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May 23, 2012

FDA Reform Legislation Emerges as Exception to Washington Gridlock

Bill includes reauthorization of PDUFA, which adds fees for generic and biosimilar developers.

FDA Reform Legislation Emerges as Exception to Washington Gridlock

Progress on PDUFA V reflects lawmakers’ desire to keep FDA’s drug review operations humming past the September 30 expiration of the current PDUFA authorization.

  • The fifth five-year authorization of the Prescription Drug User Fee Act (PDUFA V) is shaping up as a welcome exception to the rule that in a presidential election year, Congress cannot get much of anything done until after the votes are counted in November. Well before Election Day, the Senate and House of Representatives are expected to hammer out and pass a single FDA reform bill that includes PDUFA V.

    “We need to enact this user fee bill by the end of June. We are on track to accomplish this goal,” Rep. Fred Upton (R-MI), chairman of the House Energy and Commerce (E&C) Committee, said. He has called for sending a bill to President Barack Obama before July 4. The Senate moved its bill onto its calendar for floor action and began debate on the measure May 22; the House is expected to do likewise.

    The Senate and House have produced two very similar versions in recent weeks. “I would say it’s pretty surprising how significantly they lined up,” Nancy Bradish Myers, president/founder of Catalyst Healthcare Consulting, told GEN. “The politicians realized that each one of these user fee agreements had good agreement between the agency and industry. They realized that with an election year, if they wanted to go home and claim to have done something significant on the healthcare front that actually helps people get the medicines they need, that a bipartisan agreement needed to be done carefully and quickly.”

    That explains why lawmakers held off from offering many amendments and why few involving drug user fees should be expected during House and Senate floor debate. The House avoided a showdown with the Senate by backtracking from amending FDA’s mission to include “promoting economic growth, innovation, competitiveness, and job creation.” The change was sought by some House Republicans, who argued FDA needs to better balance economic considerations with safety concerns. The agency and Democrats opposed the change, saying FDA shouldn’t base decisions on how they will affect companies and jobs.

  • Election-Year Politics

    Progress on PDUFA V indeed reflects lawmakers’ desire to keep FDA’s drug review operations humming past the September 30 expiration of the current fourth PDUFA authorization. PDUFA V would fund 2,599 full-time equivalent (FTE) staffers, while 450 FTEs will be supported through a new generic drug user fee and 72 through a new biosimilars user fee. Nobody in Congress wants blame for losing jobs.

    Lawmakers also wish to show that Congress can accomplish something beyond partisan sniping. After contributions to President Obama ($202,891) and Governor Mitt Romney ($160,910), the most campaign cash for 2011–2012 (as of April 30) from biopharma PACs and contributors of $200 or more was the $114,865 received by Upton, according to OpenSecrets.org.

    Whatever the motivation, House E&C on May 10 unanimously approved PDUFA V within an FDA bill called the Food and Drug Administration Reform Act (HR 5651). The 46–0 vote came two days after markup by E&C’s subcommittee on health and two weeks after the Senate Health, Education, Labor and Pensions Committee approved its own FDA bill, the Food and Drug Administration Safety and Innovation Act (S.2516).

  • New Drug Designations

    The House and Senate bills contain remarkable similarities. Both bills reauthorize two pediatric drug measures set to expire this year, the Best Pharmaceuticals for Children Act and the Pediatric Research Equity Act. Both suggest designating as “breakthrough” therapies drugs that alone or in tandem with other drugs treat a serious or life-threatening disease where preliminary clinical evidence indicates that the drug provides “substantial improvement over existing therapies on one or more clinically significant endpoints such as substantial treatment effects observed early in clinical development.”

    That standard of preliminary clinical evidence sounds similar in spirit to today’s fast-track designation, which does not currently include “life-threatening diseases.” The House and Senate bills both expand fast track, however, to include “serious or life-threatening diseases or conditions.” The House bill explicitly adds, “including those for rare diseases or conditions, using a broad range of surrogate or clinical endpoints and modern scientific tools earlier in the drug development cycle when appropriate.”

    Both chambers include rare diseases as among topics that must be considered in future fast-track guidance. To implement “breakthrough regulation,” there is an 18-month period set for drafting written guidance. These guidances can’t come fast enough, because adding life-threatening to the definition of fast track creates a designation that isn’t too much different from the new “breakthrough” therapies designation. It’s hard to quantify standards like “some advantage over available treatment” (in language for breakthrough designation) and “substantial improvement over existing therapies” (in language for fast-track designation). FDA, and especially sponsors, need specifics that clearly distinguish between the fast-track and breakthrough designations.

  • Incentives for Antibiotics

    The House and Senate bills have slightly differing incentives for manufacturers of antibiotics. Both bills extend the market exclusivity period for new antimicrobial drugs by five years and grant six additional months of data exclusivity for antibiotics with companion diagnostics; antibiotics currently enjoy between three and seven years of market exclusivity. Both define qualifying pathogens drugs almost identically, though the Senate names Clostridium difficile among them, while the House has a broadly written catchall clause: “any other infectious pathogen identified for purposes of this section by the Secretary.”

    That House language should be incorporated in the eventual final bill, since pathogens can emerge in the future that are not currently known. To be fair, the Senate requires FDA every five years to review and modify the list of qualifying pathogens. Why go through the exercise when a single catchall clause can address that concern once and for all?

    The Senate wisely allows sponsors to request that FDA designate a candidate as a qualified infectious disease product “at any time before the submission of an application.” This gives drug makers more flexibility than the House’s stipulation “but not later than 45 days before the submission of such application.” The House gives FDA 30 days to make its determination, compared with 60 days in the Senate bill. The Senate gives FDA two years to craft implementing regulations versus one year by the House.

    Both bills require the Government Accounting Office to study the need for incentives to encourage R&D of biological antibiotics within a year of enactment. That allows both chambers to avoid the delay that would inevitably come with hammering out those incentives through legislation.

  • 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.


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