Increasing User Fees
Most importantly for industry, both bills reauthorize PDUFA and medical device user fees and authorize for the first time user fees for generic small molecule drugs and biosimilars. According to the Congressional Budget Office, the Senate version of PDUFA V will generate $720 million in FY 2013 from prescription drug user fees. That’s most of the total $1.141 billion expected from all user fees during next fiscal year.
Through the authorization period (FY 2013–FY 2017), CBO expects FDA to collect $4.068 billion in prescription drug fees. That accounts for about two-thirds of the roughly $6.4 billion in total user fees projected from the bill, up from $2.9 billion in PDUFA IV, which only included fees for prescription drugs and devices. CBO estimates the new generic user fee will yield $1.575 billion, while the new biosimilar fee is expected to generate $128 million during FY 2013–17 . CBO at deadline had not released findings on the House bill.
Left intact in both bills was much of FDA’s PDUFA V proposal. It pushes back the start of the agency’s first review cycle clock to after its 60-day administrative filing review period. Once the clock starts, FDA is committed to reviewing and acting on 90% of standard applications within 10–12 months from the date of filing and on 90% of priority submissions within six to eight months from date of filing.
Paying heed to industry concerns about inconsistent feedback and predictability, PDUFA V creates a new mid-cycle meeting to which FDA will call an applicant, generally within two weeks after the agency holds its own internal mid-cycle review meeting on an application. FDA hammered out PDUFA V with the Biotechnology Industry Organization (BIO) and Pharmaceutical Research Manuafacturers of America (PhRMA).
Biopharma companies emerge a far greater winner from PDUFA V than from the previous user-fee law, grafted onto the industry-unfriendly Food and Drug Administration Amendments Act of 2007. If there’s one key similarity in this year’s House and Senate bills, it’s the bargaining tool they used with industry: higher user fees than PDUFA IV in return for more development incentives and faster approvals. The goal is the same as five years ago; shepherding safe, effective new medicines for a variety of diseases to the market. It remains to be seen whether Congress will succeed with the carrot where it failed with the stick.