Presentation to the FDA Alumni Association April 11, 2007 Bill Hubbard Steven Grossman

1. Presentation to the FDA Alumni Association April 11, 2007 Bill Hubbard Steven Grossman The FDA Alliance www.StrengthenFDA.org

2. FDA Budget Basics • FDA’s budget is relatively small: $1.5B appropriated; $400M in user fees • 83% of FDA costs are staff-related: salary, benefits, rent, supplies, telecom, travel, etc. • FDA’s appropriation must increase $80 to $100 million per year to “stay even” with increased costs • User fees, user fee triggers, earmarks, and counterterrorism grow, while FDA’s base erodes • Need for a multi-year public effort to ensure FDA has sufficient resources, and to maintain and build public confidence and trust in FDA

3. FDA Stakeholders Responding • FDA Alliance formed in April, 2006 at urging of patient and research advocacy groups • More than 100 members, including seven former commissioners and a broad range of patient, consumer and industry interests • Coalition for a Stronger FDA formed in September, 2006 by BIO, GMA and three former HHS Secretaries • Broad membership representing consumers, patients, trade associations, and companies

4. A Common Goal • Two coalitions, two voices, one goal: Increased Appropriations for FDA • Both organizations have campaigns underway to educate and persuade Congress, Administration, media, general public • Model: Multiple advocates contributed to doubling of the NIH budget • FDA’s budget problems are so great and the stakes so high, there cannot be too many voices!

5. Budget Environment Difficult, But Congress is Listening • Most federal agencies will get the same dollars in FY 2007 (current year) as they did in FY 2006 • FDA received $90M more in FY 2007 than in FY 2006 (+$65M appropriation; +$25M in user fees) • President’s FY 2008 budget request calls for further increases (in appropriation and user fees) • Alliance/Coalition urging Congressional focus on adding appropriated dollars to meet FDA mission • Members/staff encouraging; hard fight still ahead

6. What are we telling Congress? • New product submission flat, drug development too long • Uninspected food imports skyrocketing • Foodborne disease outbreaks increasing • New therapies/devices for major diseases and conditions could be seriously slowed • Public confidence in drug safety sinking • Scientist turnover double that of NIH, CDC • Europe investing $250M/yr. in “critical path” • Food bioterrorism a realistic threat, few countermeasures • Demands to shift resources to counterterrorism from food additives, international harmonization, etc.

7. Public Confidence Plummeting Harris Poll: Fair/poor job Excellent/good job • 37% 61% • 47% 56% 2006 58% 36%

8. Appropriations dropping as percentage of FDA’s total costs $1.78 M $1.68 M $1.64 M Counterterrorism $1.54 M Payroll Shortfall $1.28 M User Fees User Fee Triggers Earmarks Facilities Core Functions $ Thousands of Current Dollars

9. FDA Staffing

10. 1994 - Animal Medicinal Drug Use Clarification Act 1994 - Dietary Supplement Health and Education Act 1995 - Federal Reports Elimination and Sunset Act 1995 - Unfunded Mandates Reform Act 1995 - The Paperwork Reduction Act 1996 - Freedom of Information Act (FOIA) 1996 - Safe Drinking Water Act Amendments 1996 - Animal Drug Availability Act 1996 - Food Quality Protection Act 1996 - Economic Espionage Act of 1996 1996 - Electronic Freedom of Information Improvement Act 1996 - Comprehensive Methamphetamine Control Act 1996 - Health Insurance Portability and Accountability Act 1996 - Drug-Induced Rape Prevention Punishment Act 1997 - Food & Drug Administration Modernization Act (FDAMA) 1997 - Better Pharmaceuticals for Children Act 1997 - PDUFA II 1998 - Antimicrobial Regulation Technical Corrections Act 1998 - Sec. 615 Ag. Research, Extension and Education Reform Act 1998 - MQSA Reauthorization 1998 - Sec. 654, Omnibus Approps. (Family Impact Assessments) 1999 - Government Employees Training Act 1999 - Fed. Financial Assistance Management Improvement Act 2000 - Responsible for Clinical Laboratory Improvement Amendments (CLIA) 2000 - Approps Act (FDA) - FY 2001 2000 - Medicine Equity and Drug Safety Act 2000 - Prescription Drug Import Fairness Act 2000 - Approps. Act (HHS), Sec. 516, HPV-Condom Labeling Review Congress Keeps Adding Responsibilities—60 since 1994 2000 - Ryan White AIDS Care Act 2000 - Date Rape Drug Prohibition Act 2000 - Children’s Health Act 2000 - Technology Transfer Commercialization Act 2001 - Animal Disease Risk Assessment 2002 - Medical Device User Fee and Modernization Act (MDUFMA) 2002 - Hatch-Waxman-Amendments 2002 - Drug Importation Report 2002 - Farm Security & Rural Investment Act 2002 - Bioterrorism Act 2002 - PDUFA III 2002 - Best Pharmaceuticals for Children Act 2002 - Rare Diseases – Orphan Product Development 2002 - E-Government Act 2003 - Mosquito Abatement for Safety and Health Act 2003 - Animal Drug User Fee Act 2003 - Pediatric Research Equity Act (PREA) 2003 - Medicare Prescription Drug and Modernization Act 2004 - Minor Use and Minor Species Animal Health Act 2004 - Food Allergen Labeling and Consumer Protection Act 2004 - Medical Devices Technical Corrections Act 2004 - National Defense Authorization Act 2004 - AIDS (PEPFAR) 2004 - Project BioShield 2004 - Anabolic Steroid Control Act 2004 - MQSA Reauthorization 2004 - Homeland Security Pres. Directive (HSPD) #12, ID Standard 2005 - Protecting America in the War on Terror Act 2005 - Patient Safety & Quality Improvement Act 2005 - Medical Device User Fee Stabilization Act (MDUFSA) 2005 - Stem Cell Therapeutic and Research Act 2006 - Combat Meth Act

11. Volume of Adverse Event Reports Becoming Unmanageable

12. Imports of FDA-regulated products 19.8 MILLION

13. ORA Field Budget History - FTEs

14. Has FDA Been Given Enough Resources? FDA Funding Has Lagged Other Public Health Agencies

15. Has FDA Been Given Enough Resources?FDA Funding Comparable to Local School Systems FY 06FY07CR FY08 Proposed Fairfax County (VA) $1.89B $2.1B $2.2B Montgomery County (MD) $1.72B $1.85B $1.98B FDA (appropriated funds) $1.48B $1.55B (Pres. Request $1.64B) Prince George's County (MD) $1.35B $1.49B $1.66B

17. Annual Appropriations... • Never include the full cost to FDA of the increased costs of pay and benefit increases • Never include increases for increased non-pay costs • Almost always include reductions in FDA’s budget under a variety of headings • –Administrative Savings • –IT Consolidation • –Strategic Redeployment, etc….

18. What would FDA look like? What would FDA’s budget look like today if it had gotten the full costs of these inflation increases? • Assume 2003 starting point • 5.8% Inflation increases • Budgeted program increases also increased at same rate in future years • No annual budget cuts

19. Total FDA Appropriations

21. The Need • Renewed public commitment to the FDA • Recognition that FDA cannot keep up without a concerted, bipartisan, multi-stakeholder commitment • Administration • Congress • Patient Groups • Consumer Groups • Industry • Multi-year effort to: • Ensure FDA has sufficient resources, and • Maintain and build public confidence and trust in FDA

22. Success Will Have Broad Benefits • Increased public health protection • Longer, healthier lives • Reduced health care costs • Safer food supply, less vulnerable to bioterrorism • Greater public confidence in FDA decisions and the products it regulates • Improved patient access to new therapies • FDA leadership in promoting science-based standards nationally and internationally to improve American competitiveness

23. Steven Grossman Executive Director FDA Alliance PO Box 4305 Silver Spring, MD 20914-4305 info@StrengthenFDA.org www.StrengthenFDA.org Bill Hubbard, Senior Advisor Coalition for a Stronger FDA 1333 New Hampshire Ave., NW, Suite 429 Washington DC, 20036 william.hubbard@fdacoalition.org www.FDAcoalition.org For More Information The FDA Alliance www.StrengthenFDA.org