All it took was the prospect of collecting some $6.4 billion in user fees to fund FDA to halt the partisan bickering and bring Senate Democrats and Republicans together to quickly pass the FDA Safety and Innovation Act (FDASIA). The legislation, approved just before Memorial Day, reauthorizes hefty user fees from drug and medical device companies, along with a host of new requirements that will govern FDA operations over the next five years.
Leaders of the House indicated they would consider its version of the legislation (H.R. 5651) as early as this week, in order to finish work on the complex bill by the end of June. FDA officials and regulated industry want to avoid adding healthcare reform provisions to the FDA fee measure, and that could become more difficult after the Supreme Court rules on the constitutionality of the individual mandate and other health policy issues. Once the House acts, leaders of both legislative bodies will have to agree on a common bill to send to the White House, hopefully by July 4th.
The Senate action reflected bipartisan agreement to reject most controversial proposals, such as measures to permit reimportation of drugs from Canada, to prevent pay-for-delay generic-brand patent settlements, and to terminate market exclusivity provisions on drugs and biologics from companies that violate the law. Several minor provisions were added to the bill, including measures to strengthen clinical trial registration and reporting requirements, to clarify sunscreen labeling, to permit the exchange of prescription drug information across state lines, and to require an independent assessment of the FDA review process for drugs and biologics.
As with previous FDA fee reauthorization bills, this version contains language that establishes new agency programs and policies – here to prevent drug shortages, to block import of adulterated products and to speed approval of critical new therapies. Still to come is agreement on a drug track-and-trace system. FDA officials insist that tracking is useful only if it can identify individual vials and bottles; manufacturers say that would be prohibitively expensive and that tracking is helpful even if limited to batches and cases.
The House and Senate bills reauthorize $4.1 billion in user fees by innovator pharmaceutical companies over the five–year period of 2013 through 2017. Medical device companies will pay fees of about $600 million, more than double the previous amount. For the first time, generic drug makers have agreed to provide fees of some $1.58 billion, and parties developing biosimilars will contribute about $128 million, according to the Congressional Budget Office (CBO). The legislation also makes permanent policies that provide incentives for the development of pediatric labeling and dosage forms of drugs and biologics. Up until now, these programs had to be reauthorized every five years, a policy blamed for curbing enthusiasm for investing in pediatric research. Other new measures offer incentives for developing new antibiotics and additional orphan drugs.
Despite the hefty user fees, CBO projects that the legislation will cost the government $337 million over the 2013-2017 period. While the user fees and provisions that increase access to low-cost generic drugs will reduce budget deficits initially, other requirements will increase federal spending in future years. And although provisions that bring lower-priced generic medicines to market more quickly will reduce expenditures on prescription drugs by federal government health programs, CBO estimates that drug prices will rise over the long run due to exclusivity provisions that delay market entry of certain low-cost therapies. Congressional rules require legislation that raises government expenditures to devise ways to offset these increases, and this is likely to require lengthy discussion by House and Senate leaders over how to cover the $350 million or so spending gap.
NOTE: On May 30, the House passed the FDA Reform Act also reauthorizing PFUDA. See PhRMA’s statement.