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Industry reacts to proposed regulatory fee increase

Monday, March 27, 2017

President Trump’s proposed budget would require drug and device makers to pay more than double the current fees for regulatory approval, a concern that has many in the industry asking for more detail. The proposed budget posits the fee increases would improve the speed of regulatory approval, but specifics for how that outcome would be achieved have yet to be provided. The suggested budget also cuts nearly $6 billion from the NIH, which would greatly impact medical research funding.

The proposed budget states it “recalibrates Food and Drug Administration (FDA) medical product user fees to over $2 billion in 2018, approximately $1 billion over the 2017 annualized CR level, and replaces the need for new budget authority to cover pre-market review costs. To complement the increase in medical product user fees, the Budget includes a package of administrative actions designed to achieve regulatory efficiency and speed the development of safe and effective medical products. In a constrained budget environment, industries that benefit from [the] FDA’s approval can and should pay for their share.”

Trump has said the drug approval process is “slow and burdensome.” His recent nomination of Dr. Scott Gottlieb for the role of FDA commissioner also closely ties to a budget that calls for speedier regulatory processes. Dr. Gottlieb, formerly a deputy commissioner at the FDA, believes the clinical trial development process should be more flexible, and more competition in the market would be a positive outcome for consumers. He has also suggested lessening restrictions on the availability of drugs approved by regulatory agencies outside of the U.S., which would impact the FDA’s ability to maintain oversight.

While details for how this would be achieved thus far are sparse, responses among sponsors and industry organizations range from guarded to outright concern.

Biotechnology Innovation Organization (BIO) Senior Vice President for Communications Kenneth Lisaius said, regarding the budget blueprint, “While we are still reviewing today’s budget blueprint, we have initial concerns with the proposed reductions in the budgets for biomedical research, public health and for agencies that play an important role in promoting innovations in agricultural, environmental and human health. We are encouraged by other language in the budget blueprint that seeks to improve the regulatory environment for such innovations. “

Lisaius continued, “As regards to user fee programs, we look forward to working with the President and Congress to preserve the commitments reflected in the carefully negotiated PDUFA VI goals letter, and ensuring that this vital program is reauthorized in a timely manner. We look forward to learning more about the President’s proposals to improve the FDA’s ability to perform its essential public health mission.”

Others took a stronger stance when details of the budget were released. The American Association for the Advancement of Science (AAAS) said in a statement, “The Trump Administration’s proposed budget would cripple the science and technology enterprise through short-sighted cuts to discovery science programs and critical mission agencies alike. Investments in federal research and development (R&D) make significant contributions to economic growth and public well-being. The Administration’s proposed cuts would threaten our nation’s ability to advance cures for disease, maintain our technological leadership, ensure a more prosperous energy future and train the next generation of scientists and innovators to address the complex challenges we face today and in the future.”

AAAS has hope for some changes though, and said, “This is the President’s proposal, and it’s up to Congress to respond and make decisions on budget and appropriations. Congress has a long bipartisan history of protecting research investments. We encourage Congress to act in the nation’s best interest and support sustainable funding for federal R&D—for both defense and non-defense programs—as it works to address the FY 2018 budget.”

The Alliance for a Stronger FDA had a similar stance. It said, “The President’s proposed funding mechanism—cutting more than a third of the agency’s appropriation and offsetting it with an enormous increase in medical product industry user fees—is neither wise nor realistic. Not wise because [the] FDA’s core responsibilities—safe and effective medical products and safe foods—need to be supported in large measure by the public, who is the primary beneficiary. Not realistic because the drug and device industries have recently completed user fee agreement negotiations with [the]  FDA, concurring upon an appropriate amount of industry fees to support agency improvements. User fees have always been intended to supplement the agency’s appropriation, never to replace it.”

Michael Klag, dean of the John Hopkins School of Public Health, said, “These proposed cuts are the antithesis of ‘making America great.’ They would be devastating for biomedical research in the U.S. but, more importantly, for the health of persons in the U.S. and around the world. It is ironic that the U.S. is the model for the world in regard to public health and biomedical research. For this reason, people from all over the globe come to train at our universities and at [the] NIH. This proposed budget would change that and send a strong signal to young people and trainees not to choose a career in public health research.”

Congress will ultimately set the 2018 budget, and they can choose whether they align with Trump’s proposed plan. With so much uncertainty, for now, the industry will wait for Congress to provide clarity. 


This article was reprinted from Volume 21, Issue 12, of CWWeekly, a leading clinical research industry newsletter providing expanded analysis on breaking news, study leads, trial results and more. Subscribe »

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