House Passes Compromise FDA Reauthorization Measure

The House passed a measure that would reauthorize drug and medical-device user-fee programs for five years and establish new user fees for the Food and Drug Administration’s review of generic drugs and biosimilar products.

“This bill is good for the FDA, it’s good for industry, and it’s good for patients alike,” said Frank Pallone, a Democrat whose district includes the New Brunswick, New Jersey headquarters of Johnson & Johnson. (JNJ)

The legislation, passed by voice vote, also would affect companies like Petach Tikva, Israel-based Teva Pharmaceutical Industries Ltd. (TEVA)

The bill reflects a compromise between earlier Senate and House versions of the reauthorization measure for the FDA. It now returns to the Senate for a final vote.

“This is a bicameral, bipartisan piece of legislation,” Phil Gingrey, a Georgia Republican, said on the House floor.

The bill’s supporters were trying to avoid controversial provisions so that President Barack Obama could sign it before Sept. 30, when user fees are scheduled to expire, and preferably before the Supreme Court issues its ruling this month on the 2010 health-care overhaul.

It would extend and expand industry user fees for FDA programs and would strip out a proposal to require drug companies to put traceable identification numbers on all packaging.

The legislation would raise -- by more than $2 billion from the previous five-year period -- the fees industries pay the FDA for safety and efficacy reviews. Photo: Tomohiro Ohsumi/Bloomberg Close

The legislation would raise -- by more than $2 billion from the previous five-year... Read More

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The legislation would raise -- by more than $2 billion from the previous five-year period -- the fees industries pay the FDA for safety and efficacy reviews. Photo: Tomohiro Ohsumi/Bloomberg

Fee Increase

The legislation would raise -- by more than $2 billion from the previous five-year period -- the fees industries pay the FDA for safety and efficacy reviews. Drugmakers in September and device companies in February agreed to the increases in exchange for more meetings with the FDA throughout the review process that may produce faster product approvals.

Brand-name drugmakers have paid the fees since 1992, and device makers began their system in 2002. The bill adds user fees for generic versions of complex biologic drugs, a process not allowed until passage of the 2010 health-care law.

Canonsburg, Pennsylvania-based Mylan Inc. (MYL), the largest U.S. maker of generic 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 that the FDA has the resources to inspect drug-manufacturing plants located overseas.

The compromise bill also stripped out a Senate provision that would have placed further restrictions on the sale of painkillers such as hydrocodone.

Different Versions

Among the differences between the earlier House and Senate bills was the approach to medical-device regulation. One provision in the compromise agreement mirrors the Senate version by allowing the director of the FDA’s device division to reclassify a device based on administrative order, instead of a more cumbersome rule-making process.

The final language also instructs the FDA to publish a proposed regulation for unique device identifiers by the end of calendar year 2012, finalize those regulations by the fall of 2013 and implement a program within two years of the final rule’s publication date.

The compromise agreement would require the FDA, the Federal Communications Commission, the National Coordinator for Health Information Technology and other third-party stakeholders to collaborate on a report in the next 18 months recommending a regulatory framework for mobile applications and other types of health-information software. Negotiators eliminated Senate language that would have prohibited the FDA from finalizing guidance on mobile medical applications until the report had been published. The FDA issued draft guidance in July.

Antibiotic Incentives

The final bill contains a Senate provision directing the FDA to develop and maintain a list of qualifying pathogens for which new antibiotics could receive an extra five years of market exclusivity. The House bill would have allowed a larger number of antibiotics to qualify.

The removal of a proposal requiring drug companies to put traceable identification numbers on all packaging, also known as track-and-trace, may be considered later in the year as separate legislation. Still, its absence in today’s compromise bill makes its prospects for approval doubtful in the near term.

The bill would reduce federal spending by $311 million through 2022, according to a June 19 estimate by the Congressional Budget Office.

Obama’s fiscal year 2013 budget request called for a 1 percent cut in appropriations for the agency’s drug and device divisions. The House Appropriations Committee’s spending bill for fiscal 2013 calls for a $16 million reduction, or 0.7 percent, in spending for the agency compared with fiscal 2012.

The Supreme Court decision on the 2010 health-care law, expected before the end of the month, could invalidate some or all of Obama’s overhaul and prompt lawmakers to make changes to the FDA bill, which is one of the few pieces of “must-pass” legislation with bipartisan support in this election year.

The bill is S. 3187.

To contact the reporter on this story: Timothy Homan in Washington at thoman1@bloomberg.net

To contact the editor responsible for this story: Katherine Rizzo at krizzo5@bloomberg.net

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