Health Care and FDA and Health Care & Life Sciences and Medical Devices and Health Care & Insurance and Pharmaceutical

FDA’s $6.4B drug review fee plan passes Senate

May 24, 2012

The U.S. Senate voted to let regulators collect on a $6.4 billion fee agreement struck with Indianapolis-based Eli Lilly and Co., Medtronic Inc. and other companies to fund reviews of new drugs and medical devices through 2017.

The legislation, passed by the Senate Thursday in a 96-1 vote, raises the user fees that industries will pay the Food and Drug Administration for safety and efficacy reviews by more than $2 billion from the previous five-year period. The bill is scheduled for a vote in the House of Representatives as early as next week, where it can then move toward becoming law by Oct. 1.

Drugmakers in September and device companies in February agreed to the increased payments in exchange for a promise of faster reviews of products they are trying to bring to market. The bill also includes measures to speed approval of treatments for life-threatening conditions, enhance safety monitoring of devices after clearance and mitigate drug shortages.

“This bill’s passage is a victory for the millions of Americans who need medicines or medical devices and for the kind of cooperation that we see all too rarely in Washington,” said Sens. Tom Harkin, a Democrat from Iowa, and Mike Enzi, a Wyoming Republican, in a statement. The bill will “improve American families’ access to lifesaving drugs and medical devices.”

Brand-name drugmakers will pay $4.1 billion, 6 percent more than the previous five-year period, while fees for device makers will more than double to $609 million, according to the Congressional Budget Office’s cost estimate. Fees from makers of brand-name drugs fund about 60 percent of FDA reviews, while the increase in device payments will support about 35 percent.

Generic-drug companies, which had been exempt from user fees, will pay $1.56 billion. Canonsburg, Penn.-based Mylan Inc., the largest U.S. maker of copycat medicines, led its industry effort to participate in the fee program to quicken review times and deal with a backlog of applications, as well as to ensure the FDA has the resources to inspect foreign plants.

Companies making generic versions of complex biologic drugs, a process not allowed until passage of President Barack Obama’s health law in 2010, will pay a user fee, which the budget office determined would total $128 million through 2017.

Pharmaceutical companies have paid the fees since 1992 and device makers began their system in 2002. The current five-year program must be reauthorized by Oct. 1.

The Food and Drug Administration Safety and Innovation Act, S. 3187, also includes placeholder language to create a national tracking system that senators will complete as they reconcile their bill with the legislation in the House. The effort by Sens. Michael Bennet, a Democrat from Colorado, and Richard Burr, a Republican of North Carolina, would help the FDA better police drugs from manufacturing to distribution to pharmacies.

The senators are negotiating the system with the Pharmaceutical Research and Manufacturers of America. The Washington-based lobbying group for drugmakers such as Pfizer Inc. has supported a tracking system in the past, Kate Connors, a spokeswoman for the organization said in an e-mail.

Senators voted against an amendment from Sen. John McCain, a Republican from Arizona, that would have allowed drug importation from Canada. Senators rejected a similar effort in 2009 to attach language to Obama’s health law allowing cheaper medicines from other countries into the U.S.

“Somebody tell me why we can’t tell the struggling family they can use their own money to purchase safe drugs from a Canadian pharmacy at sometimes 50 percent less,” McCain said during debate Thursday before his amendment was voted down.

Border agents can’t ensure only drugs from approved Canadian pharmacies make it into the U.S., Sen. Robert Menendez, a New Jersey Democrat, said.

The pharmaceutical lobbying organization agreed to contribute $80 billion over 10 years in support of the health law in exchange for protections against importation.

The FDA allowed for temporary importation of unapproved foreign drugs from India in February to give ovarian cancer and multiple myeloma patients access to the Johnson & Johnson drug Doxil, which was in short supply after the New Brunswick, N.J.-based company’s contract manufacturer said it planned to get out of the business. The FDA only relies on foreign sources when it can’t resolve a shortage with already approved drugs.

Senators shot down an amendment from Sen. Richard Durbin, a Democrat from Illinois, that would have required dietary supplement makers to register their products with the FDA, including a list of ingredients. Durbin called in April for caffeine limits on energy drinks such as Coca-Cola Co.’s Full Throttle and PepsiCo Inc.’s AMP energy because of the potential health risks from overconsumption.

An amendment from Sen. Jack Reed, a Democrat from Rhode Island, to make the FDA enforce regulations on labeling and testing of over-the-counter sunscreen starting Dec. 17 was successfully attached to the bill. The label changes include banning the words “sweatproof” and “waterproof” and requiring products with sun protection factors, or SPFs, below 15 to state that they don’t prevent skin cancer or early aging.

The FDA, which intended to require compliance with the changes by June, said May 11 it would delay the compliance dates for at least six months. The agency cited estimates from the Personal Care Products Council and the Consumer Healthcare Products Association that demonstrated companies’ need for more time to re-label and test the products.

The legislation also requires companies to report potential drug shortages to give regulators time to find alternate sources. Shortages, including cancer treatments, almost tripled to 178 in 2010 from 61 in 2005, according to a FDA report released in October.

FDA Meetings

In addition, device companies, including Minneapolis-based Medtronic, and drugmakers obtained additional meetings with the FDA throughout the review process so companies can attempt to deal with concerns rather than receive a rejection letter. The legislation also directs the agency to help companies with medicines for life-threatening diseases plan clinical development programs that will most likely gain speedy approval.

Lawmakers sought to adjust device oversight, requiring post-market studies and pushing the FDA to implement a system to electronically track devices.

The House plans to take up its bill the week of May 28, Laena Fallon, a spokeswoman for House Majority Leader Eric Cantor, a Virginia Republican, said in an e-mail.

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