FDA Gives Big Fat Retention Bonuses

The FDA is giving workers more than $8 million in bonuses to keep them from defecting to drugmakers and other regulated industries, and is doing so at the very same time the agency is pressed to spend more on food and drug safety, the Associated Press reports.

The retention bonuses, worth $5,000 or more per employee, are triple what was paid in 2002 and are more than any other federal agency pays. As recently as 2005, the FDA accounted for more than 40 percent of the overall $21.6 million the government paid in retention bonuses, according to FDA and other government records reviewed by the news service.

The retention bonuses are only part of an overall financial incentive program, including recruitment and relocation bonuses paid its employees, that has grown sharply at FDA in recent years. In 2002, the agency gave out just $3.2 million in bonuses worth $5,000 or more, the AP reports. That grew to $9.5 million last year.

FDA officials say the bonuses are necessary to keep vital employees from moving to the private sector; congressional critics say the money would be better spent on improving safety. "Congress puts in extra money in for food safety and what does FDA spend it on? Bonuses," says Bart Stupak, aa Democrat from Michigan, who chairs the oversight and investigations subcommittee of the House Committee on Energy and Commerce.

The bonuses are expected to be an issue at a congressional hearing today to examine the FDA's efforts to protect the nation's food supply, as the total nearly matches the additional amount the agency is spending to strengthen food safety next year. A spate of high-profile outbreaks of foodborne illness, including salmonella-tainted snack foods that sickened dozens of toddlers, has drawn scrutiny from Congress.

FDA food safety center employees receive just a fraction of the bonuses - $265,000 overall last year. Instead, employees in the drugs office, where the agency reviews new drugs seeking federal approval, claim the vast majority, or nearly $5.8 million in 2006.

The FDA has long complained about turnover in its Centers for Drug Evaluation and Review, especially among medical officers. Agency officials contend the incentives help recruit new employees and more importantly encourage veterans from leaving to work for drug companies, universities, law firms and others that value their decades of experience and sought-after technical expertise.

"It allows us to compete in the private sector and it allows us to hang onto people that are going to leave and go to the private sector, so they stay with us a little longer until we get their replacement ready or hire someone else from the outside," John Dyer, the FDA's chief operating officer, tells the AP.

In most cases, retention incentives cannot equal more than a quarter of an employee's base pay, according to the Office of Personnel Management. However, they can equal up to half the base if the need is critical. Dyer says that even with the bonuses, employees earn 10 percent to 20 percent less than what they could get in the private sector.

In 2005, the most recent year for which data are available, two departments - Defense and Health and Human Services - accounted for $18.5 million of the $21.6 million in retention bonuses paid by the federal government, according to OPM.

While the Defense Department doled out more of the retention bonuses, HHS paid more overall -- an amount equal to nearly 55 percent of the government total, or $11.9 million. The FDA, which is part of HHS, in turn accounted for roughly $8.7 million of that.

The FDA has been especially generous with its medical officers, including doctors who help the agency review drug applications. The FDA has long lamented its difficulties in keeping its drug reviewers, whom drugmakers routinely poach. In some years, the FDA has lost as many as one in five of its drug reviewers.