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Policy

Trump’s plan to raise FDA user fees conflicts with agency-industry deal

President’s proposal would raise charges paid by pharma makers

by Britt E. Erickson
March 23, 2017 | APPEARED IN VOLUME 95, ISSUE 13

The U.S. Congress is gearing up to reauthorize the Food & Drug Administration’s ability to collect fees from drug manufacturers. FDA and the pharmaceutical industry have already worked out an agreement regarding fees for fiscal 2018 to 2022. But that plan is now up in the air because President Donald J. Trump wants to boost FDA user fees by $1 billion in fiscal 2018.

Lawmakers must renew FDA’s authority to collect fees from industry every five years. FDA’s current authority to collect such fees for prescription drugs, medical devices, generic drugs, and biosimilars is set to expire on Sept. 30.

FDA drug reviews

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President Trump wants to increase industry fees by $1 billion in fiscal 2018 to help FDA deal with rising numbers of drug applications.
Source: FDA
President Trump wants to increase industry fees by $1 billion in fiscal 2018 to help FDA deal with rising numbers of drug applications.
Source: FDA

Industries regulated by FDA typically contribute about $2 billion to FDA’s budget each year to help pay for safety and efficacy reviews of new products such as pharmaceuticals and medical devices. Industry-paid user fees make up about 43% of the agency’s total annual budget, which has been hovering around $4.7 billion for the past few years.

The Trump Administration’s budget blueprint, which was released on March 16, proposes to “recalibrate” FDA user fees to “replace the need for new budget authority to cover pre-market review costs.”

The biomedical community is raising concerns about making such a change at this stage in the process, saying it could prevent Congress from passing legislation before the end of September.

The Alliance for a Stronger FDA, an advocacy group of drug manufacturers and patient organizations, calls the President’s proposed budget “neither wise nor realistic.” The proposal is unrealistic “because the drug and device industries have recently completed user fee agreement negotiations with FDA,” the group says. “User fees have always been intended to supplement the agency’s appropriation, never to replace it.”

The House of Representatives and the Senate held hearings this month about renewing FDA’s authority to collect industry-paid user fees. At a hearing on March 21 of the Senate Health, Education, Labor & Pensions Committee, Chairman Lamar Alexander (R-Tenn.) stressed the importance of reauthorizing an agreement by late July.

“If we do not move quickly,” FDA could be forced to send layoff notices to more than 5,000 employees, Alexander said. More hearings on the topic are scheduled for later this month and April.

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