For better of worse, PDUFA reauthorization will likely be the only FDA-specific legislation that the 112th Congress considers. You can bet, therefore, that the 2012 bill will become a lightning rod for device and drug industry issues.*
User fees constitute 20% of the FDA's budget, plugging a near $500 million gap that federal appropriations (the agency's other revenue source) leave open. In the prescription drug program, the split is 50:50.
The nation's economic backdrop and emphasis on deleveraging will also weigh on the legislative debate. And depending on how health reform plays out and the extent to which it bites into device- and drug-maker profits, industry could strongly resist efforts to shift more responsibility for the agency's budget onto its shoulders, i.e. paying even higher fees.
The tax payer, meanwhile, will certainly take note of the more-than $2 billion in annual appropriations that the bill will lift from his pocket.
The FDA's scope is endless. At least six to 10 times each day we interact with products it regulates—equal to roughly 25% of consumer expenditures in the United States. Its oversight encompasses 80% of the food supply and nearly every radiation-emitting device.
As with any regulatory body, it fights a constant battle of keeping pace with innovation. It features staffers much less well-paid than their industry counterparts, and substantially inferior technology and organizational structure than fast-evolving private enterprises.
Any massive budget surge would likely produce only a fleeting advantage, if one at all.
It should be no surprise, then, when the debate over user fee reauthorization begins later this year that many will scrutinize the agency in a different way. Rather than size, the yardstick will likely be return on investment. (If the new Congress accomplishes anything, it will be the introduction of more business-centric language to debates on the Hill.)
Industry will question the limited extent to which increasing user fees have yielded new product approvals, and whether the Patient Protection and Affordable Care Act and other legislative burdens allow for even higher fees. Taxpayers will question the responsiveness and adaptability of an even larger agency.
At this early point in time, the odds favor a future bill resembling previous reauthorizations—an inflation-adjusted continuation of the same model.
In the coming months, those odds could change substantially.
* This article builds on Steven Grossman's recent article "State of the Food and Drug Administration", published in the Lyceum newsletter Perspectives. It reflects a more skeptical viewpoint.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.