Congressional Committees Advance Bipartisan FDA User Fee Agreements

Baker Donelson

Baker Donelson

On May 11 and June 7, the Senate HELP Committee and House Energy and Commerce Committee, respectively, both advanced bipartisan legislation to reauthorize four different user fee agreements that account for over a quarter of the FDA's overall funding. The legislation, titled "The Food and Drug Reauthorization Act of 2017," would update and reauthorize the 2012 Prescription Drug User Fee Amendments (PDUFA), Medical Device User Fee Amendments (MDUFA), Generic Drug User Fee Amendments (GDUFA) and Biosimilar User Fee Act (BsUFA), which all expire at the end of the fiscal year (September 30, 2017). The user fee agreements govern the FDA's authority to collect fees from drug and device manufacturers to fund the agency's drug approval process.

The bipartisan user fee reauthorization package reflects over a year of work in Congress and closely follows agreements reached last year between the Obama Administration FDA and the drug and device industries. Notably, the Trump Administration weighed in last month urging Congress to restructure those agreements. Department of Health and Human Services Secretary Tom Price wrote a letter on May 15 to HELP Committee Chairman Alexander and Ranking Member Senator Patty Murray (D-WA), and Energy and Commerce Committee Chairman Greg Walden (R-OR) and Ranking Member Representative Frank Pallone (D-NJ) requesting that Congress increase industry fees to fund 100 percent of costs for premarket review and approval activities for the FDA user fee programs. The President's FY18 Budget proposal, released on May 22, included this same proposal. This policy would represent a significant shift from the Obama Administration user fee agreements with industry.

Thus far, the Committees have not embraced the Trump Administration's proposal. Chairman Alexander stated that the Trump Administration's request "can be considered the next time the FDA negotiates the user fee agreements with the manufacturers of drugs and devices, but it is way too late to have an impact on this year's agreements."

Takeaway: Given bipartisan agreements have already been advanced by both Committees of primary jurisdiction, Congress is unlikely to renegotiate the five-year user fee agreements this year. Congress faces a narrow window to pass the user fee reauthorization package. If the agreements are not reauthorized before August, the FDA would be forced to send 60-day layoff notices to more than 5,000 employees indicating that they may lose their job after October 1, 2017. Congress is expected to vote on the final FDA user fee agreements in July.

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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