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U.S. Department of Health and Human Services

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Reinspection User Fee

<< Return to FY 2007 Budget Summary

 

+$22,000,000 (Mandatory User Fee)

 

Why is this initiative necessary?

FDA proposes a new mandatory user fee that requires establishments that FDA inspects to pay the full costs of reinspections and associated follow-up work when FDA reinspects facilities due to failure to meet Good Manufacturing Practices (GMPs) or other important FDA requirements.  FDA currently funds this activity through discretionary appropriations. 

When FDA identifies violations during an inspection or issues a warning letter, FDA conducts follow-up inspections to verify a firm's corrective action.  Agency procedures usually require that the agency conduct a follow-up inspection of the firm within 90 days of issuing a warning letter.  The proposed initiative ensures that facilities that fail to comply with health and safety standards bear the cost of reinspection. 

Reclassification of Resources from Discretionary Budget Authority to Mandatory User Fees - Reinspection User Fees
Description FY 2005 FY 2006 FY 2007 Discretionary FY 2007
Mandatory User Fee
  Est. Est. $ $
Field     -12,300,000 +12,300,000
Other Activities     -7,100,000 +7,100,000
GSA Rent and Other Rent-Related Activities     -2,600,000 +2,600,000
Total 0 0 -22,000,000 +22,000,000

 

 

How does this initiative support Executive Branch public health priorities?

FDA protects 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.  FDA conducts inspections and evaluates laboratory analyses to ensure that FDA products comply with the laws and regulations that the FDA enforces.

This initiative enhances public health by providing mandatory user fee resources for reinspections to determine if previously identified out-of-compliance firms have returned to compliance and to establish if the agency needs to take further Agency regulatory action.  

 

What are the risks of not proceeding with the initiative?

If facilities that fail to comply with FDA regulations do not bear the cost of reinspections, FDA must shift resources from other high-priority program activities to conduct reinspections.  Examples of these priority public health activities include drug safety efforts and efforts to protect the nation's food supply from potential terrorist acts.

While it is good business practice for firms to ensure the safety of products before they reach consumers, the Food, Drug, and Cosmetic Act, and FDA enforcement inspections requires the safety of products before they reach consumers.  This initiative provides an additional incentive for facilities to remain in compliance with regulations. 

 

What activities will these funds support?

Costs recovered from industry to fully fund the reinspection user fee program include:

  • $12.3 million for 102 field inspectors.
  • $7.1 million for indirect and support costs (e.g., legal, science review, IT).
  • $2.6 million for GSA Rent and Rent Related costs.

FDA's Office of Regulatory Affairs (ORA) conducts postmarket inspections of foods, human drugs, biologics, animal drugs and feeds, and medical device manufacturers to assess their compliance with Good Manufacturing Practice requirements.  ORA conducts these inspections of domestic and foreign facilities.  Revenue from the user fee would reimburse FDA for costs associated with the 118 FTE and related expenses required to reinspect firms that fail to comply with FDA regulations designed to protect the public from unsafe products. 

 

What results will FDA achieve?

FDA estimates that the user fee revenue will fund approximately 1,270 reinspections in FY 2007. 

 

<< Return to FY 2007 Budget Summary