FDA User Fee Bills Move Swiftly

Congress is on track to pass legislation by the end of June that would reauthorize the Food & Drug Administration to collect fees from industry to help accelerate the review of new drugs and medical devices. Bills in both the House of Representatives and the Senate go beyond reauthorization of user fees and include several regulatory reform measures targeting drug safety and development, but lawmakers have refrained from adding controversial provisions in order to keep the legislation moving swiftly.

And moving swiftly it is. The House Energy & Commerce Committee unanimously cleared its user fee bill—the FDA Reform Act of 2012 (H.R. 5651)—on May 10. The Senate Health, Education, Labor & Pensions (HELP) Committee had cleared a similar bill—the FDA Safety & Innovation Act (S. 2516)—on April 25.

The bills are expected to win approval in the House and Senate this month, giving lawmakers all of June to iron out differences between them. The goal is to get the legislation to the President before July, well before the fiscal year ends and current user fee programs expire.

If congressional efforts fail, FDA will be forced to initiate layoffs because about 60% of FDA’s drug review budget and 20% of its medical device center budget come from industry-paid user fees. Both the drug and device user fee programs are set to expire on Sept. 30.

“It’s imperative that we reauthorize these user fee agreements before they expire,” Sen. Tom Harkin (D-Iowa), chairman of the Senate HELP Committee, said at the April 25 committee meeting where the legislation was debated and voted on in a process called a markup. If Congress is unable to get the job done, “the drug and device approval process will grind to an unacceptably slow pace with devastating consequences for patients whose health and lives depend on new medical treatments,” Harkin stressed.

When Congress began the user fee reauthorization process about 18 months ago, Rep. Fred Upton (R-Mich.), chairman of the House Energy & Commerce Committee, set three goals. “First, I expected the process to be bipartisan. Second, I wanted the user fee bill enacted by the end of June. And third, I believed the user fee bill needed to foster American innovation so that we could get new treatments to American patients and create jobs here at home,” Upton recalled at a May 8 subcommittee markup. “I’m proud to report we are on track to accomplish all three goals,” he noted.

The House and Senate bills have a few differences that are still being worked out, but for the most part they closely mirror one another. Both bills reauthorize FDA user fee programs for prescription drugs and medical devices for five years, beginning in fiscal 2013. The bills also create two new FDA user fee programs, one for generic drugs and another for biosimilars, the generic equivalents of biologic drugs.

Both bills also permanently reauthorize the Best Pharmaceuticals for Children Act and the Pediatric Research Equity Act—programs aimed at increasing studies on the safety and effectiveness of drugs and medical devices for children.

Under the bills, pharmaceutical companies would pay prescription drug fees of about $713 million in fiscal 2013 and higher amounts in the other four years for which the fee is authorized. The medical device industry would pay $595 million in user fees over five years. FDA would commit to meeting performance goals for reviews and interacting more with industry.

Generic drug companies would pay about $1.5 billion over five years in exchange for more timely and predictable reviews and increased inspections of high-risk generic drug facilities. Companies that make biosimilars would be subject to application, product, and establishment fees set equal to the rate for drugs and a product development fee set at 10% of the drug application fee.

Besides authorizing user fees, the legislation contains significant measures to address concerns about drug shortages and the safety of an increasingly globalized drug supply chain. Both the House and Senate bills also call for incentives for developing new antibiotics and for changes to FDA’s conflict-of-interest rules to ensure that the agency can fill vacancies on its scientific advisory committees. In addition, the bills contain provisions intended to speed up the approval process for drugs, including those that treat rare diseases.

One of the key differences between the House and Senate bills is in the incentives for developing antibiotics. The Senate version provides incentives only for developing lifesaving antibiotics, whereas the House bill provides incentives for developing any antibiotic.

Some Democrats are pushing for changes to the House bill so that it is more in line with the Senate version with respect to antibiotics. “I regret that we failed to narrowly tailor the bill to target only drugs that treat dangerous infections for which we don’t have adequate treatments,” Rep. Henry A. Waxman (D-Calif.), ranking Democrat on the House Energy & Commerce Committee, said at a May 8 subcommittee markup. “As the bill reads now, essentially any antibiotic can qualify for the incentives included in the bill.”

In the area of drug supply chain safety, both the House and Senate bills would require domestic and foreign companies that make pharmaceuticals for the U.S. market to register with FDA annually using a unique facility identifier.

The legislation would set up a mechanism to provide FDA “with desperately needed tools and information to secure our supply chain at a time when we import massive amounts of pharmaceuticals” and their building blocks from abroad, Rep. John D. Dingell (D-Mich.) stressed during the May 8 subcommittee meeting. Many of the provisions about drug safety in the bills are based on ideas included in the Drug Safety Enhancement Act of 2011 (H.R. 1483), introduced by Dingell more than a year ago.

In addition to providing FDA with up-to-date information on domestic and foreign drug manufacturers, the legislationwould give FDA the power to “detain or destruct drugs that are found to be counterfeit or adulterated, and require importers to register with FDA and comply with good importer practices,” Dingell pointed out.

The legislation would also prohibit entry of imported drugs from companies that have delayed or denied inspection by FDA, and it would encourage parity in inspections of domestic and foreign drug-manufacturing establishments.

Several lawmakers have been considering legislation that would require a national system to track drugs throughout the supply chain, but they were unable to come to an agreement in time to include such a requirement in a user fee bill. In the House, Reps. Jim Matheson (D-Utah) and Brian P. Bilbray (R-Calif.) say they plan to continue to work on legislation for a tracking system to address adulterated and counterfeit drugs. Sens. Michael F. Bennet (D-Colo.), Richard M. Burr (R-N.C.), and Richard Blumenthal (D-Conn.) are working on a similar bill to replace the current patchwork of state laws.

To alleviate the growing problem of drug shortages, the user fee bills require drug manufacturers to notify FDA when there is the potential for disruption in the production of a lifesaving drug. The legislation also provides a pathway for accelerating the approval of drugs in short supply.

Some lawmakers would like to put more teeth in the proposed law. Under the current version of the legislation there are no consequences for failing to notify FDA of potential disruptions. Blumenthal offered an amendment last month during the Senate HELP Committee markup that would fine companies $10,000 per day, for up to $1.8 million, for failing to notify FDA of a meaningful disruption of lifesaving drugs. Blumenthal withdrew the amendment during the committee markup but plans to bring it up on the Senate floor.

A controversial measure to change the mission of FDA from protecting public health to also promoting economic competitiveness and job creation was not included in the user fee bills. Legislation to increase government oversight of cosmetics also failed to make it into the bills.