FDA Overview

The Food and Drug Administration (FDA) regulates the safety of foods (including dietary supplements), cosmetics, and radiation-emitting products; the safety and effectiveness of drugs, biologics (e.g., vaccines), and medical devices; and public health aspects of tobacco products.¹ Although FDA has been a part of the Department of Health and Human Services (HHS) since 1940, the Committees on Appropriations do not consider FDA with most of the rest of HHS under their Subcommittees on Labor, Health and Human Services, and Education, and Related Agencies. Jurisdiction over FDA's budget remains with the Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies, reflecting FDA's beginnings as part of the Department of Agriculture.

FDA's organization consists of various offices and centers that carry out the agency's regulatory responsibilities. The Office of the Commissioner and four other program area offices oversee the core functions of the agency: the Office of Medical Products and Tobacco, the Office of Foods and Veterinary Medicine, the Office of Global Regulatory Operations and Policy, and the Office of Operations. The Office of Medical Products and Tobacco includes the Center for Biologics Evaluation and Research (CBER), the Center for Devices and Radiological Health (CDRH), the Center for Drug Evaluation and Research (CDER), and the Center for Tobacco Products (CTP). The Office of Foods and Veterinary Medicine includes the Center for Food Safety and Applied Nutrition (CFSAN) and the Center for Veterinary Medicine (CVM). The National Center for Toxicological Research (NCTR) is housed within the Office of the Commissioner.²

The agency's budget—as presented in the Justifications of Estimates for Appropriations Committees (referred to as Congressional Justifications, or CJs) and the materials of the Committees on Appropriations—is organized by program area. Consistent with these budget documents, Table 1 displays funding for FY2017 through FY2022, as well as the FDA's FY2023 request, by program area (e.g., Foods, Human Drugs), which includes funding for the responsible FDA center (e.g., CFSAN, CDER) and the portion of funding for the FDA-wide Office of Regulatory Affairs (ORA) that is committed to that program area.³

Funding Sources

FDA's total program level, the amount that FDA can spend, is composed of discretionary appropriations from two different sources. First, FDA is appropriated funding out of the Treasury's General Fund. (This is the usual source of funding for discretionary appropriations, and, in keeping with the conventions used in FDA budget documents, is referred to in this report as budget authority.)⁴ Second, FDA also is allowed to collect and obligate user fees.⁵ FDA's annual appropriation sets both the amount of budget authority and the amount of user fees that the agency is authorized to collect and obligate for that fiscal year. The budget authority appropriations are largely for the Salaries and Expenses account, with a smaller amount for the Buildings and Facilities account, which is used for any changes to or purchase of fixed equipment and facilities used by FDA.⁶ The appropriations of the several different user fees contribute only to the Salaries and Expenses account.

For each of the FDA user fee programs, the authorizing legislation establishes the legal framework that governs the fees, while the annual appropriations acts provide FDA the authority to collect and expend them. The largest and oldest FDA user fee that is linked to a specific program was first authorized by the Prescription Drug User Fee Act (PDUFA; P.L. 102-571) in 1992. PDUFA sets the total amount of user fee revenue for the first year, provides a formula for annual adjustments, and includes limiting conditions to ensure that user fees supplement congressional appropriations (i.e., General Fund appropriations) rather than replace them. After PDUFA, Congress added other user fee authorities, for example, regarding medical devices, animal drugs, generic drugs, tobacco products, and other FDA-regulated products and activities. Generally, the medical product user fees have been authorized in legislation on a five-year cycle.⁷ Each five-year authorization sets a total amount of fee revenue for the first year and provides a formula for annual adjustments to that total based on inflation and other adjustments. In contrast, the nonmedical product user fee programs do not require reauthorization and are generally indefinite. Table A-1 presents the list of user fees that contribute to FDA's budget, sorted by the dollar amount they contribute to the agency's FY2022 budget. The table also includes the authorizing legislation for each current user fee, specifies whether the user fee program requires reauthorization, and provides the most recent reauthorization, if applicable.

The 21^st Century Cures Act (Cures Act; P.L. 114-255), signed into law in December 2016, made several changes to the drug and device approval pathways at FDA to support innovation and accelerate development and review of certain medical products (e.g., combination products, antimicrobials, drugs for rare disease, and regenerative therapies). To fund these activities, the Cures Act established an FDA Innovation Account to which a total of $500 million is authorized to be transferred over a nine-year period (FY2017-FY2025).⁸ The law specified that amounts in the account are not available until appropriated in subsequent appropriations acts and that once made available, these amounts are available until expended. The amounts subsequently appropriated (i.e., the budget authority and the resulting outlays) for FY2017 through FY2025, up to the amounts transferred, are to be subtracted from any cost estimates provided for purposes of budget controls. Effectively, the appropriations from the account will not be counted against any spending limits, such as the statutory discretionary spending limits; that is, the amounts appropriated from the account will be considered outside those limits for FY2017 through FY2025.

In general, this report focuses on funding provided as part of the regular appropriations process. As such, this report does not include in the total amounts emergency funding provided in supplemental appropriations acts; these supplemental amounts are noted, where applicable, in the Table 1 notes. Given the significance of the COVID-19 pandemic and the provision of additional funding in FY2020 and FY2021 for FDA to respond to the pandemic, this report includes a text box summarizing this funding.

FDA Funding History and FY2022 Appropriations

Since the enactment of PDUFA in 1992, FDA's spending from user fees has generally increased, both in absolute terms and as a share of FDA's total budget, accounting for over 45% of the agency's FY2020 total program level (see Figure 1).

Figure 1. FDA Spending, by Source, FY1992-FY2020 (in millions of dollars)

Source: Figure created by CRS using the FY1992 through FY2022 FDA CJs. Notes: These amounts have not been adjusted for inflation. The purpose of this figure is to show how FDA's spending has changed over time to include a greater proportion from user fees compared to budget authority. The amounts used in this figure are from the "Actuals" columns in the FDA CJs, which, according to the FY2005 CJ, reflect FDA's actual spending rather than what was provided in the enacted appropriation. "Actual" amounts beyond FY2020 are not available from the FDA CJs. PDUFA= Prescription Drug User Fee Act; MDUFMA= Medical Device User Fee and Modernization Act; ADUFA= Animal Drug User Fee Act; AGDUFA= Animal Generic Drug User Fee Act; TCA= The Family Smoking Prevention and Tobacco Control Act; FSMA= Food Safety Modernization Act; BsUFA= Biosimilar User Fee Act; GDUFA= Generic Drug User Fee Amendments; OMUFA= Over-the-Counter Monograph User Fee Act.

Between FY2017 and FY2022, FDA's enacted annual total program level (excluding amounts enacted in supplemental appropriations measures or in the American Rescue Plan Act)⁹ increased from $4.745 billion to $6.248 billion (see Table 1). Over that time period, congressionally appropriated funding increased by almost 21%, while user fee revenue increased by more than 47%. The FY2022-enacted appropriation provides $3.367 billion in budget authority, which includes $50 million for the FDA Innovation Account—as specified in the 21^st Century Cures Act—as well as an additional $2.881 billion in user fees.

The Administration's FY2023 request for a total program level of $6.637 billion would be an increase of more than $388 million (+6%) over the FY2022-enacted amount. The FY2023 request proposes $3.703 billion in budget authority—an increase of $336 million (+9%) over the FY2022-enacted amount. Included in the $3.703 billion is $50 million for the FDA Innovation Account. Table 1 includes the FDA Innovation Account money in the total budget authority and program level amounts, consistent with the budget display conventions used in the FDA CJs.

The FY2023 budget request proposes $2.933 billion in user fees—an increase of about $52 million (+2%) over the FY2022-enacted amount—to be collected through authorized programs to support specified agency activities regarding prescription drugs, over-the-counter drugs, medical devices, animal drugs, animal generic drugs, tobacco products, generic human drugs, biosimilars, mammography quality, color certification, export certification, food reinspection, food recall, the voluntary qualified importer program, outsourcing facilities, priority review vouchers, and third-party auditors. In addition to the $2.933 billion in user fees from currently authorized programs, the FY2023 request includes an additional $104.453 million in unauthorized user fees:

• expanded tobacco product fees ($100 million) to include all deemed tobacco products in the tobacco user fee assessments (e.g., electronic nicotine delivery systems [ENDS]),¹⁰ and
• additional export certification fees ($4.453 million), as current export certification fees are capped at $175 per certification, which, according to FDA, is less than the current cost to run the program.¹¹

It is estimated that including the proposed fees would bring the FDA's total requested user fee amount to $3.038 billion.

Consistent with the Administration and congressional budget display conventions, Table 1 displays, by program area, the budget authority (direct appropriations), user fees (excluding proposed, unauthorized fees), and total program levels for FDA from FY2017 through FY2022 and the FY2023 request. The human drugs program comprises the largest portion of FDA's budget (34% in FY2022), followed by the foods program (18% in FY2022), and the tobacco program (11% in FY2022), which is funded solely by tobacco product user fees.

Appendix A. FDA User Fee Authorizations and Anticipated Collections