Industry User Fees and Streamlining the Regulatory Process

The Food and Drug Administration (FDA) Safety and Innovation Act of 2012 was signed into law July 9, 2012, after it passed the U.S. Congress with bipartisan support. The law reauthorizes the Prescription Drug User Fee Act (PDUFA), the fifth time since it was originally enacted in 1992. It also reauthorizes the Medical Device User Fee Act (MDUFA) for the third time since it was originally enacted in 2002. The fees collected from biotech and pharmaceutical companies under these two acts fund the agency’s reviews of research products for approval to market the products to the public. The 2012 Act also includes a number of legal and regulatory provisions for innovative research that advocates expect will benefit patients.

What user fees pay for

User fees collected from the industries the FDA regulates stretch taxpayer dollars for the cost of running the agency. The FDA is part of the U.S. Department of Health and Human Services. In the realm of public health, the agency is charged with approving devices, pharmaceuticals and other health-related products prior to their marketing in the United States. The purpose is to limit the risks and dangers of medical treatments and prevent fraudulent claims of scientific efficacy. The fees collected under the FDA Safety and Innovation Act cover the training and salaries of reviewers, who aim to complete their reviews in a timely manner in order to ensure that useful developments make it to patients as quickly as possible.

The fees outlined by the FDA Safety and Innovation Act of 2012 are collected for the review of medical devices, innovator drugs, generic drugs, and biosimilar biologics, and encourage pediatric drug development by making two programs permanent: the Best Pharmaceuticals for Children Act and the Pediatric Research Equity Act. The National Organization for Rare Disorders (NORD) estimates that the Act will provide $6 billion in industry user fees to the FDA between 2012 and 2017. Though this set-up is not ideal for conflict of interest concerns, as noted in Journal of the American Medical Association (JAMA) in July 2012, it is necessary to counter budgetary concerns.

Other benefits of the Act

In July 2012 NORD outlined a number of other benefits of the Act beyond its budgetary value. The organization expects that the funding will allow faster access to new medical treatments and encourage the development of “humanitarian use devices” (i.e., devices of interest to small patient populations), something that the rare-disease community is particularly interested in. Also of interest to NORD are expectations that breakthrough therapies, those showing early promise, will be studied more quickly, rare pediatric diseases will receive priority review through a voucher program and rare disease experts will be consulted more readily.

The National Law Review has described the more judicial benefits of the Act. Some of the provisions require the agency to streamline medical device approval practices, including alterations to what can be requested from manufacturers, in order to speed up approvals. This is balanced by requirements to allow clinical holds on certain devices and improve the device recall program.

The agency must also develop a unique facility database for drug companies and replace the previous inspection rotation with an at-risk system. In addition, the FDA was extended the authority to detain questionable drugs. Marketing extensions were cemented for companies developing infectious disease related drugs, and shortages were addressed by requiring that companies notify the FDA six months prior to expected problems.

What the Act means for consumers and patients

The main benefit of the Act for consumers and patients is a streamlined process for regulatory review. The provisions of the Act aim to make the review process for necessary health care-related products more efficient, while maintaining safety and regulatory integrity. By maintaining programs that keep the FDA working and expanding programs advocated for by the patients they will serve, the agency has the opportunity to serve Americans who require pharmaceuticals and/or medical devices on the dime of the industry that benefits from their sale.

The full text of the bill that was passed is available at GovTrack.