Food Companies Face New Fees Under Obama Budget Proposal

By Jared A. Favole
Dow Jones Newswires

WASHINGTON -(Dow Jones)- Food companies and makers of generic drugs would face new fees under an expanded budget for the U.S. Food and Drug Administration proposed on Monday by President Barack Obama.

The fees would be used to review applications for generic drugs, and to support and improve inspections of food facilities. Obama has said he supports enhancing the nation's food supply amid a series of food scares that included tomatoes and peanut butter.

Obama's proposed budget would boost funding for the FDA by $80 million to $2.43 billion for fiscal year 2011 compared with a $2.35 billion budget for the agency in fiscal year 2010. These figures don't include user fees the agency collects from the drug, device and other industries to review product applications and inspect facilities. Including such fees, Obama's budget request totals $3.7 billion compared with $3.2 billion in fiscal 2010.

The budget includes increasing money for the FDA's device and food divisions, both of which have been under congressional scrutiny amid a series of contaminated food recalls and questions about the agency's device approval process.

The budget comes as new management at the FDA has bumped up enforcement, and proposed several new programs to step up oversight of food safety and drug imports.

It's unclear if the budget increase will be sufficient to implement all those changes.
In 2009, Obama signed a law giving the FDA the authority to regulate the tobacco industry. The agency can collect up to $450 million in user fees from tobacco companies in 2011.

(Alicia Mundy of The Wall Street Journal contributed to this article.)
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