On Wednesday May 30, 2012, the House is scheduled to consider H.R. 5651 (“to amend the Federal Food, Drug, and Cosmetic Act to revise and extend the user-fee programs for prescription drugs and for medical devices, to establish user-fee programs for generic drugs and biosimilars, and for other purposes.”), under a suspension of the rules requiring a two-thirds majority for approval.  H.R. 5651 was introduced by Reps. Fred Upton (R-MI), Henry Waxman (D-CA),  Joseph Pitts (R-PA), Frank Pallone (D-NJ), Joe Barton (R-TX) and John Dingell (D-MI) on May 9, 2012 and was referred to the Committee on Energy and Commerce.  The Energy and Commerce Committee held a mark-up session on May 10, 2012 and ordered the bill favorably reported by a vote of 46-0.  On Friday May 25, 2012, Energy and Commerce Committee Chairman Fred Upton (R-MI) released a substitute amendment containing technical changes and the addition of language in Section 863* that would result in the bill reducing mandatory spending by $370 million over ten years.  With the addition of this language, H.R. 5651 is pay-go compliant..

H.R. 5651 amends the Federal Food, Drug, and Cosmetic Act to revise and extend the user-fee programs for prescription drugs and for medical devices, to establish user-fee programs for generic drugs and biosimilars, and for other purposes.  Specifically, the legislation would reauthorize the prescription drug user fee and medical device user fee, authorize a generic drug user fee and biosimilar user fee, reauthorize the Best Pharmaceuticals for Children Act and Pediatric Research Equity Act, institute reforms at the Food and Drug Administration (FDA) to improve the predictability, consistency, and transparency of its regulation of drugs and devices, and establish policies to address the drug shortage crisis.

The United States has led the global medical device and biopharmaceutical industries for decades.  This leadership has made the U.S. the medical innovation capital of the world, bringing hundreds of thousands of high-paying jobs to our country and lifesaving devices and drugs to our nation’s patients.  Unfortunately, our nation’s device and biopharmaceutical leadership is under threat.

The significant policy reforms contained in H.R. 5651, along with the additional resources and accountability measures in the user fee agreements, would address the regulatory uncertainty at FDA so the U.S. would remain the world leader in medical innovation, device and drug jobs would remain in the U.S., and U.S patients would continue to benefit from new devices and drugs, without compromising FDA’s appropriately stringent standards that protect patients from unsafe or ineffective devices and drugs. 

 H.R. 5651 also would authorize two new user fees.  The new generic drug user fee would provide additional resources for the review and regulation of generic drugs.  These resources would bring faster and more predictable review of generic drug applications and increased inspections of generic drug facilities, bringing parity to the frequency of inspections of foreign and domestic generic drug facilities.    The new biosimilar user fee would provide additional resources to FDA for the review of biosimilar applications.  H.R. 5651 also would take important steps to address the current drug shortage crisis affecting the U.S. 

Finally, H.R. 5651 would modernize the Federal Food, Drug, and Cosmetic Act (FFDCA) to give FDA the tools necessary to deal with the increased globalization of the pharmaceutical supply chain.

 Title I:  The Prescription Drug User Fee Act (PDUFA) Reauthorization

Under this section, the drug industry would pay over $700 million in FY 2013 and higher amounts in the remaining four years.  In exchange, FDA would commit to the following: (1) meeting performance goals regarding the timely review of drug applications; (2) increasing interaction between drug sponsors and FDA during the review process; (3) improving engagement with patients, including those with rare diseases; (4) providing more granular data from its review divisions to improve transparency, and (5) undertaking an independent assessment by a third party of FDA’s performance in FDA’s reviewing applications for novel drugs.

Title II:  The Medical Device User Fee Act (MDUFA) Reauthorization

Industry would pay $595 million in user fees for FY 2013-2017 in return for significant changes in FDA performance and accountability.  The bill would authorize the following changes:  FDA would report its total time for reviewing devices; the review process would include greater interaction between sponsors and the agency; an independent entity would review the device approval and clearance process; and FDA would have to implement a corrective action plan to address deficiencies found in the independent review.

Title III:  Generic Drug User Fee Act (GDUFA)

This title would authorize the new Generic Drug User Fee Act (GDUFA).  The proposed generic drug user fee would provide additional resources for the review and regulation of generic drugs.  Under GDUFA, the generic drug industry would pay approximately $1.5 billion over five years.  The industry agreed to this fee in return for faster and more predictable review of generic drug applications and increased inspections of drug facilities. 

Title IV:  Biosimilars User Fee Act (BSUFA)

Title IV contains language that would authorize the new Biosimilars User Fee Act (BSUFA).  This user fee would apply to products approved under the abbreviated approval pathway for biological products shown to be biosimilar to an FDA-licensed biological product.  BSUFA would authorize the following four types of fees:  application, product, establishment and biosimilar product development.  The first three would be set equal to the PDUFA rate for each type of fee.  The product development fee would be set at 10 percent of the PDUFA application fee. 

Title V:  Best Pharmaceuticals for Children Act (BPCA) and Pediatric Research Equity Act (PREA)

This title includes language from H.R. 4274 that would permanently authorize the Best Pharmaceuticals for Children Act (BPCA) and the Pediatric Research Equity Act (PREA).  BPCA and PREA foster the development of prescription drugs for children and safe use of drugs by children. 

Title VI:  FDA Administrative Reforms

Title VI would change FDA’s guidance process to encourage public participation and Congressional oversight, and it would improve FDA’s conflict of interest rules to ensure the agency and its advisory committees have access to the most knowledgeable scientific experts.

Title VII:  Medical Device Regulatory Reforms

Title VII would significantly reform FDA’s medical device review process to build additional certainty, predictability, transparency and efficiency into the process, including the following:  (1) restore the Investigational Device Exemption (IDE) standard so innovators can bring clinical trials back to the United States and end inefficient double reviews of IDE applications, which wastes U.S. taxpayer and innovator resources; (2) require FDA to withdraw the 510(k) modifications guidance that would increase device submissions by 300 to 500%, which will save U.S. taxpayers resources and prevent a crippling of the device review process and innovation; (3) require FDA reviewers to provide the scientific and regulatory rationale for major decisions and allow an expedited appeal of those decisions to provide transparency and certainty to the review process; (4) streamline the de novo classification process for novel medical devices to save U.S. taxpayer and innovator resources; (5) reform the Humanitarian Device Exemption to incent the development of devices for adults with rare conditions; and (6) reaffirm the “least burdensome” provisions to ensure that device approvals and clearances are not held up by unnecessary information requests, saving U.S. taxpayer and innovators money.

Title VIII: Drug Regulatory Reforms

Title VIII includes numerous provisions to improve the drug review process.  One provision would increase access to the Accelerated Approval pathway so patients could access life-saving drugs faster.  Title VIII also includes incentives for the development of antibiotics to address the public health threat of antibiotic resistance.  Finally, it includes provisions to protect patients through reforms that would allow FDA to deal with the increased globalization of drug manufacturing.

*Section 863:  Certain citizen petitions ask the agency for a stay of action related to FDA approval of a pending application submitted under section 505(b)(2) (a new drug application that relies on safety and efficacy data produced by someone else) or 505(j) (generic application) of the Act due to scientific or medical questions about the application.  The FDA is required to take final agency action on the petition within 180 days.  This section would require the FDA to take final agency action on the petition within 150 days.  Since Committee passage, this section has been amended so the policy also applies to biosimilar applications, thus making the bill pay-go compliant.

Title IX: Drug Shortages

Title IX would help patients, doctors, nurses, and hospitals handle the current drug shortages crisis. The legislation includes reforms that would require the FDA inform the public through a drug shortages list, alleviate currents shortages by modifying current reporting requirements, expedite the review of manufacturing changes of drugs in need, and prevent a future crisis by authorizing GAO to examine the causes of the crisis and issue recommendations to prevent future shortages.

According to CBO, the bill as amended on May 25, 2012 would result in a reduction of the deficit of $114 million over the 2012-2017 period and a ten-year net reduction in the deficit of $370 million.