White House dou­bles down on call to fund FDA en­tire­ly with in­dus­try fees

WASH­ING­TON, DC — Fol­low­ing the House of Rep­re­sen­ta­tives’ pas­sage of the bill to reau­tho­rize FDA user fees on Wednes­day, the White House dou­bled down on its ear­li­er call to amend the agree­ments so that FDA is en­tire­ly fund­ed by med­ical prod­ucts in­dus­tries.

“The Ad­min­is­tra­tion urges the Con­gress to pro­vide for 100 per­cent user fee fund­ing with­in the reau­tho­rized pro­grams,” the White House said in a state­ment. “In an era of re­newed fis­cal re­straint, in­dus­tries that ben­e­fit di­rect­ly from FDA’s work should pay for it.”

In May, Pres­i­dent Don­ald Trump re­leased his bud­get pro­pos­al, which was the first time the Ad­min­is­tra­tion called to elim­i­nate all ap­pro­pri­a­tions for FDA and fund the agency en­tire­ly with in­dus­try fees.

Wednes­day’s state­ment al­so says the Trump Ad­min­is­tra­tion is “con­cerned with cer­tain oth­er pro­vi­sions in the bill, such as those pro­vid­ing ad­di­tion­al mar­ket ex­clu­siv­i­ty to man­u­fac­tur­ers, which could make ex­clu­siv­i­ty un­pre­dictable and de­crease com­pe­ti­tion.”

Sec­tion 703 of the bill is cur­rent­ly the on­ly one that ad­dress­es mar­ket ex­clu­siv­i­ty, but it “pro­vides a pe­ri­od of 180-day mar­ket ex­clu­siv­i­ty to cer­tain gener­ic drug man­u­fac­tur­ers that en­ter the mar­ket where there is cur­rent­ly no block­ing patents or ex­clu­siv­i­ties, in­cen­tiviz­ing gener­ic drug man­u­fac­tur­ers to com­pete with off-patent drugs.”

In short: that sec­tion aims to in­crease com­pe­ti­tion and low­er costs by in­cen­tiviz­ing the de­vel­op­ment of new gener­ic drugs for which brand name ref­er­ence prod­ucts have a mo­nop­oly.

The Ad­min­is­tra­tion’s pre­vi­ous com­ments to de­rail the user fee agree­ments were not well re­ceived by mem­bers of Con­gress on ei­ther side of the aisle.

At both House and Sen­ate com­mit­tee hear­ings on the bill there was bi­par­ti­san agree­ment that FDA should not be en­tire­ly fund­ed by in­dus­try fees and that the agree­ments forged over the last two years be­tween in­dus­try and FDA should be what is in­clud­ed in the reau­tho­riza­tion.

But some on the Sen­ate side are still push­ing for add-ons in the eleventh hour.

Brit­tni Palke, press sec­re­tary for Sen. Ron John­son (R-WI), con­firmed to Fo­cus on Thurs­day that the sen­a­tor “plans to hold up the FDA bill un­less it con­tains Right to Try leg­is­la­tion,” which is al­so sup­port­ed by Pres­i­dent Trump.

Sec­tion-by-Sec­tion Analy­sis of House Bill

Al­so on Wednes­day, the House re­leased its full re­port on the FDA Reau­tho­riza­tion Act of 2017, of­fer­ing a break­down of what each sec­tion of the bill would do. Here’s a re­cap of some of the sec­tion sum­maries with sig­nif­i­cant changes from years past, cat­e­go­rized by the type of med­ical prod­uct.


Sec­tion 202 adds the term “de no­vo clas­si­fi­ca­tion re­quest” to en­able new user fees to be col­lect­ed by FDA to specif­i­cal­ly re­view de no­vo med­ical de­vice clas­si­fi­ca­tion re­quests.

Sec­tion 205 es­tab­lish­es a pi­lot pro­gram, to sun­set in 2022, to pro­vide FDA with the au­thor­i­ty to au­dit and cer­ti­fy lab­o­ra­to­ries that con­duct de­vice con­for­mance test­ing to a rec­og­nized stan­dard, and al­so to with­draw the cer­ti­fi­ca­tion if nec­es­sary. FDA is re­quired to eval­u­ate the use of this scheme in at least five de­vice types, or de­vice parts that are found in mul­ti­ple de­vices, and the agency is al­so re­quired to ob­tain pub­lic in­put on the pi­lot’s de­vel­op­ment.

Sec­tion 206 reau­tho­rizes and pro­vides flex­i­bil­i­ty to bet­ter tar­get which de­vice types are most ap­pro­pri­ate for third-par­ty re­view. The sec­tion al­so re­quires a pub­lic guid­ance de­vel­op­ment process to iden­ti­fy the fac­tors to de­ter­mine which de­vices are el­i­gi­ble.

Sec­tion 207 re­quires all de­vice sub­mis­sions to be in elec­tron­ic for­mat by 1 Oc­to­ber 2021, though that date can be ex­tend­ed to as late as 1 April 2023.

Sec­tion 601 re­quires FDA to in­spect med­ical de­vice es­tab­lish­ments us­ing a risk-based in­spec­tion sched­ule.

Sec­tion 603 es­tab­lish­es stan­dards to im­prove pre­dictabil­i­ty for sched­uled (not for-cause) in­spec­tions for med­ical de­vice fa­cil­i­ties.

Sec­tion 604 clar­i­fies the process for the is­suance of for­eign ex­port cer­tifi­cates for de­vices and es­tab­lish­es a path­way by which man­u­fac­tur­ers de­nied a cer­tifi­cate can present in­for­ma­tion and work with FDA to cor­rect out­stand­ing is­sues.

Sec­tion 613 re­quires FDA to pro­mul­gate reg­u­la­tions to es­tab­lish a cat­e­go­ry of over-the-counter hear­ing aids. “In do­ing so, FDA should con­sult with rel­e­vant stake­hold­ers, in­clud­ing hear­ing aid man­u­fac­tur­ers, li­censed hear­ing pro­fes­sion­als, pa­tients, and oth­ers, dur­ing the rule­mak­ing process,” the sum­ma­ry says.

Sec­tion 614 re­quires FDA to is­sue a re­port on how the agency in­tends to en­sure the qual­i­ty, safe­ty and ef­fec­tive­ness of de­vices that have been ser­viced, as well as whether FDA’s cur­rent au­thor­i­ty is suf­fi­cient to over­see and reg­u­late ser­vic­ing or whether ad­di­tion­al au­thor­i­ty is nec­es­sary.

Sec­tion 615 cre­ates a new vol­un­tary pi­lot pro­gram for de­vice man­u­fac­tur­ers who wish to meet FDA re­port­ing or post­mar­ket study re­quire­ments us­ing ac­tive sur­veil­lance.

Sec­tion 616 clar­i­fies a process by which FDA clas­si­fies med­ical de­vice ac­ces­sories based on the in­tend­ed use of the ac­ces­so­ry.

Sec­tion 801 al­lows FDA to ap­prove an imag­ing de­vice “with the use of a con­trast agent as long as the con­trast agent is used at the same dose, in the same pa­tient pop­u­la­tion, with the same type of imag­ing tech­nol­o­gy, and does not pose any ad­di­tion­al safe­ty risk.”

Sec­tion 802 clar­i­fies that a con­trast agent for which an ap­pli­ca­tion has been ap­proved may be ap­proved for a new in­di­ca­tion or con­di­tion fol­low­ing the au­tho­riza­tion of a pre­mar­ket sub­mis­sion for an ap­plic­a­ble med­ical imag­ing de­vice for that use.


Sec­tion 303 up­dates the gener­ic drug user fee struc­ture to pro­vide more pre­dictabil­i­ty for FDA and flex­i­bil­i­ty for small busi­ness­es. The sec­tion re­moves the fees for pri­or ap­proval sup­ple­ments and es­tab­lish­es a gener­ic drug ap­pli­cant pro­gram fee.

Sec­tion 701 re­quires FDA to ex­pe­dite the re­view and de­vel­op­ment of gener­ic drugs if there is not more than one ap­proved ver­sion of the drug ac­tive­ly be­ing mar­ket­ed.

Sec­tion 702 im­proves com­mu­ni­ca­tion be­tween FDA and gener­ic drug ap­pli­ca­tion spon­sors about the cat­e­gor­i­cal sta­tus of their ap­pli­ca­tions.

Sec­tion 703 pro­vides a pe­ri­od of 180-day mar­ket ex­clu­siv­i­ty to cer­tain gener­ic drug man­u­fac­tur­ers that en­ter the mar­ket where there is cur­rent­ly no block­ing patents or ex­clu­siv­i­ties, in­cen­tiviz­ing gener­ic drug man­u­fac­tur­ers to com­pete with off-patent drugs.

Sec­tion 705 di­rects the Gov­ern­ment Ac­count­abil­i­ty Of­fice (GAO) to is­sue a re­port on the rate of gener­ic drug ap­pli­ca­tions that are ap­proved on the first re­view cy­cle and re­lat­ed is­sues.


Sec­tion 403 es­tab­lish­es an in­de­pen­dent fee struc­ture for biosim­i­lars for the first time based on an “Ini­tial Biosim­i­lar De­vel­op­ment Fee,” an “An­nu­al Biosim­i­lar De­vel­op­ment Fee,” a “Biosim­i­lar Pro­gram Fee” for spon­sors of ap­proved biosim­i­lars and an ap­pli­ca­tion fee.

Pre­scrip­tion Drugs, Pri­or­i­ty Re­view Vouch­ers and Oth­er Pro­vi­sions

Sec­tion 504 “rais­es the penal­ties for know­ing­ly mak­ing, sell­ing or dis­pens­ing, or hold­ing for sale or dis­pens­ing, a coun­ter­feit drug to con­form with the penal­ties for il­le­gal­ly di­vert­ing drugs.”

Sec­tion 505 “ex­press­es a Sense of Con­gress that the Sec­re­tary of HHS should com­mit to en­gag­ing with Con­gress on ad­min­is­tra­tive ac­tions and leg­isla­tive changes to low­er the cost of pre­scrip­tion drugs.”

Sec­tion 605 al­lows FDA to rec­og­nize au­di­tors used by for­eign gov­ern­ments to im­prove in­ter­na­tion­al har­mo­niza­tion of in­spec­tion stan­dards and in­crease FDA ac­cess to au­dit da­ta.

Sec­tion 704 clar­i­fies the qual­i­fy­ing cri­te­ria for com­pa­nies re­ceiv­ing a ne­glect­ed trop­i­cal dis­eases pri­or­i­ty re­view vouch­er to en­sure the PRV is award­ed to spon­sors that con­duct new clin­i­cal in­ves­ti­ga­tions nec­es­sary for FDA ap­proval.

Sec­tion 902 reau­tho­rizes the crit­i­cal path pub­lic-pri­vate part­ner­ship for an ad­di­tion­al five years at cur­rent law au­tho­riza­tion lev­els.

First pub­lished here. Reg­u­la­to­ry Fo­cus is the flag­ship on­line pub­li­ca­tion of the Reg­u­la­to­ry Af­fairs Pro­fes­sion­als So­ci­ety (RAPS), the largest glob­al or­ga­ni­za­tion of and for those in­volved with the reg­u­la­tion of health­care and re­lat­ed prod­ucts, in­clud­ing med­ical de­vices, phar­ma­ceu­ti­cals, bi­o­log­ics and nu­tri­tion­al prod­ucts. Email news@raps.org for more in­for­ma­tion.

Im­age: Daniel Schwen


Zachary Brennan

managing editor, RAPS

Brent Saunders [Getty Photos]

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan — spelling out $1B in R&D cuts

Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

Endpoints News

Basic subscription required

Unlock this story instantly and join 53,600+ biopharma pros reading Endpoints daily — and it's free.

Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three ma­jor buy­outs an­nounced: Take­da/Shire; Bris­tol-My­ers/Cel­gene and now Ab­b­Vie/Al­ler­gan. And with this lat­est deal it’s in­creas­ing­ly clear that the sharp fall from grace suf­fered by high-pro­file play­ers which have seen their share prices blast­ed has cre­at­ed an open­ing for the growth play­ers in big phar­ma to up their game — in sharp con­trast to the pop­u­lar bolt-on deals that have been dri­ving the growth strat­e­gy at No­var­tis, Mer­ck, Roche and oth­ers.

Endpoints News

Basic subscription required

Unlock this story instantly and join 53,600+ biopharma pros reading Endpoints daily — and it's free.

The top 15 mega-deals in bio­phar­ma: Ab­b­Vie and Bris­tol-My­ers ac­qui­si­tions stir fresh de­bate over what's too big to buy

The debate over what’s too big to buy in biotech is back. A number of top analysts went right after AbbVie’s rationale for the Allergan deal today, just as Bristol-Myers Squibb stirred immediate debate over the worth and wisdom of acquiring Celgene.

To help provide some added context to this discussion, we asked DealForma chief Chris Dokomajilar to look over the past decade of major M&A in biopharma to decipher the top 15 plays.

The new numbers, unadjusted for inflation, harken back to the days of the Pfizer-Wyeth buyout and Merck’s decision to absorb Schering-Plough — both triggered in 2009. The heat over those acquisitions made the big pharma mega-deal highly unpopular for most everyone — except Pfizer — as industry leaders swore off almost all but the handy bolt-on acquisition.

Until recently.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

UP­DAT­ED: In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from revealing its checkpoint inhibitor Opdivo blew a big liver cancer study on Monday, Bristol-Myers Squibb said its plans to swallow Celgene will require the sale of blockbuster psoriasis treatment Otezla to keep the Federal Trade Commission (FTC) at bay.

The announcement — which has potentially delayed the completion of the takeover to early 2020 — irked investors, triggering the New York-based drugmaker’s shares to tumble Monday morning in premarket trading.

Celgene’s Otezla, approved in 2014 for psoriasis and psoriatic arthritis, is a rising star. It generated global sales of $1.6 billion last year, up from the nearly $1.3 billion in 2017. Apart from the partial overlap of Bristol-Myers injectable Orencia, the company’s rival oral TYK2 psoriasis drug is in late-stage development, after the firm posted encouraging mid-stage data on the drug, BMS-986165, last fall. With Monday’s decision, it appears Bristol-Myers is favoring its experimental drug, and discounting Otezla’s future.

The move blindsided some analysts. Credit Suisse’s Vamil Divan noted just days ago:

Endpoints News

Basic subscription required

Unlock this story instantly and join 53,600+ biopharma pros reading Endpoints daily — and it's free.

Bris­tol-My­ers star Op­di­vo fails sur­vival test in a matchup with Nex­avar aimed at shak­ing up the big HCC mar­ket

Bris­tol-My­ers Squibb has suf­fered an­oth­er painful set­back in its years-long quest to ex­pand the reach of Op­di­vo. The phar­ma gi­ant this morn­ing not­ed that their Check­mate-459 study com­par­ing Op­di­vo with Bay­er’s Nex­avar in front­line cas­es of he­pa­to­cel­lu­lar car­ci­no­ma — the most com­mon form of liv­er can­cer — failed to hit the pri­ma­ry end­point on over­all sur­vival.

This was a sig­nif­i­cant mile­stone in Bris­tol-My­ers’ tal­ly of PD-1 cat­a­lysts this year. Nex­avar (so­rafenib) has been the stan­dard of care in front­line HCC for the past decade, though Op­di­vo has been mak­ing head­way in sec­ond-line HCC cas­es, where it’s go­ing toe-to-toe with Bay­er’s Sti­var­ga (re­go­rafenib) af­ter re­cent ap­provals shook up the mar­ket.

SQZ, Ery­tech kick off $57M cell ther­a­py part­ner­ship; Jean-Paul Kress lands new CEO gig at Mor­phoSys

→ In a mar­riage of two tech­nolo­gies meant to make cell ther­a­pies more pow­er­ful, SQZ Biotech is team­ing up with France’s Ery­tech Phar­ma for a col­lab­o­ra­tion, with $57 mil­lion re­served for the first project and $50 mil­lion for each sub­se­quent ap­proval (prod­uct or in­di­ca­tion). Hav­ing ac­cess to Ery­tech’s method of fash­ion­ing ther­a­peu­tics from red blood cells, the Cam­bridge, MA-based com­pa­ny said, will am­pli­fy SQZ’s cell en­gi­neer­ing ca­pa­bil­i­ties and al­low them to de­vleop a new class of im­munomod­u­la­to­ry ther­a­pies. Its own tech — so far ap­plied in can­cer but al­so has po­ten­tial in di­a­betes — tem­po­rary dis­rupts the cell mem­brane by squeez­ing the cell, thus cre­at­ing a brief win­dow for tar­get ma­te­ri­als such as anti­gens to en­ter.

FDA re­jects Ac­er's rare dis­ease drug, asks for new tri­al — shares crater

Ac­er Ther­a­peu­tics’ bid to re­pur­pose celipro­lol — a be­ta-block­er on the mar­ket for hy­per­ten­sion — as a treat­ment for a rare, in­her­it­ed con­nec­tive tis­sue dis­or­der has hit a se­vere set­back. The New­ton, Mass­a­chu­setts-based com­pa­ny on Tues­day said the FDA re­ject­ed the drug and has asked for an­oth­er clin­i­cal tri­al.

The com­pa­ny’s shares $AC­ER cratered near­ly 77% to $4.47 in Tues­day morn­ing trad­ing.

Tasly Bio­phar­ma pitch­es long-await­ed IPO — will it trig­ger an­oth­er $1B gold rush on HKEX?

In the run up to the Hong Kong stock ex­change’s an­tic­i­pat­ed rule change — open­ing the door for Chi­nese pre-rev­enue biotechs to go pub­lic clos­er to home — more than a year ago, Tasly Bio­phar­ma was one of the big play­ers whose ru­mored in­ter­est helped stoke en­thu­si­asm for the new list­ing venue. The com­pa­ny has since kept the drum­roll rum­bling in the back­ground, rais­ing a pre-IPO round and con­vinc­ing part­ner Trans­gene to swap own­er­ship in a joint ven­ture for eq­ui­ty. Now the oth­er shoe has fi­nal­ly dropped as ex­ecs out­line plans for a pipeline dom­i­nat­ed by car­dio­vas­cu­lar drugs.