Modern Healthcare

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

- 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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