FDA Globalization Act of 2008: Fees, Fees, and More Fees

Yesterday, the U.S. House of Representatives Committee on Energy and Commerce released a Discussion Draft of the "Food and Drug Administration Globalization Act of 2008."  The “Discussion Draft is meant to stimulate discussion about how to provide adequate funding and authority for FDA to ensure safety of . . . food, drug, medical device, and cosmetic” products, according to a memorandum accompanying the draft legislation.  The Energy and Commerce committee intends to hold hearings and to markup the draft in the next few weeks. 

The Discussion Draft contains comprehensive language that addresses the safety of food, drugs, devices, and cosmetics as well as a number of general provisions relating to the agency.  Although the draft may undergo significant change during hearings and markup, there are several noteworthy provisions.  The draft proposes an annual registration fee of $2,000 for food facilities operating in the U.S. or exporting food to the U.S., would require labeling to identify the country-of-origin of foods and whether certain foods have been treated with carbon monoxide, and would provide FDA with mandatory recall authority.  With regard to drugs and devices, the draft proposes a registration fee to cover the cost of drug and device inspections, and would require country-of-origin labeling.  The draft also would require cosmetic facilities to register with the FDA at a cost of $2,000 per facility and require adverse-event reporting for cosmetics.  Finally, the draft proposes to increase the capacity of FDA to monitor foreign facilities. 

Of particular interest in the Discussion Draft is the number of fees proposed. There are fees for registration, reregistration, reinspection, certification, certifying agent accreditation, laboratory accreditation, export certification, and importer registration.  The Energy and Commerce Committee predicts that the food registration fees alone will generate approximately $600 million for food safety activities at FDA.  In addition, the bill provides for the levying of substantial fines for violations of the new requirements.  The proposed fees in this bill mirror the efforts seen in FDAAA to increase user fees as a means of generating revenue for FDA.  We will continue to monitor this trend and report any new developments in the "Food and Drug Administration Globalization Act of 2008." 

Susan J. Matthees & Ricardo Carvajal