New DTC Television Ad User Fee Program Falls Short of Funding & Will Not be Implemented; Additional Treasury Funding Made Available InsteadJanuary 15, 2008
We previously reported on the new voluntary Direct-To-Consumer (“DTC”) television ad user fee program established by the FDA Amendments Act (“FDAAA”) and FDA’s establishment of Fiscal Year 2008 DTC television ad user fee rates. Due to inadequate funding by Congress, however, the new program will not launch.
FDAAA provides that the new DTC user fee program established under FDC Act § 736A will not commence if FDA fails to receive at least $11.25 million within 120 days after enactment of FDAAA (i.e., January 25, 2008). Such funding consists of a combined total of the advisory review and operating reserve fees established by FDA. Based on industry’s interest in participating in the program, it seemed that the program would commence. FDAAA also provides, however, that the DTC fees “shall be collected and available for obligation only to the extent and in the amount provided in advance in appropriations Acts.”
On December 26, 2007, President Bush signed into law the Consolidated Appropriations Act, 2008. (A copy of the new law, Pub. L. No. 110-161, is available by searching here.) Among other things, the law makes appropriations to FDA for necessary Agency expenses, such as salaries. The new law, however, does not appropriate user fee funds for the new DTC user fee program. As such, FDA does not have the authority to collect and spend DTC television ad user fees, and invoices to those companies expressing their intent to participate in the program will not be sent. Tomorrow, FDA will issue a notice in the Federal Register discussing the end of the program.
Instead of funding the new DTC television ad program, the Consolidated Appropriations Act reportedly increases the funds available from the U.S. Treasury for FDA ad review by $4 million, to $6.25 million. These funds are only available for Fiscal Year 2008, however, so Congress will have to address the issue again next year when it considers Fiscal Year 2009 appropriations.