By Lisa Seachrist

Washington Editor

WASHINGTON -- The Clinton administration's plan to use a slew of new user fees to make up for an 8 percent cut in the FDA budget has failed to fly during mark-up of House appropriations legislation for the agency.

The House Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies gave the FDA $944 million in appropriations -- up from $907 million for fiscal year 1997 -- and refused to rely on new user fees for a variety of the agency's activities to provide funding for the agency.

"On balance, we think this is good progress," said Barry Caldwell, vice president for Federal Affairs with the Pharmaceutical Research and Manufacturers of America (PhRMA). "Things are moving forward."

"It's excellent news that Congress did not bite on the unauthorized user fee gimmick," said Carl Feldbaum, president of the Biotechnology Industry Organization (BIO).

While the subcommittee failed to buy into the Clinton administration's plan to levy user fees
-- on industries that currently have no fees -- an act that would require legislation authorizing the agency to collect those fees, the subcommittee did provide funds for two of the Clinton administration's favorite initiatives: $29 million of the appropriations budget is set aside to fund the Youth Tobacco Initiative to prevent young people from smoking and the Food Safety Initiative to provide an early detection and surveillance system to prevent outbreaks of contaminated foods.

Caldwell said that leaves the agency with $915 million for normal operations. "We have always been shooting for level funding for the agency," Caldwell said. "Based on what we have agreed to in PDUFA II, the agency ought to be able to meet the goals that we have agreed upon."

The subcommittee also included a $91 million placeholder for funds to cover the agency's Prescription Drug and User Fee Act (PDUFA) obligations. PDUFA expires at the end of September and the appropriations subcommittee included funds to cover the program for a year should the authorizing committees fail to reauthorize the act in time for the budget process to go forward.

"The subcommittee clearly expressed interest in seeing PDUFA reauthorized for five years," Caldwell said. "They can only act for one year at a time so they plugged in a one-year extension and used the president's numbers."

The bill now goes to the House Appropriations Committee and then to the House floor. Typically, the Senate doesn't act until a bill comes out of the House. *