The study attempted to investigate cost determinants of the Thai FDA.Multi-product cost functions were constructed, employing the data during 1980-1999drawn from previous records of actual expenses and various output categories of theThai FDA. The linear cost functions in which total costs are function of outputs andwage rate were estimated by using ordinary least squares regression analysis. As a brief data description, total cost of FDA showed a large rising trend atthe growth rate 19% on the average during the past 20 years. The percentage ofcapital stock in the total cost components indicated that land cost tended to beone-fifth of the proportion. Labor expense was also a large proportion in thecomponents. Two types of outputs, pre and post-marketing activities, were employed asthe basis for the models. The costs of pre-marketing activities increased sharplyduring the period 1983-1992 and then fluctuated. The costs of post-marketingactivities also increased but declined continuously after 1992. The fluctuation andinconsistency of output volumes have been observed, particularly since 1992, due tothe administrative structural changes. Wage rates have been also continuouslyincreasing at the average rate 9.6% each year. The estimated results revealed that the total cost levels of the Thai FDA couldnot be explained by the quantitative volume of its outputs. The only output that wassignificantly negative related to the cost level is amount of product registration.It might be concluded that increases in the volume of product registration wouldlower the level of costs. Cost elasticities with respect to wage rate ranged from 1.5to 1.9, implies a labor intensive characteristic of the Thai FDA. The results alsoindicated that a rise in administrative structural changes after the year 1992 mightlower the cost level of post-marketing activities. R('2) values were high, infer thatthe explanatory variables employed in the models are good determinants of the FDAcosts. With regard to the empirical findings,the government could have an advantage inadoption and fully implementation the output budgeting system in order to efficientlyutilize resources.