By Lisa Seachrist

Washington Editor

WASHINGTON — The FDA is operating under a hiring "pause" that has some industry leaders questioning whether the agency has adequate funds to make full use of the renewed user fees.

Unlike hiring freezes, which are publicly announced, news of the pause was released via an internal agency e-mail to current employees. The move has prompted the Biotechnology Industry Organization (BIO) to question the agency's appropriations in a letter to acting FDA commissioner Michael Friedman, Secretary of Health and Human Services Donna Shalala and the Office of Management and Budget (OMB).

"This is a real warning that attention must be paid so that user fees will not be substituted for appropriate funding," said Carl Feldbaum, president of BIO. "Quiet hiring pauses are certainly not in the best interest of our industry. And, we take notice in the strongest, most respectful terms."

BIO and Feldbaum see the action as an indication that the agency doesn't have enough allocated resources to meet its statutory obligations to regulate the food, medical device, pharmaceutical and biotechnology industries.

Feldbaum noted that in 1992, with the enactment of the Prescription Drug User Fee Act (PDUFA), the agency and industry agreed to user fees in return for agency review of those drugs under a statutory time frame. At that time, Feldbaum said the industry and the FDA were responding to a crisis in which there were insufficient resources within the FDA to review new biologics and drugs in a timely manner.

The program was so effective that its renewal served as the centerpiece to the sweeping agency reforms enacted last year with the Food and Drug Administration Modernization Act. The concern is that that the administration and the agency may be seeing user fees as a means to supplement inadequate appropriations.

"This is a signal that FDA, OMB and the administration need to pay more attention to the level of appropriations," said Feldbaum. "This letter raises the issues to the incoming commissioner, who is expected to come on board very shortly."

Jane Henney, who was confirmed by the Senate last week, is expected to be sworn in as FDA commissioner by week's end. With the 1999 appropriations concluded, most of the effort to secure adequate funding for the agency will take place for FY2000.

OMB Already Addressing Some Concerns

However, Shalala has discretionary control over 1 percent of the appropriations to the Department of Health and Human Services. Feldbaum is hoping that some of the money will be allocated for FDA operations.

"Secretary Shalala has certain flexibilities within this budget that can be exercised," Feldbaum said.

Feldbaum said that within days of sending his letter, dated Oct. 19, the OMB addressed some of his concerns about the FDA's place in the appropriations process. As a matter of historical note, FDA appropriations come through the Agriculture, Rural Development and Related Agencies Appropriations Subcommittee rather than with the rest of the Department of Health and Human Services.

In addition to concerns over adequate funding, BIO stressed the importance of reviewer-initiated research at FDA to maintaining the scientific expertise needed to conduct reviews and urged the agency to continue to fund such activities.

"The research element of the job not only contributes to the technical competence of the review, but helps the agency recruit and retain the best people," Feldbaum said. *