CBO finds Sen­ate's FDA user fee bill will re­duce the fed­er­al deficit by about $1.4B

As de­bate rages on Capi­tol Hill over whether to add rid­ers, and which rid­ers to add, to the must-pass FDA user fee leg­is­la­tion, the Con­gres­sion­al Bud­get Of­fice on Thurs­day made clear that the Sen­ate ver­sion will re­duce the fed­er­al deficit by about $1.4 bil­lion over the next 10 years.

Chad Land­mon

Con­gress has un­til the end of Sep­tem­ber to reau­tho­rize the user fees, which the FDA col­lects for its re­view of pre­scrip­tion drugs, gener­ics, biosim­i­lars and med­ical de­vices.

While there are still ma­jor gaps be­tween the Sen­ate and House ver­sions, and health com­mit­tee rank­ing mem­ber Richard Burr (R-NC) re­cent­ly in­tro­duced a blank ver­sion of the bill with no rid­ers, many ex­pect the user fee bills will still get done on time.

“I gen­er­al­ly still think that a user fee deal will get done be­fore the end of Sep­tem­ber giv­en that there is broad, bi­par­ti­san sup­port for user fees,” Chad Land­mon, part­ner at the law firm Ax­inn, Vel­trop & Harkrid­er, told End­points News via email, adding:

there’s still a lot of dis­tance be­tween the House and Sen­ate bills, and there is a lot of po­lit­i­cal pres­sure on the Biden Ad­min­is­tra­tion and De­moc­rats in Con­gress to ad­dress drug costs more broad­ly. So, it’s al­ways pos­si­ble that the po­lit­i­cal pres­sure and dis­putes over oth­er pol­i­cy is­sues get in the way and de­lays the pas­sage of user fee leg­is­la­tion. But, I think the gen­er­al con­sen­sus by pol­i­cy­mak­ers and in­dus­try that user fees have had a pos­i­tive im­pact on FDA’s abil­i­ty to do its job will hope­ful­ly over­come oth­er, com­pet­ing con­cerns.

In un­veil­ing its deficit-re­duc­ing score, CBO points to five key sec­tions of the bill, known as S.4348 or the FDASLA Act of 2022, that will have the biggest im­pact.

First, the non-par­ti­san or­ga­ni­za­tion point­ed to Sec­tion 509, which would au­tho­rize the FDA to ap­prove a gener­ic drug ap­pli­ca­tion (AN­DA) even if the la­bel dif­fers from that of the brand name prod­uct when the brand-name la­bel changes with­in 90 days of the date on which the gener­ic ap­pli­ca­tion would oth­er­wise have been el­i­gi­ble for ap­proval.

The spon­sor of the gener­ic would still be re­quired to up­date that drug’s la­bel with­in 60 days of ap­proval, but based on con­ver­sa­tions with stake­hold­ers, “CBO ex­pects that the pro­vi­sion would ac­cel­er­ate the avail­abil­i­ty of low­er-priced gener­ic drugs be­cause man­u­fac­tur­ers would bring them to mar­ket ear­li­er than un­der cur­rent law,” there­by re­duc­ing the av­er­age prices for those drugs that are paid for by fed­er­al health pro­grams.

In an­oth­er move to ac­cel­er­ate the avail­abil­i­ty of low­er-priced drugs, sec­tion 511 of FDASLA would al­low the FDA to de­ny a cit­i­zen pe­ti­tion if it de­ter­mines that the pe­ti­tion was sub­mit­ted with the pri­ma­ry pur­pose of de­lay­ing the ap­proval of an ap­pli­ca­tion or if it doesn’t raise valid sci­en­tif­ic or reg­u­la­to­ry is­sues. These types of pe­ti­tions are fre­quent­ly sub­mit­ted and used as a de­lay­ing tac­tic when gener­ic drugs are read­ied for launch.

The bill al­so would re­quire a pe­ti­tion to be sub­mit­ted with­in 60 days af­ter the pe­ti­tion­er knew, or rea­son­ably should have known, the in­for­ma­tion that forms the ba­sis of the pe­ti­tion, there­by push­ing com­pa­nies away from fil­ing these pe­ti­tions at the last minute.

“CBO ex­pects that the new time­ly-sub­mis­sion re­quire­ment and re­lat­ed changes to the dis­missal pro­ce­dures in­volv­ing civ­il ac­tions would fur­ther en­hance the FDA’s abil­i­ty to ex­pe­di­tious­ly de­ny pe­ti­tions that oth­er­wise would have de­layed the mar­ket­ing ap­proval of gener­ic or biosim­i­lar ap­pli­ca­tions,” the CBO said.

Sec­tion 512 of the Sen­ate bill, high­light­ed by CBO, would al­so ac­cel­er­ate the avail­abil­i­ty of low­er-priced gener­ic drugs, there­by sav­ing the gov­ern­ment mon­ey, as it would au­tho­rize the FDA to dis­close qual­i­ta­tive and quan­ti­ta­tive in­for­ma­tion on the in­ac­tive in­gre­di­ents of the brand-name drug in re­sponse to a re­quest in a con­trolled cor­re­spon­dence from a gener­ic drug man­u­fac­tur­er.

Kurt Karst

An­oth­er con­tro­ver­sial sec­tion, sec­tion 515, would al­low the FDA to ap­prove a sub­se­quent AN­DA, un­der cer­tain con­di­tions, if the first ap­pli­cant that is el­i­gi­ble for 180 days of gener­ic mar­ket ex­clu­siv­i­ty has not yet be­gun mar­ket­ing.

While the CBO ex­pects that the pro­vi­sion would ac­cel­er­ate the avail­abil­i­ty of low­er-priced gener­ic drugs be­cause man­u­fac­tur­ers would bring them to mar­ket ear­li­er than un­der cur­rent law, gener­ic drug ex­perts think this sec­tion might do the re­verse.

Kurt Karst, reg­u­la­to­ry coun­sel at Hy­man, Phelps & Mc­Na­ma­ra, pre­vi­ous­ly told End­points that this pro­vi­sion could cre­ate new lit­i­ga­tion.

“This new pro­vi­sion cre­ates an ex­cep­tion to 180-day ex­clu­siv­i­ty to al­low a sub­se­quent ap­pli­cant to, in a sense, leapfrog in­to first ap­pli­cant sta­tus al­most, and be able to get ap­proved. Notwith­stand­ing a first ap­pli­cant’s ex­clu­siv­i­ty sub­ject to a se­ries of five events. Some of them are sub­ject to quite a bit of dis­cre­tion and any­time the D word comes up, that of­ten­times means the L word, right? The law­suit,” he said dur­ing a re­cent End­points pan­el dis­cus­sion on the user fee bill.

And CBO point­ed to Sec­tion 605 of the bill, which would reau­tho­rize through 2027 a pro­vi­sion that may slight­ly in­crease the deficit over 10 years and al­lows spon­sors of drugs de­vel­oped from a par­tic­u­lar type of mol­e­cule called an enan­tiomer to gain five years of da­ta ex­clu­siv­i­ty un­der cer­tain cir­cum­stances.

Un­der cur­rent law, the CBO says, the “max­i­mum pe­ri­od of da­ta ex­clu­siv­i­ty would re­vert to 3 years in 2023. (Da­ta ex­clu­siv­i­ty be­gins when a drug is ap­proved by the FDA. Dur­ing that time, the agency does not ac­cept ap­pli­ca­tions for mar­ket­ing ap­proval for gener­ic ver­sions of the drug.) Based on his­tor­i­cal da­ta, CBO ex­pects that ex­tend­ing mar­ket ex­clu­siv­i­ty for pre­scrip­tion drugs de­vel­oped from enan­tiomers would, in some cas­es, de­lay the en­try of low­er-priced gener­ic ver­sions of those drugs.”

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FDA commissioner Rob Califf (Tom Williams/CQ Roll Call via AP Images)

With drug pric­ing al­most done, Con­gress looks to wrap up FDA user fee leg­is­la­tion

The Senate won’t return from its summer recess until Sept. 6, but when it does, it officially has 18 business days to finalize the reauthorization of the FDA user fee programs for the next 5 years, or else thousands of drug and biologics reviewers will be laid off and PDUFA dates will vanish in the interim.

FDA commissioner Rob Califf recently sent agency staff a memo explaining how, “Our latest estimates are that we have carryover for PDUFA [Prescription Drug User Fee Act], the user fee funding program that will run out of funding first, to cover only about 5 weeks into the next fiscal year.”

Pascal Soriot, AstraZeneca CEO (David Zorrakino/Europa Press via AP Images)

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