FDA user-fee bill seen as speed­ing ap­provals, but harm­ing smaller firms

Modern Healthcare - - NEWS - By Alex Kacik

A deal aimed at al­low­ing the Food and Drug Administration to col­lect $400 mil­lion-plus an­nu­ally in ad­di­tional user fees could speed up phar­ma­ceu­ti­cal and de­vice ap­provals, ac­cord­ing to in­dus­try ex­perts.

A bi­par­ti­san group of con­gres­sional lead­ers this month re­leased a draft of the FDA Reau­tho­riza­tion Act, which would con­tinue the FDA’s author­ity to col­lect user fees from the mak­ers of branded and generic pre­scrip­tion drugs, med­i­cal de­vices and biosim­i­lars.

While the funds raised un­der the pro­posed reau­tho­riza­tion would al­low the FDA to hire more staff and ac­cel­er­ate ap­provals, crit­ics claim that the ris­ing fees dis­pro­por­tion­ately harm smaller com­pa­nies that can­not ac­com­mo­date the fee hike.

Greg Cau­chon, a for­mer research sci­en­tist at Am­gen who now runs the biotech in­cu­ba­tor Ventura BioCen­ter, would rather see the user fees re­moved to cre­ate a level play­ing field, he said.

The fees “merely act to en­trench the larger firms at the ex­pense of smaller ones while pro­vid­ing the pay­ing com­pa­nies with un­due reg­u­la­tory in­flu­ence,” Cau­chon said. “If reg­u­lat­ing the na­tion’s drug sup­ply is im­por­tant enough for the fed­eral govern­ment to do it, they should be able to fund it prop­erly.”

The agency will have to lay off more than 5,000 em­ploy­ees if the agree­ments are not reau­tho­rized be­fore the end of Septem­ber. A reau­tho­riza­tion de­lay also would post­pone the review of many drugs and de­vices.

In his pro­posed 2018 bud­get, Pres­i­dent Don­ald Trump planned to dou­ble the $1 bil­lion in rev­enue the fees gen­er­ate and cut the FDA’s bud­get. Trump vowed to re­form the FDA and its “slow and bur­den­some” ap­proval process.

But that ap­proval process isn’t nearly as slow as Trump claims, ac­cord­ing to the In­for­ma­tion Tech­nol­ogy and Inno-

The amount that user fees would con­trib­ute to the pre­scrip­tion drug review bud­get would in­crease from $718.7 mil­lion in fis­cal 2017 to $878.6 mil­lion in 2018.

va­tion Foun­da­tion. In a Fe­bru­ary re­port, the think tank said the FDA con­sid­ers drug ap­pli­ca­tions quicker than its peer agen­cies, such as the Euro­pean Medicines Agency, in large part due to the pre­scrip­tion drug user-fee agree­ment.

“Oth­ers look to (the FDA) as the gold stan­dard for reg­u­la­tory de­ci­sion­mak­ing. I think that will con­tinue,” said con­sul­tant Ste­wart Ly­man.

The user-fee pro­grams make up a sig­nif­i­cant chunk of the agency’s bud­get— ac­count­ing for 70% of the brand-drug review bud­get, 36% of the med­i­cal-de­vice review bud­get, 75% of the generic-drug review bud­get and 29% of the biosim­i­lar review bud­get in fis­cal 2016.

The amount that user fees would con­trib­ute to the pre­scrip­tion drug review bud­get would in­crease from $718.7 mil­lion in fis­cal 2017 to $878.6 mil­lion in 2018. The agree­ment re­struc­tures the fees to re­duce the ad­min­is­tra­tive bur­den and make fund­ing more pre­dictable. It also changes the fee struc­ture from one-third fa­cil­ity fees, one-third ap­pli­ca­tion fees and onethird prod­uct fees to 20% ap­pli­ca­tion fees and 80% pro­gram fees for ap­proved prod­ucts.

Ul­ti­mately, the drug user fees will im­prove the ef­fi­ciency and pre­dictabil­ity of the agency’s review process, mean­ing doc­tors and pa­tients will be able to ac­cess treat­ments sooner, said Scott Whitaker, CEO of the Advanced Med­i­cal Tech­nol­ogy As­so­ci­a­tion, which rep­re­sents de­vice­mak­ers. The Phar­ma­ceu­ti­cal Research and Man­u­fac­tur­ers of Amer­ica echoed that sen­ti­ment.

The ap­proval time frame changes will help re­duce the FDA’s ex­ten­sive back­log, said David Rosen, a for­mer FDA of­fi­cial and cur­rent head of the FDA reg­u­la­tory prac­tice group at law firm Fo­ley & Lard­ner. Yet he said he hopes the fee hikes don’t pre­vent com­pa­nies from sub­mit­ting new prod­ucts.

De­vice user fees would rise from $130.2 mil­lion in 2017 to $183 mil­lion in 2018 and to $213.7 mil­lion in 2022. The agree­ment al­lows fees to be col­lected for “de novo” de­vices, or ones that don’t pose high risk of in­jury to users. It also es­tab­lishes a pi­lot pro­gram that gives the FDA the author­ity to au­dit and cer­tify labs that con­duct de­vice test­ing to a rec­og­nized stan­dard. Generic-drug user fees would go from $299 mil­lion in 2017 to $493.6 mil­lion in 2018. A new fee struc­ture pro­vides more pre­dictabil­ity for the FDA and flex­i­bil­ity for small busi­ness, ac­cord­ing to the agree­ment.

An in­de­pen­dent fee struc­ture will be ini­ti­ated for biosim­i­lars, with those user fees ris­ing from $20 mil­lion in 2017 to $45 mil­lion in 2018. Ul­ti­mately, Rosen hopes that com­mu­ni­ca­tion im­proves be­tween the agency and healthcare com­pa­nies. It is dif­fi­cult to com­mu­ni­cate with the FDA and re­ceive guid­ance,” he said. “There needs to be some bet­ter mech­a­nism that en­sures the agency re­sponds in a timely man­ner.”

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