Limited Resources Challenge Regulators

Published on: 
BioPharm International, BioPharm International-02-01-2008, Volume 21, Issue 2
Pages: 40–45

The much needed modernization of the agency's IT systems and inspection capabilities will likely fall prey to budget shortfalls.

Twenty years of increasing assignments and declining budgets has changed the US Food and Drug Administration from the world's gold standard for drug regulation into a "debilitated, under-performing organization," according to the agency's advisory Science Board. In a scathing analysis issued last December (2007), the panel described how FDA suffers from "serious scientific deficiencies" and cannot meet its regulatory responsibilities.1

Jill Wechsler

The main culprit is inadequate funding, according to the Science Board subcommittee that prepared the report. FDA lacks the staff and resources needed to support regulatory functions and to keep up with scientific discoveries important to ensure the safety of medical and food products. Fast-expanding user fees have made up for some of the deficit, but increased reliance on industry payments has created inequities in FDA. An analysis by panel member and attorney Peter Barton Hutt reveals that any budget increases over the last 20 years have been lost to inflation. FDA has gained only 700 appropriated staffers during this period, even though its work was expanded by hundreds of statutes, executive orders, and other mandates.

A key FDA need is an information technology (IT) system that is able to process and integrate vast amounts of scientific information. FDA's IT budget runs about $200 million, but it would require at least another $200 million to be able to assess reams of clinical trial data and track thousands of manufacturing sites around the world. Senate Health Committee Chairman Edward Kennedy (D-MA) termed the analysis a "wake-up call" to provide FDA with adequate resources to do its job, and Rep. Henry Waxman (D-CA) called on FDA and administration leaders to tackle these problems.



Only a few days after the meeting, however, Congress approved long-delayed federal government funding legislation for fiscal year 2008 (which began on October 1, 2007) that boosted FDA's total budget funding to $2.2 billion—$1.7 billion without user fees. In view of heavy spending cuts across the federal government, FDA did well to receive any budget increase at all. Agency advocates seek to boost FDA appropriations to $2 billion in five years, but this year's budget falls short of this goal. Much of the $145-million increase in appropriations, moreover, will support food safety programs, with little left for other regulatory initiatives.

The Center for Drug Evaluation and Research (CDER) has a $682.8 million budget for 2008, almost half of which ($356 million) comes from user fees. Much of CDER's increase will go to drug safety activities and the rest to regulate generic drugs, direct-to-consumer advertising, and FDA's Critical Path initiative. The Center for Biologics Evaluation and Research (CBER) will have a $237-million budget, including $81 million from user fees. Its $12-million gain supports pandemic influenza preparedness and other popular initiatives.


As usual, Congress uses the appropriation process to micromanage FDA policies. The legislation seeks an assessment of FDA's MedGuide program for riskier therapies and instructs the agency to produce studies and reports on everything from Ketek safety to microbial resistance. Several provisions reflect ongoing concerns on Capitol Hill about pharmaceutical and biotech industry influence on FDA policies. Congress reminds FDA to reduce the number of advisory committee members with conflicts-of-interest, and undermines the launch of the Reagan-Udall Foundation by stipulating that FDA cannot use any appropriated funds to support this new organization. Rep. Rosa DeLauro (D-CT), chair of the House Appropriations subcommittee that oversees FDA, has objected that Reagan-Udall provides an avenue for manufacturers to shape FDA safety initiatives.

While FDA officials hope to assuage DeLauro's concerns, the rift may interfere with efforts to help establish an active surveillance system for drugs. Former FDA Commissioner Mark McClellan, recently named to chair Reagan-Udall, is a leading advocate of using health system databases and advanced IT systems to detect and analyze drug safety signals earlier and faster to prevent safety problems and facilitate new drug development. Establishing such a system is no easy task and will require new data standards and collaborative efforts, a task appropriate for Reagan-Udall.

A much larger influence on FDA operations is the expanding role of user fees in agency funding: almost one-fourth of FDA's $2.2-billion 2008 budget will come from user fee revenues and most of that ($460 million) from pharmaceutical and biotech manufacturers. At the December Science Board meeting, attorney Hutt lamented the funding "desperation" that has forced FDA to rely increasingly on user fees to shore up its depleted coffers.

Yet members of Congress find it too easy to tap this ready source of revenue to support FDA programs, minimizing the likelihood that the fees will be reduced or eliminated. In fact, the FDA Amendments Act (FDAAA) boosted drug user fees by another $25 million for each of the next five years to support additional drug safety initiatives, and pending legislation proposes to raise millions more through fees on food and drug imports.


Congress is likely to enact food and drug import legislation because FDA's Office of Regulatory Affairs (ORA), which operates the agency's field inspection force, has suffered from depleted resources even more than the rest of the agency. FDA officials unveiled a major field consolidation plan two years ago that proposed to close regional offices, reduce the number of district offices from 20 to 16, and shut seven of 13 field laboratories. But Congressional leaders blocked the closures, and ORA officials agreed to "take a fresh look" at how to meet its challenges.

Meanwhile, scandals over contaminated food and medical products from abroad have focused public attention on the inadequacies of the current system for ensuring safe food and drug imports. In the past year, FDA had to contend with contaminated pet food and toothpaste from China, along with fears about tainted blood substitutes and liquid medicines laced with diethylene glycol.

These crises prompted hearings on Capitol Hill. The Bush administration established an import safety task force headed by Health and Human Services Secretary Mike Leavitt to map out improvements in the US food and drug import system, which produced a report in November. House Energy & Commerce Committee Chairman John Dingell (D-MI) proposed user fees on imported food and drug shipments to bolster US inspections and field laboratories. The Senate Finance Committee has interest in tackling import safety this year, and Senator Kennedy is working on a comprehensive food safety bill. The resulting legislation is likely to enhance FDA's authority to mandate product recalls and halt imports, boost penalties for illegal activities, and require foreign manufacturers and importers to certify product compliance with quality standards.

Reformers seek a lifecycle approach to import regulation that follows products through the supply chain and delivers assessments of product risk to border inspectors, compliance offices, and electronic screening systems. A recent proposal is for FDA to establish regulatory offices in China and India to manage the rising volume of drug exports to the US. FDA signed a memorandum of agreement with China in December that encourages safety certification of exported drugs and information sharing related to inspections. It will focus initially on designated high-risk products including insulin, blood screening diagnostics, human growth hormone, and others.

It remains to be seen if FDA will gain the resources needed to really modernize its field force, foreign inspection capability, and outdated IT systems. There is some concern that policy changes could open US borders to more counterfeit and unregulated products without a major overhaul of current policies and operations. Congress is providing some funding increase for food monitoring, but it's not clear whether that will translate into broader improvements in how the agency oversees imported drugs and biotech therapies.

Jill Wechsler is BioPharm International's Washington editor, Chevy Chase, MD, 301.656.4634,


1. US Food and Drug Administration. FDA Science and Mission at Risk. 3 Dec 2007. Available from: