The Congress and Its Camel – the Expansion of User Fees

Horace Scudder’s 1915 “The Book of Fables and Folk Stories” includes a story, titled “The Arab and His Camel,” that ends with the moral “It is a wise rule to resist the beginnings of evil.”  This is, of course, a parable of the Middle Eastern metaphor for the situation where allowing a small act will lead to a larger undesirable circumstance: “Do not allow a camel to put his nose under the edge of your tent, for soon you will have a camel in your tent.”  In 1992, when Congress passed the Prescription Drug User Fee Act (“PDUFA”) establishing user fees for the review of “human drug applications,” the proverbial camel’s nose came under the tent.  Although it can be debated (particularly given the substantial decrease in NDA review times in the post-PDUFA era compared to the pre-PDUFA era) whether PDUFA signalled the “beginnings of evil” (as certainly some people both in and out of FDA would contend), PDUFA has clearly provided a blueprint for the creation other user fees.

In the almost 15 years since the passage of PDUFA, not only have human drug application user fees increased substantially (FDA’s interpretation of the law has also resulted in more user fee revenue), but Congress has created PDUFA-like user fee systems for medical devices (under the Medical Device User Fee and Modernization Act of 2002) and animal drugs (under the Animal Drug User Fee Act of 2003).  FDA has also proposed, and Congress is considering as part of omnibus FDA reform legislation, a PDUFA-like user fee system as part of PDUFA IV to fund the review of direct-to-consumer advertisements. 

The most recent user fee proposal was made earlier this month by Representative John Dingell (D-MI). (And you thought the whole camel already entered the tent.)  Rep. Dingell issued discussion draft legislation, titled the “Food and Drug Import Safety act of 2007,” that would amend the FDC Act to, among other things, permit the assessment of two new types of user fees: (1) imported food inspection user fees; and (2) imported drug inspection user fees.  According to a press release and “Dear Colleague” letter issued by Rep. Dingell “[r]ecent reports of tainted imports including pet food, seafood, and cough syrup, have highlighted the need for legislative action.”  A summary of the draft bill is available here.

Rep. Dingell’s draft bill, if enacted, would authorize food import fees totaling $500 million and drug import fees totaling $300 million in each of fiscal years 2008 through 2012.  A fee of up to $50 would be assessed for each line item of food, and a fee of up to $1000 would be assessed for each line item of drug.  FDA would need to issue regulations defining what constitutes a “line item” of food and drug.  The draft bill would also amend the FDC Act to enhance civil monetary penalties for food importers that violate the FDC Act.  Specifically, the bill would amend FDC Act § 303 to permit civil monetary penalties of $100,000 in the case of an individual and $500,000 in the case of a company (not to exceed $1 million for all adjudications in a single proceeding).    

Rep. Dingell’s user fee proposal, although it serves an admirable purpose, begs the questions of how much more room there is in the proverbial user fee tent, and whether Congress’ increasing reliance on user fees to fund FDA activities (instead of substantially increasing FDA appropriations) will eventually cause that tent to collapse.