Senate, House Draft Reauthorization Bill to Increase Drug, Medical Device User Fees

Posted 14 April 2017 By Zachary Brennan

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With an aim to avoid thousands of US Food and Drug Administration (FDA) employee layoffs, House and Senate committees on Friday released a draft bill to reauthorize the user fee programs for pharmaceuticals, generic drugs, medical devices and biosimilars from 2018 to 2022.

Forged via negotiations between FDA and the various industries dating back to 2015, and racing to beat a September deadline, the bills sequentially increase the amount of user fees FDA can assess for reviewing new products and other integral tasks. In FY2016, user fees accounted for 70% of the drug review budget, 36% of the medical device review budget, 75% of the generic drug review budget and 29% of the biosimilar review budget.

Under the draft, prescription drugs would see increases in the base user fee amount from $718.7 million in FY2017 to $878.6 million in FY2018.

Device user fees would also see a rise from the FY2017 base of $130.2 million to $183 million in FY2018, which is slightly higher than what was discussed in a draft in October 2016, and later the bill would increase levels to $213.7 million in FY2022.

Generic drug user fees would also rise from $299 million in FY2017 to $493.6 million in FY2018, while biosimilars would see increases from $20 million to $45 million.

In total, the bill would add about $400 million in new user fees for the first year, which compares with a $1 billion increase in fees President Donald Trump requested in his budget blueprint, though this bill does not include animal drug and animal generic drug user fees.

Andrew Powaleny, director of public affairs at industry group PhRMA, told Focus: “Reauthorization of PDUFA [Prescription Drug User Fee Act] is critical to ensuring America’s biopharmaceutical companies can continue scientific innovation and bring new treatments to help patients live longer, healthier lives. While we are reviewing the legislation, PhRMA applauds the House and Senate Committees for their leadership in advancing efforts to ensure a timely reauthorization of this important program.”

Prescription Drug Specifics

The bill shifts the fee structure as historically, fees were derived one-third from facility fees, one-third from various application fees, and one-third from product fees. The new structure would divide the fees between 20% for application fees and 80% for program fees for approved products. Supplemental application fees and facility fees would be eliminated.

Devices

As part of its work with the increased funding, FDA would establish a pilot to sunset in 2022 that would see the agency beginning “to audit and certify laboratories who conduct device conformance testing to a recognized standard, and also to withdraw the certification if necessary.”

The bill also requires FDA to evaluate the use of this pilot in at least five device types, or device parts that are found in multiple devices, and it requires public input on the pilot’s development.

And a new term, a “de novo classification request,” would enable new fees specifically for reviews of low-to-moderate-risk devices that are the first of their kind.

Generics

The bill explains that the generic drug applicant program fee is determined by how many applications the applicant has approved by FDA.

A manufacturer with 20 or more approved applications pays the full fee; a manufacturer with six approved applications pays 40% of the full fee; and a manufacturer with five or fewer approved applications pays 10%.

Biosimilars

The bill also establishes an independent fee structure for biosimilars for the first time based on the following types of fees: “Initial Biosimilar Development Fee,” for the first year once a sponsor begins clinical trials; “Annual Biosimilar Development Fee,” for subsequent years a sponsor is developing a new biosimilar; “Biosimilar Program Fee,” for sponsors of approved biosimilars; and “Application Fee” for new biosimilar applications.

Other Highlights

The bill reauthorizes FDA’s authority to issue grants for orphan drug development until 2022, allow pediatric humanitarian device exceptions, continue to enforce rules on the development of devices for rare pediatric conditions until 2022, and would reauthorize the Critical Path public-private partnership for an additional five years at current authorization levels.

The draft would also require all submissions to FDA to be in electronic format by 1 October 2021, though the Secretary of the Department of Health and Human Services has the authority to extend the deadline to 1 April 2023.

Draft Discussion Bill for FDA Reauthorization Act of 2017: Summary

Text of the Draft

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Categories: Active pharmaceutical ingredients, Biologics and biotechnology, Combination products, Drugs, Medical Devices, Due Diligence, Government affairs, Regulatory strategy, Regulatory intelligence, News, US, FDA

Tags: user fee reauthorization, FDA user fees, drug review fees

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