The Prescription Drug User Fee Amendments of 2007 require the Food and Drug Administration (FDA or the agency) to report annually on the financial aspects of its implementation of the Prescription Drug User Fee Act (PDUFA), as amended. This report covers fiscal year (FY) 2009.
PDUFA specifies that the following three conditions must be satisfied each year in order for FDA to collect and spend PDUFA fees:
- FDA’s overall Salaries and Expenses Appropriation, excluding fees, must exceed FDA’s overall FY 1997 salaries and expenses appropriation, excluding fees and adjusted for inflation.
- Fee revenues collected must be specified in Appropriation Acts.
- FDA must spend at least as much from appropriated funds for the review of human drug applications as it spent in FY 1997, adjusted for inflation, within certain tolerances.
This report describes how FDA met those specific statutory conditions during FY 2009. The statements and tables included in this report also provide the user fee revenues and expenditures in FY 2009, the carryover balance, and comparative data for earlier periods.
In FY 2009, FDA collected $519 million in fees, including fees collected for earlier periods. This is slightly more than the $511 million FDA projected at the beginning of the year when fees for FY 2009 were established. The higher revenue is attributable to the receipt of additional FY 2008 product fees and establishment fees in the first quarter of FY 2009.
In FY 2009, FDA obligated $512 million from PDUFA fee revenues. This accounted for about 60 percent of all funds obligated by FDA from all sources in support of the process for the review of human drug applications. This $512 million was about $7 million less than net collections for the year, increasing the balance of funds collected and appropriated in previous years, and still available for obligation, to $172 million at the end of FY 2009. Of this $172 million, there are commitments for all but about $34 million. About 60 percent of funds obligated from all sources were for employee salaries and benefits, and the balance was for costs necessary to support and maintain those employees.
Challenges facing FDA in FY 2010 include meeting expanded post-market safety responsibilities and regulating industry operations that are increasingly expanding to more distant, foreign-based clinical trials and manufacturing. The rapidly expanding information technology and information management environment and its security requirements are also placing increasing demands on this program. And in FY 2010, FDA will need to start activities required to initiate the process of the next reauthorization of PDUFA. PDUFA funding is essential to FDA’s ability to operate its human drug review program and to respond to these challenges.