
$528
$22
$550
Devices
$1,196
$41
$1,237
Other Activities
$273
$0
$273
Rent and Related Act
$46
$0
$46
GSA Rent
$178
$0
$178
Total
$2,221
$63
$2,284

 

ADUFA:  + $3,000,000

The availability of safe and effective animal drugs allows food animal producers to maintain healthy animals with the assurance that resulting food products will be safe, wholesome, and free of harmful drug residue.  Ingestion of animal drug residues in food products could potentially cause unsafe conditions for humans, ranging from drug allergies to cancer.  The availability of safe and effective drugs also ensures companion, service animals that assist the disabled, and other animals such as zoo animals will live healthier and longer lives. 

The Animal Drug User Fee Program will help provide a cost-efficient, high quality animal drug review process that is predictable and performance driven.  The program requires new animal drug applicants, sponsors, and manufacturers to incur a fee to expedite their respective applications.  This program has strong industry support and provides a complementary set of incentives to all interested parties - industry, consumers, Congress, and FDA. 

ADUFA is modeled after the Prescription Drug User Fee Act (PDUFA), a successful example of a partnership between the Federal government and stakeholders to improve and expedite the review of applications.  ADUFA was enacted on November 18, 2003 (P.L. 108-130).

In FY 2005 a $3,000,000 user fee increase over the FY 2004 current estimate is requested, for a total of $8,000,000 to support the Animal Drug Review Program. 

 

FY 2004 and FY 2005 ADUFA Triggers

Many aspects of ADUFA are patterned after PDUFA.  ADUFA also contains three legal conditions or "triggers" that must be satisfied each fiscal year before FDA can collect and spend user fees:

  1. FDA's overall Salaries and Expenses Appropriation (excluding user fees) must meet or exceed FDA's overall FY 2003 Salaries and Expenses Appropriation (excluding user fees and adjusted for inflation).  FDA anticipates meeting this trigger in FY 2004 and FY 2005.
  2. The amount of user fees collected each year must be specifically included in Appropriation Acts each year.  FDA anticipates meeting this trigger in FY 2005.
  3. The third condition is that user fees may be collected and used only in years when FDA also spends a specified minimum amount of appropriated budget authority for the review of animal drugs.  Since this trigger is based on FDA's spending for the year, it can only be known with confidence at the end of each fiscal year.  FDA has satisfied this requirement each year that user fees have been collected.

FDA will have to calculate the exact amount spent on the newly defined process for the review of animal drug applications in FY 2003.  That amount will be reported in the first ADUFA Financial Report that is due to Congress in January of 2005.

 

Requested ADUFA Increase for FY 2005
(Dollars in $000)

Program Center Field Total
ADUFA      
Center
$2,644
$0
$2,644
Other Activities
$235
$0
$235
GSA Rent
$121
$0
$121
Total
$3,000
$0
$3,000

 

MQSA:  + $343,000

Breast cancer is the most commonly diagnosed cancer and the second leading cause of cancer deaths among American women.  Experts estimate that one in eight American women will contract breast cancer during their lifetime.  The Mammography Quality Standards Act (MQSA) was signed into law in 1992 to address the public health need for safe and reliable mammography. 

The Act required that mammography facilities be certified by October 1994, to be able to remain in operation, and inspected annually to ensure compliance with national quality and safety standards.  The MQSA Program certifies mammography facilities and performs annual inspections to ensure that women have access to safe and effective mammography services.  MQSA was not reauthorized by the 107th Congress because of concerns about the need to improve the skills of physicians reading mammograms and the need for interpretive skills assessment to be added to existing MQSA continuing medical education requirements.  The FDA has been working with congressional staff to address these concerns and reauthorization of MQSA is expected in the current congressional session.

The fees collected pay for the costs of the annual inspections to ensure compliance with national quality standards.  The increase of $343,000 will cover inflation.  This program supports FDA's strategic goal of reducing the risk of medical devices and radiation emitting products on the market by assuring product quality and correcting problems associated with their production and use.

 

Requested MQSA Increase for FY 2005
(Dollars in $000)

Program Center Field Total
MQSA      
Medical Devices $105 $234 $339
Other Activities $4 $0 $4
Total $109 $234 $343

 

 

Export Certification (Drugs/Devices): + $45,000

FDA is required to issue certificates to any person wishing to export a drug, animal drug, or device, that the product to be exported meets certain requirements of the law.  This applies to products approved for sale in the U.S. as well as to unapproved products.  The purpose of these certificates is to promote the export of products made in the U.S.  The increase of $45,000 will cover the program's inflationary costs.

 

 

Color Certification:   + $144,000

The Federal Food, Drug and Cosmetic Act (FFD&C) requires the certification of color additives.  This function, which is administered by FDA's Center for Food Safety and Applied Nutrition, involves assessing the quality and safety of color additives used in foods, drugs and cosmetics.  Employee salaries and expenses are funded directly by FDA's Revolving Fund for Certification and Other Services which is financed entirely by fees paid by commercial organizations.  The FY 2005 increase of $144,000 will cover the programs inflationary costs.

 

Requested Certification Increases for FY 2005
(Dollars in $000)

Program Center Field Total

Export Cert.

Color Cert.

Total

$45

$144

$189

$0

$0

$0

$45

$144

$189

 

ADMINISTRATIVE EFFICIENCIES
AND BUILDINGS AND FACILITIES

Desired Outcome

Implement the President's Management Agenda by improving FDA operations and redirecting management savings.

 

Program Objective

FDA supports the President's Management Agenda and Secretarial Goal of "One-HHS" through the planning for the White Oak consolidation, conducting competitive outsourcing activities; and, implementing a "shared services" organization for certain administrative functions, including facilities, procurement, finance, EEO, and IT services.  The Agency is also executing an information technology consolidation plan, designing a new financial management system, as part of the DHHS' Unified Financial Management System. 

Continuing FY 2004 efforts to streamline the organization through organizational delayering, competitive outsourcing, and consolidation at the DHHS and Agency level, FDA anticipates further administrative efficiencies in FY 2005.  In FY 2004, with the implementation of the Shared Services Organization, FDA received some administrative savings achieved through management efficiencies, cost-effective service delivery, and reimbursable fees agreements. 

 

Standing-up the Shared Services Organization (SSO)

In FY 2004, the new SSO became operational and the financial infrastructure and servicing agreements were addressed.  The SSO will be funded via an allocation from each of FDA's programs.  The following table identifies each program's estimated costs for FY 2004.

 

Shared Services Organization
Estimated Program Costs* FY 2004
(Dollars in $000)

Program

Dollars FTE
Foods 3,668 37
Human Drugs 7,365 73
Biologics 2,755 29
Animal Drugs & Feeds 1,085 10
Medical Devices &  Radiological Health 5,049 52
NationalCenter for Toxicological Research 282 3
Field Activities (HQ Only) 2,544 24
Other Activities 15,153 158
Total 37,901 386

 

*Field costs are under development.

 

Requested Changes for FY 2005
(Dollars in $000)

Item Dollars
Administrative Efficiencies ($23,122)
Buildings and Facilities ($6,959)
Total ($30,081)

 

 

Administrative Efficiencies: ($23,122,000)

This represents ($23,122,000) in savings achieved through the seven and half percent reduction in administrative staff in FY 2005.  When combined with the FY 2004 reduction, administrative overhead will be reduced by fifteen percent by the end of FY 2005.  

Management savings will contribute to an environment in which the FDA functions effectively as a single agency that consistently supports top-quality work by all of its employees.

The challenges facing FDA cannot be confronted without adequate resources in the right places. The decline of available personnel dictates a more thoughtful allocation process.  By rightsizing methodically over several years, the Agency is thinking critically and carefully about how it uses its resources to improve the public health.  Innovation and change is the norm in the American health care system, and programs must be designed with the future in mind.

 

Buildings and Facilities:  ($6,959,000)

This budget requests no new funding for construction or for building improvements or repairs.  In an effort to fund other higher priority initiatives, funding for the buildings and facilities account had been eliminated for FY 2005. To the extent possible, essential maintenance will be conducted with existing carryover funding from this account.

 

Why is FDA's Contribution So Important?

The efficiencies derived from improving FDA's administrative services through the President's Management Agenda and the Secretarial priorities have resulted in savings that can be redirected to higher priority projects. The savings will provide the means for FDA to proceed with its transition to the newly constructed headquarters laboratory serving the Human Drugs Program. 

 

Proposed Outcome from Management Savings

By fully embracing the President's Management Agenda and the Secretarial priorities, FDA has made the changes necessary to delayer its organizational structure, to perform competitive sourcing reviews, to modernize its financial management system, and to consolidate its information technology infrastructure.  Efficiencies derived from improved administrative services have resulted in savings that can be redirected to higher priority projects. 

 

How are we doing?

FDA has made considerable progress in the development of a more streamlined and efficient organization through delayering, competitive sourcing, and consolidation.  Off-sets included in this budget can be redirected to support other Agency priorities as we build upon management improvements.

 

<< Return to FY 2005 Budget Proposal