21st Century Cures Act Brings New Research Funding and Changes to the FDA

Arnall Golden Gregory LLP
Last week the Senate passed, nearly unanimously, the 21st Century Cures Act, which President Obama signed on December 13, 2016. The Act is divided into three divisions: 21st Century Cures, Helping Families in Mental Health Crisis, and Increasing Choice, Access, and Quality in Health Care for Americans. The first and primary division includes a slew of additional funding in various areas for public health and research initiatives, and significant regulatory changes to the FDA. The National Institutes of Health will receive over $4.7 billion from 2017 to 2026 tied to three main projects: Precision Medicine, BRAIN Initiative, and Cancer Moonshot. An additional $1 billion will also be available over the next two years for state response to ongoing opioid abuse crisis.

In addition to the funding, the Act also includes both changes to existing FDA regulations and new regulations with the objective of improving the drug development process. Numerous drug regulations are being impacted including trial design, patient access to investigational drugs, and the orphan drug program. Perhaps the most significant changes are those being made to drug development and clinical trial design. Randomized clinical trials historically have been the standard in drug development; however, under the new regulations FDA will also consider patient experience data on the impact of the disease or therapy on a patient’s life and patient treatment preferences. Real world evidence, including safety surveillance and observational studies, will also be considered for the approval of a new indication and to support post-approval study requirements. The shift to patient-focused drug development is a substantial deviation from FDA’s current regulatory approval standards.

Medical device regulations are also impacted by the Act. The humanitarian use program is being expanded and an expedited review program for breakthrough medical devices will be established. The FDA will also receive $500 million in funding specifically tied to enacting its new responsibilities under the Act. However, most of the FDA provisions require the Agency to issue guidance on a particular issue or to develop a new program, which is a significant endeavor. It will likely take some time before the provisions are enacted.

The second division mandates interagency collaboration with the objective of addressing substance abuse disorders and mental health. It also gives more power to the Substance Abuse and Mental Health Services Administration, including the creation of a Chief Medical Officer Position. The last division alters provisions in Medicare Parts A and B. Some implementation dates for existing Medicare initiatives have been delayed and some programs have been expanded. The Act extends the Rural Community Hospital Demonstration Program for five years, expands the program to every state, and also preserves beneficiary choice under Medicare Advantage plans through 2018.

21st Century Cures will have a broad impact over many aspects of our healthcare system, particularly in research and development. We will continue to monitor its implementation and impact.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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