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From: The eUpdate, 2.28.2012

FDA User Fees Face Pushback

Administration seeks revenue to cover $253 million in 2013 budget

The Obama administration is asking for an additional $253 million in the FDA’s 2013 budget for the Transforming Food Safety Initiative, which is designed to help the agency implement the Food Safety Modernization Act. About 98% of the funding comes from user fees—a mechanism that has encountered strong opposition from industry recently.

The user fee payment mechanism was in the original FSMA legislation but didn’t make it into the version of the bill that won final Congressional passage.

At the end of January, a coalition of more than 30 food industry groups wrote to the administration, urging them to request more congressional funding for food safety efforts rather than relying on user fees. "As consumers continue to cope with a period of prolonged economic turbulence and food makers struggle with record high commodity prices, the creation of new food taxes or regulatory fees would mean higher costs for food makers and lead to higher food prices for consumers," the letter declared.

The user fees aren’t especially onerous, according to a leading food safety expert and former FDA official, but the administration may not have the authority to implement them.

“It translates to $500 per registered firm, which isn’t that big a deal, particularly since if you’re making less than half a million dollars a year, you’re exempt from most of the preventive control requirements anyway,” said David Acheson, MD, former assistant commissioner for food protection at the FDA and now the head of the food and import safety practice with Leavitt Partners. “And, overall, the preventive controls in FSMA will help industry, because eventually they will remove bad actors who are doing widespread commodity damage when things go wrong. But the industry philosophically objects to paying these fees.”

The outcome of the user fees battle may hinge on the results of the next election, Dr. Acheson said. The user fee payment mechanism was in the original FSMA legislation but didn’t make it into the version of the bill that won final Congressional passage. “At this point, the FDA doesn’t have the authority to collect registration fees from food firms,” he observed. “The President’s budget assumes that Congress will grant the FDA the authority to do so, and that’s not without precedent. But I don’t know if Congress would grant that authority this side of an election year.”

Dr. Acheson predicted that it’s more likely than not that the FDA’s final 2013 budget will more or less flatline. “I’d say the administration has gone out with a credible request for increased funding, but politically I think it’s unrealistic. My guess is they won’t get their money.”

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