On April 10, 2013, the U.S. Food and Drug Administration (“FDA”) announced a proposal that could increase the cost of doing business for the food and cosmetic industry. In its budget request for fiscal year 2014, the FDA has proposed two new user fee programs for food companies to help pay for implementation of the food safety measures mandated by the Food Safety Modernization Act (“FSMA”). In addition, a user fee program has also been proposed for cosmetic manufacturers to support FDA cosmetic safety and other FDA cosmetic responsibilities. The FDA would need to obtain Congressional authorization for the new user fee programs in the form of new legislation before they could be implemented.
The new user fees would consist of a food facility registration and inspection fee, as well as a food importer fee. The facility registration and inspection fee is separate from the re-inspection fee that is already in place. Small food importers would be exempt from the importer fee and there would be a maximum charge for large importers. In addition, the cosmetics user fee would consist of a registration fee for both domestic and foreign manufacturers.
According to the FDA, the food importer fee would generate an estimated $166 million for the agency in 2014, while the facility fee would generate an estimated $59 million. Revenues from these fees would account for 20 percent of FDA’s total food program budget and also fund 85 percent of the $295 million the agency said it needs to support FSMA next year. The FDA indicated that most of the revenue from these two fees will support the activities to improve the food import process and increase the effectiveness of facility inspections. The cosmetics user fee is projected to generate $19 million for the agency in 2014.
Additional fees have also been proposed by FDA in its 2014 budget. For example, the agency has proposed additional fees on plastic and machinery substances that come into contact with food, international couriers, and follow-up inspections of medical establishments.
The new fees are likely to face strong opposition by the food and cosmetic industry and obtaining approval by Congress will also be a challenge.